{"data":{"id":"us-ky/krs-65a.040","jurisdiction":"us-ky","citation":"KRS 65A.040","heading":"Failure to submit information or submitting noncompliant information --","body":"Notice -- Withholding of funds -- Audit or special examination -- Distribution\nof funds upon compliance -- Action to enforce reporting requirements.\n(1) The provisions of this sec tion shall apply when any special purpose governmental\nentity fails to submit information or submits noncompliant information under KRS\n65A.020.\n(2) If a special purpose governmental entity fails to submit information in a timely\nmanner or submits noncompliant information, the DLG shall, within thirty (30) days\nafter the due date of the information, notify the special purpose governmental entity\nand the establishing entity in writing that:\n(a) Either:\n1. The required information was not submitted in a timely manner; or\n2. The information submitted was noncompliant and the reason for\nnoncompliance;\n(b) The special purpose governmental entity shall have thirty (30) days from the\ndate of the notice to submit the information; and\n(c) Failure to submit compliant information:\n1. Will result in:\na. Any funds due the entity and in the possession of any agency,\nentity, or branch of state government being withheld by the state\ngovernment entity until the report or information is submitted; and\nb. Publication of a notic e of noncompliance in a newspaper having\ngeneral circulation in the area where the special purpose\ngovernmental entity operates; and\n2. May result in the Auditor of Public Accounts or the auditor's designee\nperforming an audit or special examination of the  special purpose\ngovernmental entity at the expense of the entity.\n(3) Upon the failure of a special purpose governmental entity to submit information in\nresponse to the notice sent under subsection (2) of this section, the DLG shall,\nwithin fifteen (15) days after the passage of the thirty (30) day period:\n(a) Notify in writing the Auditor of Public Accounts, the establishing entity, and\nany entity having oversight or responsibility of the special purpose\ngovernmental entity at the state level. The notice shall include at a minimum\nthe name, mailing address, and  primary contact name for the special purpose\ngovernmental entity, as well as details about the information that is past due;\n(b) Notify the Finance and Administration Cabinet that the special purpose\ngovernmental entity has failed to comply with the repor ting requirements of\nKRS 65A.010 to 65A.090, and that any funds in the possession of any agency,\nentity, or branch of state government shall be withheld until further notice;\nand\n(c) 1. Cause to be published in the newspaper having general circulation in t he\narea where the special purpose governmental entity operates a notice of\nnoncompliance. The notice shall meet the requirements of KRS Chapter\n424 and shall include:\na. Identification of the special purpose governmental entity;\nb. A statement that the spe cial purpose governmental entity failed to\ncomply with the reporting requirements established by KRS\n65A.020;\nc. The names of the board members of the special purpose\ngovernmental entity;\nd. The name and contact information of the individual provided as\nthe contact for the special purpose governmental entity; and\ne. Any other information the DLG may require.\n2. The cost of publication of the notice shall be borne by the special\npurpose governmental entity. If the notice includes more than one (1)\nspecial pu rpose governmental entity, the cost shall be divided equally\namong the entities included in the notice.\n(4) Upon receipt of notification under subsection (3)(b) of this section, the secretary of\nthe Finance and Administration Cabinet shall, within ten (10)  days after receipt of\nthe notice, notify all state agencies, entities, and branches of state government to\nwithhold any funds due the noncompliant special purpose governmental entity.\n(5) (a) The Auditor of Public Accounts shall, within thirty (30) days a fter the receipt\nof information from the DLG under subsection (3)(a) of this subsection, notify\nin writing the special purpose governmental entity that the entity may be\nsubject to an audit or special examination at the expense of the special\npurpose governmental entity.\n(b) The Auditor of Public Accounts may initiate an audit or special examination\nof any special purpose governmental entity any time after sending the notice\nrequired by paragraph (a) of this subsection. Any audit or special examination\ninitiated pursuant to this subsection shall be at the expense of the special\npurpose governmental entity.\n(c) Once commenced, an audit or special examination may be completed\nregardless of whether the special purpose governmental entity subsequently\nsubmits the required information.\n(d) The audit or special examination shall be prepared and submitted as required\nby KRS 65A.020 and 65A.030.\n(6) Upon receipt of all required information from a noncompliant special purpose\ngovernmental entity, the DLG shall notify in writing the Auditor of Public\nAccounts, the establishing entity, and the Finance and Administration Cabinet, and\nthe secretary of the Finance and Administration Cabinet shall notify all state\nagencies, entities, and branches of state government that fun ds withheld may once\nagain be distributed to the special purpose governmental entity.\n(7) Any resident or property owner of the service area of a special purpose\ngovernmental entity may bring an action in the Circuit Court to enforce the\nprovisions of KRS 65A.020. The Circuit Court, in its discretion, may allow the\nprevailing party, other than the special purpose governmental entity, a reasonable\nattorney's fee and court costs, to be paid from the special purpose governmental\nentity's treasury.","path":["KRS Chapter 65A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=41684","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:23Z","sha256":"218870a58e84ad1179747f34b8d6b4436e1becf0b87206d9e3b8443c7ea98ee2","source_id":"us-ky","stale":false,"prev":"us-ky/krs-65a.032","next":"us-ky/krs-65a.050"},"notice":"GroundRules: Original legal text. Not legal advice."}