SB2638 Summary

• Amends the Governmental Account Audit Act to define "auditor" as a licensed certified public accountant rather than a "licensed public accountant," aligning terminology across state auditing laws.

• Updates the definition of "governmental unit" to include entities appropriating more than $5,000 annually (adjusted annually by Consumer Price Index), with specified exemptions for school districts, certain municipalities, large counties, and other entities with separate audit requirements.

• Establishes two compliance tracks for audit reports: prior to fiscal year 2019, reports may use generally accepted accounting principles or other comprehensive basis of accounting; beginning fiscal year 2019, reports must use generally accepted accounting principles if the prior audit expressed an unmodified or modified opinion under GAAP.

• Allows audit reports for fiscal year 2019 and beyond to use other comprehensive basis of accounting following American Institute of Certified Public Accountants guidelines, but requires switching to GAAP permanently once a governmental unit submits a GAAP-compliant report.

• Permits audits using either accrual or cash basis accounting depending on the system followed by the governmental unit.