{"data":{"id":"us-ky/krs-65a.030","jurisdiction":"us-ky","citation":"KRS 65A.030","heading":"Audits, financial statements, and attestation engagements for fiscal","body":"periods beginning on or after July 1, 2014 -- Alternative financial review --\nExclusion of some annual receipts.      (Effective until July 1, 2027)\n(1) For fiscal periods beginning on or after July 1, 2014, requirements relating to audits\nand financial statements of special purpose governmental entities are as follows:\n(a) Every special purpose governmental entity with the higher of annual receipts\nfrom all sources or annual exp enditures of less than one hundred thousand\ndollars ($100,000) shall:\n1. Annually prepare a financial statement; and\n2. Once every four (4) years, contract for the application of an attestation\nengagement as determined by the DLG, as provided in subsection  (2) of\nthis section;\n(b) Every special purpose governmental entity with the higher of annual receipts\nfrom all sources or annual expenditures equal to or greater than one hundred\nthousand dollars ($100,000) but less than five hundred thousand dollars\n($500,000) shall:\n1. Annually prepare a financial statement; and\n2. Once every four (4) years, contract for the provision of an independent\naudit as provided in subsection (2) of this section; and\n(c) Every special purpose governmental entity with the higher o f annual receipts\nfrom all sources or annual expenditures equal to or greater than five hundred\nthousand dollars ($500,000) shall:\n1. Annually prepare a financial statement; and\n2. Be audited annually as provided in subsection (2) of this section.\n(2) (a) To provide for the performance of an audit or attestation engagement as\nprovided in subsection (1)(a) to (c) of this section, the governing body of a\nspecial purpose governmental entity shall employ  an independent certified\npublic accountant or contract with the Auditor of Public Accounts to conduct\nthe audit or attestation engagement unless the provisions of subsection (3) of\nthis section apply.\n(b) The audit or attestation engagement shall be compl eted no later than twelve\n(12) months following the close of the fiscal year subject to the audit or the\nattestation engagement.\n(c) 1. The special purpose governmental entity shall submit for publication on\nthe registry the audit or attestation engagement , in the form and format\nrequired by the DLG.\n2. A federally regulated municipal utility may comply with the\nrequirements of this section for the public power component of its\noperations by submitting an audit that conforms to the requirements\nimposed by t he federal agency with which it maintains a wholesale\npower contract.\n3. A public utility established pursuant to KRS 96.740 that is not a\nfederally regulated municipal utility may comply with the requirements\nof this section for the public power component  of its operations by\nsubmitting a copy of its annual audit performed under KRS 96.840.\n(d) 1. The audit or attestation engagement shall conform to:\na. Generally accepted governmental auditing or attestation standards,\nwhich means those standards for audit s or attestations of\ngovernmental organizations, programs, activities, and functions\nissued by the Comptroller General of the United States;\nb. Generally accepted auditing or attestation standards, which means\nthose standards for all audits or attestations  promulgated by the\nAmerican Institute of Certified Public Accountants; and\nc. Additional procedures and reporting requirements as may be\nrequired by the Auditor of Public Accounts.\n2. Rather than meeting the standards established by subparagraph 1. of thi s\nparagraph, the audit submitted by a federally regulated municipal utility\nor a public utility established pursuant to KRS 96.740 that is not a\nfederally regulated municipal utility with regard to the public power\ncomponent of the utility's operations sha ll conform to KRS 96.840 and\nthe financial standards of the Federal Energy Regulatory Commission's\nUniform System of Accounts.\n(e) Upon request, the Auditor of Public Accounts may review the final report and\nall related work papers and documents of the ind ependent certified public\naccountant relating to the audit or attestation engagement.\n(f) If a special purpose governmental entity is required by another provision of\nlaw to audit its funds more frequently or more stringently than is required by\nthis secti on, the special purpose governmental entity shall comply with the\nprovisions of that law, and shall comply with the requirements of paragraph\n(c) of this subsection.\n(g) Notwithstanding any provision of the Kentucky Revised Statutes to the\ncontrary, a unit  of government furnishing funds directly to a special purpose\ngovernmental entity may require additional audits at the expense of the unit of\ngovernment furnishing the funds.\n(h) All audit reports, attestation engagement reports, and financial statements o f\nspecial purpose governmental entities shall be public records.\n(3) (a) Any board, commission, or agency established by statute with regulatory\nauthority or oversight responsibilities for a category of special purpose\ngovernmental entities may apply to th e Auditor of Public Accounts to be\napproved to provide an alternative financial review of the special purpose\ngovernmental entities it regulates or oversees that are required by subsection\n(1)(a) of this section to submit an attestation engagement. The app lication\nshall be in the form and format determined by the Auditor of Public Accounts.\n(b) The Auditor of Public Accounts shall review the application and if the auditor\ndetermines that the board, commission, or agency has the resources and\ncapacity to con duct an acceptable alternative financial review, the auditor\nshall notify the DLG that the board, commission, or agency is approved to\nprovide an alternative financial review of the special purpose governmental\nentities it regulates or oversees that are re quired by subsection (1)(a) of this\nsection to submit an attestation engagement.\n(c) The Auditor of Public Accounts shall advise the DLG and the board,\ncommission, or agency regarding modifications to the proposed alternative\nfinancial review procedures ne cessary to obtain the Auditor of Public\nAccounts' approval.\n(d) Any board, commission, or agency approved to provide alternative financial\nreviews shall reapply to the Auditor of Public Accounts for approval to\ncontinue to provide alternative financial rev iews at least every four (4) years.\nThe Auditor of Public Accounts may require more frequent approvals.\n(e) The Auditor of Public Accounts or the DLG may withdraw any approval\ngranted under this subsection if the board, commission, or agency fails to\nconduct alternative financial reviews using the procedures and including the\nterms and components agreed to with the DLG.\n(f) Any board, commission, or agency approved to provide alternative financial\nreviews shall notify the Auditor of Public Accounts and the DLG if an\nirregularity is found in the alternative financial review.\n(g) Any special purpose governmental entity subject to regulation or oversight by\na board, commission, or agency that obtains approval to provide an alternative\nfinancial review under thi s subsection shall have the option of having an\nalternative financial review performed by the board, commission, or agency,\nor may contract for the application of an attestation engagement as provided\nin subsection (1)(a) of this section.\n(4) The DLG shall  determine which procedures conducted under attestation standards\nwill apply to special purpose governmental entities meeting the conditions\nestablished by subsection (1)(a) of this section. The DLG may determine that\nadditional procedures be conducted und er attestation standards for specific\ncategories of special purpose governmental entities or for specific special purpose\ngovernmental entities, as needed, to obtain the oversight and information deemed\nnecessary by the DLG.\n(5) Based on the information submitted by special purpose governmental entities under\nKRS 65A.020 and 65A.090, the DLG shall determine when each special purpose\ngovernmental entity was last audited, and shall notify the special purpose\ngovernmental entity of w hen each audit or attestation engagement is due under the\nnew standards and requirements of this section.\n(6) (a) In determining the requirements relating to audits and financial statements of\nspecial purpose governmental entities under subsection (1) of t his section, the\nDLG may exclude annual receipts received by the special purpose\ngovernmental entity if:\n1. The receipts constitute nonrecurring, nonoperating grants for the\npurpose of capital asset acquisition, capital construction, disaster\nrecovery effo rts, or other one (1) time purposes as determined by the\nDLG; and\n2. The special purpose governmental entity requests, in writing to the DLG\nand for each fiscal year it receives the revenue in question, that the\nrevenues in question not be included in determining its annual revenues.\n(b) In determining the requirements relating to audits and financial statements\nunder subsection (1) of this section of special purpose governmental entities\nthat are public use airports operating under KRS 183.132 to 183.160, the DLG\nmay exclude annual receipts received by those public use airports if the\nreceipts constitute nonoperating or recurring grants for the purpose of capital\nasset acquisition, capital construction, disaster recovery efforts, or other one\n(1) time purposes as determined by the DLG.\n(c) Any receipts excluded under paragraph (a) or (b) of this subsection shall still\nbe reported as required under KRS 65A.020(2)(a)2.\n(7) The DLG may promulgate administrative regulations pursuant to KRS Chapter 13A\nto implement the provisions of this section.\nEffective: July 15, 2020","path":["KRS Chapter 65A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=49996","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:23Z","sha256":"2a2537a5f734d45592133cbafbe87c4a4c58b50d192f30ec21575df887af03fc","source_id":"us-ky","stale":false,"prev":"us-ky/krs-65a.020","next":"us-ky/krs-65a.032"},"notice":"GroundRules: Original legal text. Not legal advice."}