Table 4.29

State Auditors: Audits of Local Governments

			Types of local governments audited
FIPS	State or other jurisdiction	Audits local governments	Cities, towns & villages	Counties	Non-profit organizations/ for-profits receiving state/federal awards	School districts	Other	Audit standards used	GAAP required for local government financial statements
01	Alabama	✓	✕	✓(100%)	✕	✓(98.5% county; 5% city)	✕	GAAS, GAGAS	✓
02	Alaska	✕	✕	✕	✕	✕	✕	GAAS, GGAGAS	✓
04	Arizona	✓	✕	✓(60%)	✕	✕	Community College Districts (92%)	GAAS, GAGAS, Federal Uniform Guidance	✓
05	Arkansas	✓	✓(91.98%)	✓(100%)	✕	✓(83.3%)	Prosecuting attorney judicial districts (100%)	GAAS, GAGAS; very small local governments may have a financial and compliance report in lieu of a full audit report.	No, regulatory basis per Arkansas Code.
06	California	✓	✓	✓	✓	✓	Any publicly created entity.	GAGAS	✓
08	Colorado	✕	✕	✕	✕	✕	✕	GAAS	✓
09	Connecticut	✕	✕	✕	✕	✕	✕	GAGAS	✓
10	Delaware	✓	✓	✕	✓	✓	Local government audits are performed based on mandates, resources and hotline tips.	GAAS	✓
12	Florida	✓	✕	✕	✕	✓(100%)	Cities, towns, special districts, etc., as directed by law or the Legislative Auditing Committee, through citizen petition, or governing body request, or auditor general's discretion	GAAS, GAGAS	✓
13	Georgia	✓	✕	✕	✕	✓(approx. 85%)	✕	GAAS, GAGAS	✓
15	Hawaii	✕	✕	✕	✕	✕	✕	✕	✕
16	Idaho	✕	✕	✕	✕	✕	✕	GAGAS	✕
17	Illinois	✓	✕	✕	✕	✕	As directed by the General Assembly	GAAS, GAGAS	Generally, agencies preparing GAAP financials are expected to continue preparing GAAP financials. Some smaller units of local government report on a cash basis or modified cash basis.
18	Indiana	✓	✓(99%)	✓(99%)	✕	✓(99%)	Public libraries, townships, special taxing districts, and state universities.	GAAS, GAGAS (c)	Counties with populations greater than 100,000; cities with populations great than 75,000; and school corporations with student counts in excess of 15,000 must prepare GAAP financial statements beginning in 2019 if they will issue bonded debt in 2020 or after. This amounts to 35 governments currently. Regulatory basis used for others.
19	Iowa	✓	✓(19%)	✓(40%)	✓(<1%)	✓(<1%)	Intergovernmental entities organized under Chapter 28E of the Code of Iowa, landfills, community colleges, area education agencies, merged area schools, hospitals	GAAS, GAGAS	GAAP is required for counties, schools, hospitals, community colleges, area education agencies and merged area schools; cash basis is used for cities, landfills and entities organized under Chapter 28E of the Code of Iowa.
20	Kansas	✕	✕	✕	✕	✕	✕	✕	✕
21	Kentucky	✓	✕	✓(43%)	✕	✕	Clerk fee - 99%; sheriff fee - 99%; sheriff tax settlements - 99%	GAAS, GAGAS	No. Regulatory basis for 115/120 counties; 5 of 120 counties follow GAAP.
22	Louisiana	✓	✕	✕	✕	✕	Almost all audit and other attest engagements of local governments are performed by CPA firms that are approved by the legislative auditor. However, the legislative auditor has the authority to perform local government audits in certain circumstances prescribe by the audit law. LLA's Financial Audit Services performed the audit of one local government (a retirement system) for the fiscal year ended 6/30/18.	GAGAS (d)	✓ Louisiana local governments that may issue debt are required by LRS 24:514 to prepare their financial statements in accordance with GAAP.
23	Maine	✕	✕	✕	✕	✕	✕	✕
24	Maryland	✕	✕	✕	✕	✕	✕	GAAS	✓
25	Massachusetts	✓	✓	✓	✓	✓	Counties, cities, towns and school districts are audited by request. Nonprofit organizations are audited as vendors receiving state funds.	GAGAS	✓
26	Michigan	✕	✕	✕	✕	✕	✕	✕	✕
27	Minnesota (Legislative Auditor)	✕	✕	✕	✕	✕	✕	✕	✕
27	Minnesota (State Auditor)	✓	✓(0.4%)	✓(45%)	✕	✕	Regional development commissions - 11%	GAGAS	Most entities are required to prepare financial statements in accordance with GAAP. Very small entities report on a non-GAAP basis. Entities use both a cash basis and regulatory basis.
28	Mississippi	✓	✕	✓(30%)	✕	✕	✕	GAAS, GAGAS	No. Some counties prepare GAAP financial statements and some prepare OCBOA (cash/modified cash) financial statements.
29	Missouri	✓	✕	✓(78%)	✕	✓	Other political subdivisions such as cities and special districts upon petition by a subdivision's voters. Also, performance audits of transportation development districts and community improvement districts under separate statutory authority.	GAGAS	No. Some local governments use cash basis.
30	Montana	✕	✕	✕	✕	✕	✕	GAAS, GAGAS	✓
31	Nebraska	✓	✓(1%)	✓(18%)	✓(<1%)	✓(<1%)	✕	GAAS, GAGAS	No, cash basis
32	Nevada	✕	✕	✕	✕	✕	✕	✕	✕
33	New Hampshire	✕	✕	✕	✕	✕	✕	✕	✕
34	New Jersey (State Auditor)	✓	✕	✕	✕	✓(<5% a year)	There are 607 school districts in NJ. Statutorily required to audit any district with a negative fund balance or those receiving more than 80% of their school funding from the state. Districts are selected based on risk assessment. Actual school district audits - 3 to 4 per year.	GAGAS	School districts and public authorities follow GAAP; cities and counties follow OCBOA (modified cash basis) as required by Department of Community Affairs, Division of Local Government Services.
34	New Jersey (State Comptroller)	✓	✓	✓	✓	✓	✕	GAGAS	✕
35	New Mexico	✓	✓(100% OSA oversight)	✓(100% OSA oversight)	✕	✓(100% OSA oversight)	State agencies and other entities that expend state public funds - 100% OSA oversight.	GAAS, GAGAS	✓Certain local public bodies may be eligible for an AUP engagement in place of a full financial audit based on annual cash revenue in accordance with the State Audit Act. Others use cash basis.
36	New York	✓	✓(100%)	✓(100%)	✓(100%)	✓(100%)	✕	GAGAS	✓ The city of New York is required by law to prepare GAAP financial statements. School districts and Boards of Cooperative Education Services are required by the State Education Department to prepare GAAP financial statements. All other local governments are encouraged to do so, but are not required.
37	North Carolina	✕	✕	✕	✕	✕	✕	✕	✕
38	North Dakota	✓	✓(15%)	✓(76%)	✕	✓(15%)	42%	GAAS, GAGAS, Uniform Guidance if single audit is required	No. Modified cash or cash basis is used.
39	Ohio	✓	✓(47.7)	✓(75%)	✓(29.4%)	✓(70.8%)	✕	GAAS, GAGAS	✓ Ohio Administrative Code 117-2-03 requires counties, cities and school districts, including educational service centers and community schools, and government insurance pools organized pursuant to section 9.833 or 2744.081 of the Ohio Revised Code to file annual financial reports prepared using GAAP. Other local governments follow OCBOA and regulatory basis.
40	Oklahoma	✓	✓(a)	✓(100%)	✓(a)	✓(a)	District attorneys - 100%; emergency medical service districts - 100%; circuit engineering districts - 100%	GAAS, GAGAS (e)	No. Counties may chose GAAP or regulatory basis.
41	Oregon	✕	✕	✕	✕	✕	✕	GAAS, GAGAS	Cities and counties are required to follow GAAP, but other local government entities may not. They use cash/modified cash basis.
42	Pennsylvania	✓	✓	✓	✓	✓(100%)	Audits of cities, towns, villages, and counties are only if part of the entity and not an audit of the complete entity. Examples are audits of pension plans that receive state funds and county offices that receive state funds or collect funds for the state with the audit limited to the state funds. All nonprofit volunteer firefighters' relief associations are audited, but other nonprofit or for-profit entities may receive state funds that the office does not audit.	GAGAS (f)	No. Conducts primarily compliance audits related to state funding. Any financial audits are conducted by other auditors. For some engagements of counties and municipal government, conducts attestation examinations of statements prepared on a regulatory basis. Other audits of local governments are conducted as performance audits with the primary focus on compliance.
44	Rhode Island	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A
45	South Carolina (Legislative Audit Council)	✕	✕	✕	✕	✕	✕	✕	✕
45	South Carolina (State Auditor)	✕	✕	✕	✕	✕	✕	✕	✕
46	South Dakota	✓	✓a few, varies year to year	✓(100%)	✕	✓a few, varies year to year	✕	GAGAS	No. Not required of any local governments, but school districts all prepare GAAP statements. Local governments (other than school districts) generally use modified cash basis.
47	Tennessee	✓	✕	✓(95%)	✕	✕	✕	GAGAS	✓
48	Texas	✕	✕	✕	✕	✕	✕	✕	✕
49	Utah	✓	✕	✕	✕	✕	Higher risk entities. Also issue the contracts and superintend certain audits of local governments.	GAAS, GAGAS	✓
50	Vermont	✕	✕	✕	✕	✕	The office does not routinely audit municipalities, counties or school districts or nonprofits. However, statute gives the authority to audit all three if state or federal money is involved.	(g)	No. Towns that do not use GAAP usually use cash basis.
51	Virginia	✕	✕	✕	✕	✕	✕	GAAS, GAGAS (h)	✓
53	Washington	✓	✓(100%)	✓(100%)	✕	✓(100%)	All types of local governments - 94%	GAAS, GAGAS	School districts may report on a regulatory modified-accural basis, regulatory cash basis or GAAP. All other local governments generally have a choice to report on either a regulatory cash basis of GAAP, although certain governments are required by regulatory or granting agencies to report GAAP.
54	West Virginia (Post Audit Division)	✕	✕	✕	✕	✕	✕	✕	✕
54	West Virginia (Performance Evaluation Research Division)	✕	✕	✕	✕	✕	✕	✕	✕
55	Wisconsin	✕	✕	✕	✕	✕	✕	✕	✕
56	Wyoming	✓	✓(2%)	✕	✕	✓(20%)	Audits not for financial purpose; schools done on about a 5-year cycle; towns under 4,000 population done on a risk basis approximately 2% per year.	GAGAS	✓ Smaller entities can use cash basis.
66	Guam	✓	✓	✕	✓	✓	✕	GAAS, GAGAS	No, cash/modified cash
72	Puerto Rico	✓	✓(100%)	✕	✕	✓(100%)	✕	GAAS (b)	✓

Source:

Auditing in the States: A Summary, 2021 edition. The National Association of State Auditors, Comptrollers and Treasurers and state constitutions and statutes.

Key:

✓	—	Yes.
✕	—	No.
N/A	—	Did not respond.
GAAP	—	Generally Accepted Accounting Principles.
GAAS	—	Generally Accepted Auditing Standards.
GAGAS	—	Generally Accepted Government Auditing Standards.
SAS	—	Statement on Auditing Standards.

Footnotes:

(a)	Special investigative audits only.
(b)	For audits started before June 30, 2016, the Office of the Comptroller had its own set of auditing standards. After July 1, 2016, all audits are performed under GAGAS.
(c)	GAGAS is the standard for single audits only.
(d)	Louisiana Revised Statute 24:513A. (5) (a) (i) requires CPAs to perform the audits and review engagements of local governments in accordance with GAGAS.
(e)	Special investigative audits do not follow standards.
(f)	Most, but not all, local government audits are conducted in accordance with GAGAS.
(g)	Some towns have elected auditors and others hire external auditors (CPA firms). For those towns that hire external auditors, GAGAS is utilized.
(h)	Localities are also required to follow the Auditor of Public Accounts Specifications for Audits, which include additional audit procedures specifically related to compliance with state laws and regulations.