AR HB1571

Amends Arkansas Code § 10-4-412 to reorganize and clarify definitions and requirements for county and municipal audits, including defining "required report" as reports prepared by licensed certified public accountants or licensed accountants in good standing with the Arkansas State Board of Public Accountancy.

Allows municipalities to retain licensed accountants to conduct financial audits under prescribed standards (generally accepted auditing standards and Government Auditing Standards), with all reports filed with the Legislative Auditor within 10 days of issuance.

Establishes that financial statements must be presented on a fund-basis format with general fund and street or road fund shown separately, including balance sheets, revenue/expenditure statements, budget comparisons, and capital asset schedules.

Authorizes municipalities to conduct agreed-upon procedures and compilation engagements as alternatives to full financial audits, with reports filed within 10 days of issuance.

Requires the Treasurer of State to withhold turnback funds (general revenue and highway revenue) in escrow if required audit reports are not filed within 18 months after a fiscal year ends; after 12 months of withholding, funds are redistributed to other municipalities until all required reports are filed.

Effective date: June 30, 2024.