Blogs

By @Marcus Detwiler

CSDA, in partnership with the State Association of County Auditors, is co-sponsoring legislation to preserve adaptive financial reporting requirements for small special districts. Following the passage of CSDA-sponsored Assembly Bill 2613 (Achadjian, 2015), special districts with annual revenues not in excess of $150,000 were permitted to utilize an alternative financial report, an agreed-upon procedures engagement, in lieu of a costlier financial audit. 

AB 2613 permitted these alternative reporting procedures until January 1, 2027. Absent any legislative intervention, smaller special districts would lose access to agreed-upon procedures engagements as a means to fulfill the requirement to provide an annual audit. The $150,000 threshold for inclusion is also proposed to increase, up to $250,000, to account for the change in the value of $150,000 a decade ago until the present year.

Special districts must still provide an audit after five consecutive years of utilizing the authorized alternative reporting procedures. Districts are also required to obtain the unanimous consent of their respective county board of supervisors following a unanimous vote of the special district board, and any report must be in accordance with the appropriate professional standards, as determined by the county auditor. Districts that qualify are those whose revenues and expenditures are transacted through the county’s financial system.

CSDA adopted a “Co-sponsor” position on the proposal in partnership with the State Association of County Auditors and with the approval authority of CSDA CEO Neil McCormick.

Has your district benefitted from being able to use an agreed-upon procedures engagement rather than the traditional audit? How much would your district have otherwise paid to do a traditional audit? Share your experience by email to CSDA Legislative Representative Marcus Detwiler at marcusd@csda.net.