101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1806

 

Introduced 2/15/2019, by Sen. Dale A. Righter

 

SYNOPSIS AS INTRODUCED:
 
50 ILCS 310/1  from Ch. 85, par. 701
50 ILCS 310/2  from Ch. 85, par. 702
50 ILCS 310/4  from Ch. 85, par. 704
50 ILCS 310/5  from Ch. 85, par. 705
50 ILCS 310/6  from Ch. 85, par. 706
55 ILCS 5/6-31002  from Ch. 34, par. 6-31002
55 ILCS 5/6-31003  from Ch. 34, par. 6-31003
55 ILCS 5/6-31004  from Ch. 34, par. 6-31004
55 ILCS 5/6-31005  from Ch. 34, par. 6-31005
55 ILCS 5/6-31006  from Ch. 34, par. 6-31006
55 ILCS 5/6-31008  from Ch. 34, par. 6-31008
65 ILCS 5/8-8-2  from Ch. 24, par. 8-8-2
65 ILCS 5/8-8-3  from Ch. 24, par. 8-8-3
65 ILCS 5/8-8-3.5
65 ILCS 5/8-8-4  from Ch. 24, par. 8-8-4
65 ILCS 5/8-8-5  from Ch. 24, par. 8-8-5
65 ILCS 5/8-8-7  from Ch. 24, par. 8-8-7
65 ILCS 5/8-8-8  from Ch. 24, par. 8-8-8

    Amends the Governmental Account Audit Act, the Counties Code, and the Illinois Municipal Code. Removes definitions of "licensed public accountant" and "accountant". Adds a definition for "generally accepted auditing standards". Modifies the definition of "auditor" to also include a substantially-equivalent licensed CPA that operates out-of-state. Replaces references to licensed public accountants and accountants with references to auditors. Removes audit report requirements for fiscal years prior to 2019. Modifies audit report requirements for fiscal year 2019 and beyond. Changes various terminology throughout.


LRB101 10244 AWJ 55348 b

 

 

A BILL FOR

 

SB1806LRB101 10244 AWJ 55348 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Governmental Account Audit Act is amended by
5changing Sections 1, 2, 4, 5, and 6 as follows:
 
6    (50 ILCS 310/1)  (from Ch. 85, par. 701)
7    Sec. 1. Definitions. As used in this Act, unless the
8context otherwise indicates:
9    "Governmental unit" or "unit" includes all municipal
10corporations in and political subdivisions of this State that
11appropriate more than $5,000 for a fiscal year, with the amount
12to increase or decrease by the amount of the Consumer Price
13Index (CPI) as reported on January 1 of each year, except the
14following:
15        (1) School districts.
16        (2) Cities, villages, and incorporated towns subject
17    to the Municipal Auditing Law, as contained in the Illinois
18    Municipal Code, and cities that file a report with the
19    Comptroller under Section 3.1-35-115 of the Illinois
20    Municipal Code.
21        (3) Counties with a population of 1,000,000 or more.
22        (4) Counties subject to the County Auditing Law.
23        (5) Any other municipal corporations in or political

 

 

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1    subdivisions of this State, the accounts of which are
2    required by law to be audited by or under the direction of
3    the Auditor General.
4        (6) (Blank).
5        (7) A drainage district, established under the
6    Illinois Drainage Code (70 ILCS 605), that did not receive
7    or expend any moneys during the immediately preceding
8    fiscal year or obtains approval for assessments and
9    expenditures through the circuit court.
10        (8) Public housing authorities that submit financial
11    reports to the U.S. Department of Housing and Urban
12    Development.
13    "Governing body" means the board or other body or officers
14having authority to levy taxes, make appropriations, authorize
15the expenditure of public funds or approve claims for any
16governmental unit.
17    "Comptroller" means the Comptroller of the State of
18Illinois.
19    "Consumer Price Index" means the Consumer Price Index for
20All Urban Consumers for all items published by the United
21States Department of Labor.
22    "Licensed public accountant" means the holder of a valid
23certificate as a public accountant under the Illinois Public
24Accounting Act.
25    "Audit report" means the written report of the auditor
26licensed public accountant and all appended statements and

 

 

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1schedules relating to that report, presenting or recording the
2findings of an examination or audit of the financial
3transactions, affairs, or conditions of a governmental unit.
4    "Auditor" means a licensed certified public accountant, as
5that term is defined in Section 0.03 of the Illinois Public
6Accounting Act, or the substantial equivalent of a licensed
7CPA, as provided under Section 5.2 of the Illinois Public
8Accounting Act, who performs an audit of governmental unit
9financial statements and records and expresses an assurance or
10disclaims an opinion on the audited financial statements.
11    "Report" includes both audit reports and reports filed
12instead of an audit report by a governmental unit receiving
13revenue of less than $850,000 during any fiscal year to which
14the reports relate.
15    "Generally accepted auditing standards" means Audit
16Standards Generally Accepted in the United States of America.
17(Source: P.A. 100-837, eff. 8-13-18.)
 
18    (50 ILCS 310/2)  (from Ch. 85, par. 702)
19    Sec. 2. Except as otherwise provided in Section 3, the
20governing body of each governmental unit shall cause an audit
21of the accounts of the unit to be made by an auditor or
22auditors a licensed public accountant. Such audit shall be
23performed made annually and shall cover the immediately
24preceding fiscal year of the governmental unit. The audit shall
25include all the accounts and funds of the governmental unit,

 

 

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1including the accounts of any officer of the governmental unit
2who receives fees or handles funds of the unit or who spends
3money of the unit. The audit shall begin as soon as possible
4after the close of the last fiscal year to which it pertains,
5and shall be completed and the audit report filed with the
6Comptroller within 180 days after the close of such fiscal year
7unless an extension of time is granted by the Comptroller in
8writing. An audit report which fails to meet the requirements
9of this Act shall be rejected by the Comptroller and returned
10to the governing body of the governmental unit for corrective
11action. The auditor or auditors performing licensed public
12accountant making the audit shall submit not less than 3 copies
13of the audit report to the governing body of the governmental
14unit being audited.
15    All audits to be filed with the Comptroller under this
16Section must be submitted electronically and the Comptroller
17must post the audit reports on the Internet no later than 45
18days after they are received. If the governmental unit provides
19the Comptroller's Office with sufficient evidence that the
20audit report cannot be filed electronically, the Comptroller
21may waive this requirement. The Comptroller must also post a
22list of governmental units that are not in compliance with the
23reporting requirements set forth in this Section.
24    Any financial report under this Section shall include the
25name of the purchasing agent who oversees all competitively bid
26contracts. If there is no purchasing agent, the name of the

 

 

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1person responsible for oversight of all competitively bid
2contracts shall be listed.
3(Source: P.A. 99-459, eff. 8-25-15.)
 
4    (50 ILCS 310/4)  (from Ch. 85, par. 704)
5    Sec. 4. Overdue report.
6    (a) If the required report for a governmental unit is not
7filed with the Comptroller in accordance with Section 2 or
8Section 3, whichever is applicable, within 180 days after the
9close of the fiscal year of the governmental unit, the
10Comptroller shall notify the governing body of that unit in
11writing that the report is due and may also grant a 60 day
12extension for the filing of the audit report. If the required
13report is not filed within the time specified in such written
14notice, the Comptroller shall cause an audit to be made by a
15auditor licensed public accountant, and the governmental unit
16shall pay to the Comptroller actual compensation and expenses
17to reimburse him for the cost of preparing or completing such
18report.
19    (b) The Comptroller may decline to order an audit and the
20preparation of an audit report (i) if an initial examination of
21the books and records of the governmental unit indicates that
22the books and records of the governmental unit are inadequate
23or unavailable due to the passage of time or the occurrence of
24a natural disaster or (ii) if the Comptroller determines that
25the cost of an audit would impose an unreasonable financial

 

 

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1burden on the governmental unit.
2    (c) The State Comptroller may grant extensions for
3delinquent audits or reports. The Comptroller may charge a
4governmental unit a fee for a delinquent audit or report of $5
5per day for the first 15 days past due, $10 per day for 16
6through 30 days past due, $15 per day for 31 through 45 days
7past due, and $20 per day for the 46th day and every day
8thereafter. These amounts may be reduced at the Comptroller's
9discretion. All fees collected under this subsection (c) shall
10be deposited into the Comptroller's Administrative Fund.
11(Source: P.A. 98-922, eff. 8-15-14; 99-459, eff. 8-25-15.)
 
12    (50 ILCS 310/5)  (from Ch. 85, par. 705)
13    Sec. 5. (a) (Blank). Prior to fiscal year 2019, the audit
14report shall contain statements that conform with generally
15accepted accounting principles or other comprehensive basis of
16accounting and that set forth the financial position and
17results of financial operations for each fund of the
18governmental unit. Each audit report shall include only
19financial information, findings, and conclusions that are
20adequately supported by evidence in the auditor's working
21papers to demonstrate or prove, when called upon, the basis for
22the matters reported and their correctness and reasonableness.
23In connection with this, each governmental unit shall retain
24the right of inspection of the auditor's working papers and
25shall make them available to the Comptroller, or his or her

 

 

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1designee, upon request. The audit report shall also include the
2professional opinion of the auditor or auditors with respect to
3the financial statements or, if an opinion cannot be expressed,
4a declaration that he or she is unable to express such opinion
5and an explanation of the reasons he or she cannot do so. Each
6audit report shall include the certification of the auditor or
7auditors making the audit that the audit has been performed in
8compliance with generally accepted auditing standards.
9    (b) For fiscal year 2019 and each fiscal year thereafter,
10the audit report shall contain statements that set forth the
11financial position and results of financial operations for
12financial statements for governmental activities,
13business-type activities, discretely presented component
14units, and each major fund and aggregated nonmajor fund each
15fund of the governmental unit. Each audit report shall include
16only financial information, findings, and conclusions that are
17adequately supported by evidence in the auditor's working
18papers to demonstrate or prove, when called upon, the basis for
19the matters reported and their correctness and reasonableness.
20In connection with this, each governmental unit shall retain
21the right of inspection of the auditor's working papers and
22shall make them available to the Comptroller, or his or her
23designee, upon request. The audit report shall also include the
24professional opinion of the auditor or auditors with respect to
25the financial statements or, if an opinion cannot be expressed,
26a declaration that he or she is unable to express an opinion

 

 

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1and an explanation of the reasons he or she cannot do so. Each
2audit report shall include a representation by the
3certification of the auditor or auditors conducting making the
4audit that the audit has been performed in accordance
5compliance with generally accepted auditing standards.
6    (c) For fiscal year 2019 and each fiscal year thereafter,
7audit reports shall contain financial statements prepared in
8accordance conformity with generally accepted accounting
9principles and audited in accordance conformity with generally
10accepted auditing standards if the last audit report filed
11preceding fiscal year 2019 expressed an unmodified or modified
12opinion by the independent auditor pertaining to that the
13financial statements that were prepared presented in
14accordance conformity with generally accepted accounting
15principles.
16    (d) For fiscal year 2019 and each fiscal year thereafter,
17audit reports containing financial statements prepared in
18accordance conformity with an other comprehensive basis of
19accounting may follow the best practices and guidelines as
20outlined by the American Institute of Certified Public
21Accountants and shall be audited in accordance conformity with
22generally accepted auditing standards. If the governing body of
23a governmental unit submits an audit report containing
24financial statements prepared in accordance conformity with
25generally accepted accounting principles, thereafter all
26future audit reports shall also contain financial statements

 

 

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1prepared presented in accordance conformity with generally
2accepted accounting principles.
3    (e) Audits may be performed made on financial statements
4prepared using either an accrual or cash basis of accounting,
5depending upon the system followed by the governmental unit,
6and audit reports shall comply with this Section.
7(Source: P.A. 100-837, eff. 8-13-18.)
 
8    (50 ILCS 310/6)  (from Ch. 85, par. 706)
9    Sec. 6. When the audit is completed the auditor licensed
10public accountant making such audit shall make and sign at
11least 3 copies of the report of the audit and immediately file
12them with the governmental unit audited. Governmental units
13receiving revenue of $850,000 or more for any fiscal year shall
14immediately make one copy of the audit report and one copy of
15the financial report required by Section 3 of this Act a part
16of its public record. Governmental units receiving revenue of
17less than $850,000 shall immediately make one copy of the audit
18report, or one copy of the report authorized by Section 3 of
19this Act to be filed instead of the audit report, a part of its
20public record. These copies shall be open to public inspection.
21In addition, the governmental unit shall file one copy of the
22report with the Comptroller and with the county clerk of the
23county in which the principal office of the governmental unit
24is located. A governmental unit may, in filing its audit report
25with the Comptroller, transmit with such report any comment or

 

 

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1explanation that it wishes to make concerning the report.
2(Source: P.A. 92-582, eff. 7-1-02.)
 
3    Section 10. The Counties Code is amended by changing
4Sections 6-31002, 6-31003, 6-31004, 6-31005, 6-31006, and
56-31008 as follows:
 
6    (55 ILCS 5/6-31002)  (from Ch. 34, par. 6-31002)
7    Sec. 6-31002. Definitions. As used in this Division, unless
8the context otherwise requires:
9    1. "Comptroller" means the Comptroller of the State of
10Illinois;
11    2. (Blank); "Accountant" or "accountants" means and
12includes all persons authorized to practice public accounting
13under the laws of this State;
14    3. "Funds and accounts" means all funds of a county derived
15from property taxes and all funds and accounts derived from
16sources other than property taxes, including the receipts and
17expenditures of the fee earnings of each county fee officer;
18    4. "Audit report" means the written report of the auditor
19or auditors accountant or accountants and all appended
20statements and schedules relating thereto, presenting or
21recording the findings of an examination or audit of the
22financial transactions, affairs and condition of a county;
23    5. "Population" means the number of persons residing in a
24county according to the last preceding federal decennial

 

 

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1census;
2    6. "Auditor" means a licensed certified public accountant,
3as that term is defined in Section 0.03 of the Illinois Public
4Accounting Act, or the substantial equivalent of a licensed
5CPA, as provided under Section 5.2 of the Illinois Public
6Accounting Act, who performs an audit of county financial
7statements and records and expresses an assurance or disclaims
8an opinion on the audited financial statements; "auditor" does
9not include a county auditor elected or appointed under
10Division 3-1 of the Counties Code.
11(Source: P.A. 100-837, eff. 8-13-18.)
 
12    (55 ILCS 5/6-31003)  (from Ch. 34, par. 6-31003)
13    Sec. 6-31003. Annual audits and reports. The county board
14of each county shall cause an audit of all of the funds and
15accounts of the county to be performed made annually by an
16auditor or auditors accountant or accountants chosen by the
17county board or by an auditor or auditors accountant or
18accountants retained by the Comptroller, as hereinafter
19provided. In addition, each county shall file with the
20Comptroller a financial report containing information required
21by the Comptroller. Such financial report shall be on a form so
22designed by the Comptroller as not to require professional
23accounting services for its preparation. All audits and reports
24to be filed with the Comptroller under this Section must be
25submitted electronically and the Comptroller must post the

 

 

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1audits and reports on the Internet no later than 45 days after
2they are received. If the county provides the Comptroller's
3Office with sufficient evidence that the audit or report cannot
4be filed electronically, the Comptroller may waive this
5requirement. The Comptroller must also post a list of counties
6that are not in compliance with the reporting requirements set
7forth in this Section.
8    Any financial report under this Section shall include the
9name of the purchasing agent who oversees all competitively bid
10contracts. If there is no purchasing agent, the name of the
11person responsible for oversight of all competitively bid
12contracts shall be listed.
13    The audit shall commence as soon as possible after the
14close of each fiscal year and shall be completed within 180
15days after the close of such fiscal year, unless an extension
16of time is granted by the Comptroller in writing. Such
17extension of time shall not exceed 60 days. When the auditor or
18auditors accountant or accountants have completed the audit a
19full report thereof shall be made and not less than 2 copies of
20each audit report shall be submitted to the county board. Each
21audit report shall be signed by the auditor performing
22accountant making the audit and shall include only financial
23information, findings and conclusions that are adequately
24supported by evidence in the auditor's working papers to
25demonstrate or prove, when called upon, the basis for the
26matters reported and their correctness and reasonableness. In

 

 

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1connection with this, each county board shall retain the right
2of inspection of the auditor's working papers and shall make
3them available to the Comptroller, or his designee, upon
4request.
5    Within 60 days of receipt of an audit report, each county
6board shall file one copy of each audit report and each
7financial report with the Comptroller and any comment or
8explanation that the county board may desire to make concerning
9such audit report may be attached thereto. An audit report
10which fails to meet the requirements of this Division shall be
11rejected by the Comptroller and returned to the county board
12for corrective action. One copy of each such report shall be
13filed with the county clerk of the county so audited.
14    This Section is a limitation under subsection (i) of
15Section 6 of Article VII of the Illinois Constitution on the
16concurrent exercise by home rule counties of powers and
17functions exercised by the State.
18(Source: P.A. 99-459, eff. 8-25-15.)
 
19    (55 ILCS 5/6-31004)  (from Ch. 34, par. 6-31004)
20    Sec. 6-31004. Overdue reports.
21    (a) In the event the required reports for a county are not
22filed with the Comptroller in accordance with Section 6-31003
23within 180 days after the close of the fiscal year of the
24county, the Comptroller shall notify the county board in
25writing that the reports are due, and may also grant an

 

 

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1extension of time of up to 60 days for the filing of the
2reports. In the event the required reports are not filed within
3the time specified in such written notice, the Comptroller
4shall cause the audit to be performed made and the audit report
5prepared by an auditor or auditors accountant or accountants.
6    (b) The Comptroller may decline to order an audit and the
7preparation of an audit report if an initial examination of the
8books and records of the governmental unit indicates that the
9books and records of the governmental unit are inadequate or
10unavailable due to the passage of time or the occurrence of a
11natural disaster.
12    (c) The State Comptroller may grant extensions for
13delinquent audits or reports. The Comptroller may charge a
14county a fee for a delinquent audit or report of $5 per day for
15the first 15 days past due, $10 per day for 16 through 30 days
16past due, $15 per day for 31 through 45 days past due, and $20
17per day for the 46th day and every day thereafter. These
18amounts may be reduced at the Comptroller's discretion. All
19fees collected under this subsection (c) shall be deposited
20into the Comptroller's Administrative Fund.
21(Source: P.A. 98-922, eff. 8-15-14; 99-459, eff. 8-25-15.)
 
22    (55 ILCS 5/6-31005)  (from Ch. 34, par. 6-31005)
23    Sec. 6-31005. Funds managed by county officials. In
24addition to any other audit required by this Division, the
25County Board shall cause an audit to be made of all funds and

 

 

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1accounts under the management or control of a county official
2as soon as possible after such official leaves office for any
3reason. The audit shall be filed with the county board not
4later than 180 days after the official leaves office. The audit
5shall be performed conducted and the audit report shall be
6prepared and filed with the Chairman of the County Board by an
7auditor a person lawfully qualified to practice public
8accounting as regulated by "An Act to regulate the practice of
9public accounting and to repeal certain acts therein named",
10approved July 22, 1943 as amended.
11    As used in this Section, "county official" means any
12elected county officer or any officer appointed by the county
13board who is charged with the management or control of any
14county funds; and "audit" means a post facto examination of
15books, documents, records, and other evidence relating to the
16obligation, receipt, expenditure or use of public funds of the
17county, including governmental operations relating to such
18obligations, receipt, expenditure or use.
19(Source: P.A. 99-459, eff. 8-25-15.)
 
20    (55 ILCS 5/6-31006)  (from Ch. 34, par. 6-31006)
21    Sec. 6-31006. Audit report.
22    (a) (Blank). Prior to fiscal year 2019, the audit report
23shall contain statements that are in conformity with generally
24accepted public accounting principles or other comprehensive
25basis of accounting and shall set forth the financial position

 

 

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1and the results of financial operations for each fund, account,
2and office of the county government. The audit report shall
3also include the professional opinion of the auditor or
4auditors with respect to the financial status and operations
5or, if an opinion cannot be expressed, a declaration that such
6auditor is unable to express such opinion and an explanation of
7the reasons he or she cannot do so. Each audit report shall
8include the certification of the auditor or auditors making the
9audit that the audit has been performed in compliance with
10generally accepted auditing standards. Each audit report filed
11with the Comptroller shall be accompanied by a copy of each
12official statement or other offering of materials prepared in
13connection with the issuance of indebtedness of the county
14since the filing of the last audit report.
15    (b) For fiscal year 2019 and each fiscal year thereafter,
16the audit report shall contain statements that set forth the
17financial position and the results of financial operations for
18financial statements for governmental activities,
19business-type activities, discretely presented component
20units, and each major fund and aggregated nonmajor funds for
21each fund, account, and office of the county government. The
22audit report shall also include the professional opinion or
23opinions of an auditor or auditors with respect to the
24financial status and statements operations or, if an opinion
25cannot be expressed, a declaration that the auditor is unable
26to express an opinion and an explanation of the reasons he or

 

 

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1she cannot do so. Each auditor's audit report shall include the
2representation certification of the auditor or auditors
3conducting making the audit that the audit has been performed
4in accordance compliance with generally accepted auditing
5standards. Each audit report filed with the Comptroller shall
6be accompanied by a copy of each official statement or other
7offering of materials prepared in connection with the issuance
8of indebtedness of the county since the filing of the last
9audit report.
10    (c) For fiscal year 2019 and each fiscal year thereafter,
11audit reports shall contain financial statements prepared in
12accordance conformity with generally accepted accounting
13principles and audited in conformity with generally accepted
14auditing standards if the last audit report filed preceding
15fiscal year 2019 expressed an unmodified or modified opinion by
16the independent auditor that the financial statements were
17presented in accordance conformity with generally accepted
18accounting principles.
19    (d) For fiscal year 2019 and each fiscal year thereafter,
20audit reports containing financial statements prepared in
21accordance conformity with an other comprehensive basis of
22accounting may follow the best practices and guidelines
23outlined by the American Institute of Certified Public
24Accountants and shall be audited in accordance conformity with
25generally accepted auditing standards. If the county board of a
26county submits an audit report containing financial statements

 

 

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1prepared in accordance conformity with generally accepted
2accounting principles, thereafter all future audit reports
3shall also contain financial statements prepared in accordance
4presented in conformity with generally accepted accounting
5principles.
6    (e) Audits may be made on financial statements prepared
7using either an accrual or cash basis of accounting, depending
8upon the system followed by the county, and audit reports shall
9comply with this Section.
10(Source: P.A. 100-837, eff. 8-13-18.)
 
11    (55 ILCS 5/6-31008)  (from Ch. 34, par. 6-31008)
12    Sec. 6-31008. Expenses of audit. The expenses of conducting
13the audit and making the required audit report or financial
14statement for each county, whether ordered by the county board
15or the Comptroller, shall be paid by the county and the county
16board shall make provisions for such payment. If the audit is
17made by an auditor or auditors accountant or accountants
18retained by the Comptroller, the county, through the county
19board, shall pay to the Comptroller reasonable compensation and
20expenses to reimburse him for the cost of making such audit.
21Moneys paid to the Comptroller pursuant to the preceding
22sentence shall be deposited into the Comptroller's Audit
23Expense Revolving Fund.
24    Such expenses shall be paid from the general corporate fund
25of the county.

 

 

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1    Contracts for the performance of audits required by this
2Division may be entered into without competitive bidding.
3(Source: P.A. 88-280.)
 
4    Section 15. The Illinois Municipal Code is amended by
5changing Sections 8-8-2, 8-8-3, 8-8-3.5, 8-8-4, 8-8-5, 8-8-7,
6and 8-8-8 as follows:
 
7    (65 ILCS 5/8-8-2)  (from Ch. 24, par. 8-8-2)
8    Sec. 8-8-2. The following terms shall, unless the context
9otherwise indicates, have the following meanings:
10    (1) "Municipality" or "municipalities" means all cities,
11villages and incorporated towns having a population of less
12than 500,000 as determined by the last preceding Federal
13census.
14    (2) "Corporate authorities" means a city council, village
15board of trustees, library board, police and firemen's pension
16board, or any other body or officers having authority to levy
17taxes, make appropriations, or approve claims for any
18municipality.
19    (3) "Comptroller" means the Comptroller of the State of
20Illinois.
21    (4) (Blank). "Accountant" or "accountants" means all
22persons licensed to practice public accounting under the laws
23of this State.
24    (5) "Audit report" means the written report of the auditor

 

 

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1or auditors accountant or accountants and all appended
2statements and schedules relating thereto, presenting or
3recording the findings of an examination or audit of the
4financial transactions, affairs, or condition of a
5municipality.
6    (6) "Annual report" means the statement filed, in lieu of
7an audit report, by the municipalities of less than 800
8population, which do not own or operate public utilities and do
9not have bonded debt.
10    (7) "Supplemental report" means the annual statement
11filed, in addition to any audit report provided for herein, by
12all municipalities, except municipalities of less than 800
13population which do not own or operate public utilities and do
14not have bonded debt.
15    (8) "Auditor" means a licensed certified public
16accountant, as that term is defined in Section 0.03 of the
17Illinois Public Accounting Act, or the substantial equivalent
18of a licensed CPA, as provided under Section 5.2 of the
19Illinois Public Accounting Act, who performs an audit of
20municipal financial statements and records and expresses an
21assurance or disclaims an opinion on the audited financial
22statements.
23    (9) "Generally accepted auditing standards" means Audit
24Standards Generally Accepted in the United States of America.
25(Source: P.A. 100-837, eff. 8-13-18.)
 

 

 

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1    (65 ILCS 5/8-8-3)  (from Ch. 24, par. 8-8-3)
2    Sec. 8-8-3. Audit requirements.
3    (a) The corporate authorities of each municipality coming
4under the provisions of this Division 8 shall cause an audit of
5the funds and accounts of the municipality to be made by an
6auditor or auditors accountant or accountants employed by such
7municipality or by an auditor or auditors accountant or
8accountants retained by the Comptroller, as hereinafter
9provided.
10    (b) The accounts and funds of each municipality having a
11population of 800 or more or having a bonded debt or owning or
12operating any type of public utility shall be audited annually.
13The audit herein required shall include all of the accounts and
14funds of the municipality. Such audit shall be begun as soon as
15possible after the close of the fiscal year, and shall be
16completed and the report submitted within 180 days after the
17close of such fiscal year, unless an extension of time shall be
18granted by the Comptroller in writing. The auditor or auditors
19perform accountant or accountants making the audit shall submit
20not less than 2 copies of the audit report to the corporate
21authorities of the municipality being audited. Municipalities
22not operating utilities may cause audits of the accounts of
23municipalities to be made more often than herein provided, by
24an auditor or auditors accountant or accountants. The audit
25report of such audit when filed with the Comptroller together
26with an audit report covering the remainder of the period for

 

 

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1which an audit is required to be filed hereunder shall satisfy
2the requirements of this section.
3    (c) Municipalities of less than 800 population which do not
4own or operate public utilities and do not have bonded debt,
5shall file annually with the Comptroller a financial report
6containing information required by the Comptroller. Such
7annual financial report shall be on forms devised by the
8Comptroller in such manner as to not require professional
9accounting services for its preparation.
10    (d) In addition to any audit report required, all
11municipalities, except municipalities of less than 800
12population which do not own or operate public utilities and do
13not have bonded debt, shall file annually with the Comptroller
14a supplemental report on forms devised and approved by the
15Comptroller.
16    (e) Notwithstanding any provision of law to the contrary,
17if a municipality (i) has a population of less than 200, (ii)
18has bonded debt in the amount of $50,000 or less, and (iii)
19owns or operates a public utility, then the municipality shall
20cause an audit of the funds and accounts of the municipality to
21be performed made by an auditor accountant employed by the
22municipality or retained by the Comptroller for fiscal year
232011 and every fourth fiscal year thereafter or until the
24municipality has a population of 200 or more, has bonded debt
25in excess of $50,000, or no longer owns or operates a public
26utility. Nothing in this subsection shall be construed as

 

 

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1limiting the municipality's duty to file an annual financial
2report with the Comptroller or to comply with the filing
3requirements concerning the county clerk.
4    (f) All audits and reports to be filed with the Comptroller
5under this Section must be submitted electronically and the
6Comptroller must post the audits and reports on the Internet no
7later than 45 days after they are received. If the municipality
8provides the Comptroller's Office with sufficient evidence
9that the audit or report cannot be filed electronically, the
10Comptroller may waive this requirement. The Comptroller must
11also post a list of municipalities that are not in compliance
12with the reporting requirements set forth in this Section.
13    (g) Subsection (f) of this Section is a limitation under
14subsection (i) of Section 6 of Article VII of the Illinois
15Constitution on the concurrent exercise by home rule
16municipalities of powers and functions exercised by the State.
17    (h) Any financial report under this Section shall include
18the name of the purchasing agent who oversees all competitively
19bid contracts. If there is no purchasing agent, the name of the
20person responsible for oversight of all competitively bid
21contracts shall be listed.
22(Source: P.A. 99-459, eff. 8-25-15.)
 
23    (65 ILCS 5/8-8-3.5)
24    Sec. 8-8-3.5. Tax Increment Financing Report. The reports
25filed under subsection (d) of Section 11-74.4-5 of the Tax

 

 

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1Increment Allocation Redevelopment Act and the reports filed
2under subsection (d) of Section 11-74.6-22 of the Industrial
3Jobs Recovery Law in the Illinois Municipal Code must be
4separate from any other annual report filed with the
5Comptroller. The Comptroller must, in cooperation with
6reporting municipalities, create a format for the reporting of
7information described in paragraphs (1.5) and (5) and in
8subparagraph (G) of paragraph (7) of subsection (d) of Section
911-74.4-5 of the Tax Increment Allocation Redevelopment Act and
10the information described in paragraphs (1.5) and (5) and in
11subparagraph (G) of paragraph (7) of subsection (d) of Section
1211-74.6-22 of the Industrial Jobs Recovery Law that facilitates
13consistent reporting among the reporting municipalities. The
14Comptroller may allow these reports to be filed electronically
15and may display the report, or portions of the report,
16electronically via the Internet. All reports filed under this
17Section must be made available for examination and copying by
18the public at all reasonable times. A Tax Increment Financing
19Report must be filed electronically with the Comptroller within
20180 days after the close of the municipal fiscal year or as
21soon thereafter as the audit for the redevelopment project area
22for that fiscal year becomes available. If the Tax Increment
23Finance administrator provides the Comptroller's office with
24sufficient evidence that the report is in the process of being
25completed by an auditor, the Comptroller may grant an
26extension. If the required report is not filed within the time

 

 

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1extended by the Comptroller, the Comptroller shall notify the
2corporate authorities of that municipality that the audit
3report is past due. The Comptroller may charge a municipality a
4fee of $5 per day for the first 15 days past due, $10 per day
5for 16 through 30 days past due, $15 per day for 31 through 45
6days past due, and $20 per day for the 46th day and every day
7thereafter. These amounts may be reduced at the Comptroller's
8discretion. In the event the required audit report is not filed
9within 60 days of such notice, the Comptroller shall cause such
10audit to be made by an auditor or auditors accountant or
11accountants. The Comptroller may decline to order an audit and
12the preparation of an audit report if an initial examination of
13the books and records of the municipality indicates that books
14and records of the municipality are inadequate or unavailable
15to support the preparation of the audit report or the
16supplemental report due to the passage of time or the
17occurrence of a natural disaster. All fees collected pursuant
18to this Section shall be deposited into the Comptroller's
19Administrative Fund. In the event the Comptroller causes an
20audit to be made in accordance with the requirements of this
21Section, the municipality shall pay to the Comptroller
22reasonable compensation and expenses to reimburse her for the
23cost of preparing or completing such report. Moneys paid to the
24Comptroller pursuant to the preceding sentence shall be
25deposited into the Comptroller's Audit Expense Revolving Fund.
26(Source: P.A. 98-497, eff. 8-16-13; 98-922, eff. 8-15-14.)
 

 

 

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1    (65 ILCS 5/8-8-4)  (from Ch. 24, par. 8-8-4)
2    Sec. 8-8-4. Overdue reports.
3    (a) In the event the required audit report for a
4municipality is not filed with the Comptroller in accordance
5with Section 8-8-7 within 180 days after the close of the
6fiscal year of the municipality, the Comptroller shall notify
7the corporate authorities of that municipality in writing that
8the audit report is due, and may also grant an extension of
9time of 60 days, for the filing of the audit report. In the
10event the required audit report is not filed within the time
11specified in such written notice, the Comptroller shall cause
12such audit to be made by an auditor or auditors accountant or
13accountants. In the event the required annual or supplemental
14report for a municipality is not filed within 6 months after
15the close of the fiscal year of the municipality, the
16Comptroller shall notify the corporate authorities of that
17municipality in writing that the annual or supplemental report
18is due and may grant an extension in time of 60 days for the
19filing of such annual or supplemental report.
20    (b) In the event the annual or supplemental report is not
21filed within the time extended by the Comptroller, the
22Comptroller shall cause such annual or supplemental report to
23be prepared or completed and the municipality shall pay to the
24Comptroller reasonable compensation and expenses to reimburse
25him for the cost of preparing or completing such annual or

 

 

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1supplemental report. Moneys paid to the Comptroller pursuant to
2the preceding sentence shall be deposited into the
3Comptroller's Audit Expense Revolving Fund.
4    (c) The Comptroller may decline to order an audit or the
5completion of the supplemental report if an initial examination
6of the books and records of the municipality indicates that
7books and records of the municipality are inadequate or
8unavailable to support the preparation of the audit report or
9the supplemental report due to the passage of time or the
10occurrence of a natural disaster.
11    (d) The State Comptroller may grant extensions for
12delinquent audits or reports. The Comptroller may charge a
13municipality a fee for a delinquent audit or report of $5 per
14day for the first 15 days past due, $10 per day for 16 through
1530 days past due, $15 per day for 31 through 45 days past due,
16and $20 per day for the 46th day and every day thereafter.
17These amounts may be reduced at the Comptroller's discretion.
18All fees collected under this subsection (d) shall be deposited
19into the Comptroller's Administrative Fund.
20(Source: P.A. 98-922, eff. 8-15-14; 99-459, eff. 8-25-15.)
 
21    (65 ILCS 5/8-8-5)  (from Ch. 24, par. 8-8-5)
22    Sec. 8-8-5. (a) (Blank). Prior to fiscal year 2019, the
23audit shall be made in accordance with generally accepted
24auditing standards. Reporting on the financial position and
25results of financial operations for each fund of the

 

 

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1municipality shall be in accordance with generally accepted
2accounting principles or other comprehensive basis of
3accounting. Each audit report shall include only financial
4information, findings, and conclusions that are adequately
5supported by evidence in the auditor's working papers to
6demonstrate or prove, when called upon, the basis for the
7matters reported and their correctness and reasonableness. In
8connection with this, each municipality shall retain the right
9of inspection of the auditor's working papers and shall make
10them available to the Comptroller, or his or her designee, upon
11request. The audit report shall consist of the professional
12opinion of the auditor or auditors with respect to the
13financial statements or, if an opinion cannot be expressed, a
14declaration that the auditor is unable to express such opinion
15and an explanation of the reasons he or she cannot do so.
16Municipal authorities shall not impose limitations on the scope
17of the audit to the extent that the effect of such limitations
18will result in the qualification of the opinion of the auditor
19or auditors. Each audit report filed with the Comptroller shall
20be accompanied by a copy of each official statement or other
21offering of materials prepared in connection with the issuance
22of indebtedness of the municipality since the filing of the
23last audit report.
24    (b) For fiscal year 2019 and each fiscal year thereafter,
25the audit shall be made in accordance with generally accepted
26auditing standards. Each audit report shall include only

 

 

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1financial information, findings, and conclusions that are
2adequately supported by evidence in the auditor's working
3papers to demonstrate or prove, when called upon, the basis for
4the matters reported and their correctness and reasonableness.
5In connection with this, each municipality shall retain the
6right of inspection of the auditor's working papers and shall
7make them available to the Comptroller, or his or her designee,
8upon request. The audit report shall include the financial
9statements for governmental activities, business-type
10activities, discretely presented component units, and each
11major fund and aggregated nonmajor fund. The audit report shall
12also include also consist of the professional opinion or
13opinions of the an auditor or auditors with respect to the
14financial statements or, if an opinion cannot be expressed, a
15declaration that the auditor is unable to express an opinion
16and an explanation of the reasons he or she cannot do so. Each
17auditor's report shall include a representation by the auditor
18or auditors conducting the audit has been performed in
19accordance with generally accepted auditing standards.
20Municipal authorities shall not impose limitations on the scope
21of the audit to the extent that the effect of the limitations
22will result in the modification qualification of the opinion or
23opinions of the auditor or auditors. Each audit report filed
24with the Comptroller shall be accompanied by a copy of each
25official statement or other offering of materials prepared in
26connection with the issuance of indebtedness of the

 

 

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1municipality since the filing of the last audit report.
2    (c) For fiscal year 2019 and each fiscal year thereafter,
3audit reports shall contain financial statements prepared in
4accordance with generally accepted accounting principles and
5audited in accordance with generally accepted auditing
6standards if the last audit report filed preceding fiscal year
72019 expressed an unmodified or modified opinion by the
8independent auditor that the financial statements were
9prepared presented in accordance with generally accepted
10accounting principles.
11    (d) For fiscal year 2019 and each fiscal year thereafter,
12audit reports containing financial statements prepared in
13accordance with an other comprehensive basis of accounting may
14follow the best practices and guidelines outlined by the
15American Institute of Certified Public Accountants and shall be
16audited in accordance with generally accepted auditing
17standards. If the corporate authority of a municipality submits
18an audit report containing financial statements prepared in
19accordance with generally accepted accounting principles,
20thereafter all future audit reports shall also contain
21financial statements prepared presented in accordance with
22generally accepted accounting principles.
23    (e) Audits may be made on financial statements prepared
24using either an accrual or cash basis of accounting, depending
25upon the system followed by the municipality, and audit reports
26shall comply with this Section.

 

 

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1(Source: P.A. 100-837, eff. 8-13-18.)
 
2    (65 ILCS 5/8-8-7)  (from Ch. 24, par. 8-8-7)
3    Sec. 8-8-7. When the auditor or auditors accountant or
4accountants have completed the audit, not less than 2 copies of
5a report of the audit shall be made and signed by the
6accountant making such audit, and shall immediately be filed
7with the municipality audited. Each audit report shall include
8the certification of the auditor or auditors accountant or
9accountants making the audit that the audit has been performed
10in compliance with generally accepted auditing standards. The
11municipality shall immediately make one copy of the report, or
12one copy of the report authorized by this Division 8 in lieu of
13an audit report, a part of its public records and at all times
14thereafter this copy shall be open to public inspection. In
15addition, the municipality shall file one copy of the report
16with the Comptroller. An audit report which fails to meet the
17requirements of this Act shall be rejected by the Comptroller
18and returned to the municipal authorities for corrective
19action. Nothing in this section shall be construed as
20preventing a municipality, in filing its audit report with the
21Comptroller, from transmitting with such report any comment or
22explanation that it may desire to make concerning that report.
23The audit report filed with the Comptroller, together with any
24accompanying comment or explanation, shall immediately become
25a part of his public records and shall at all times thereafter

 

 

SB1806- 32 -LRB101 10244 AWJ 55348 b

1be open to public inspection. It shall be unlawful for the
2auditor accountant to make any disclosure of the result of any
3examination of any public account excepting as he does so
4directly to the corporate authorities of the municipality
5audited.
6(Source: P.A. 85-1000.)
 
7    (65 ILCS 5/8-8-8)  (from Ch. 24, par. 8-8-8)
8    Sec. 8-8-8. The expenses of the audit and investigation of
9public accounts provided for in Division 8, whether ordered by
10the corporate authorities or the Comptroller, shall be paid by
11the municipality for which the audit is made. Payment shall be
12ordered by the corporate authorities out of the funds of the
13municipality and it shall be the duty of such authorities to
14make provisions for payment. Contracts for the performance of
15audits required by this Division 8 may be entered into without
16competitive bidding. If the audit is made by an auditor or
17auditors accountant or accountants retained by the
18Comptroller, the municipality shall pay to the Comptroller
19reasonable compensation and expenses to reimburse him for the
20cost of making such audit.
21    The corporate authorities of all municipalities coming
22under the provisions of this Division 8 shall have the power to
23annually levy a "Municipal Auditing Tax" upon all of the
24taxable property of the municipalities at the rate on the
25dollar which will produce an amount which will equal a sum

 

 

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1sufficient to meet the cost of all auditing and reports
2thereunder. Such municipal auditing tax shall be held in a
3special fund and used for no other purpose than the payment of
4expenses occasioned by this Division 8.
5    The tax authorized by this Section shall be in addition to
6taxes for general corporate purposes authorized under Section
78-3-1 of this Act.
8(Source: P.A. 81-824.)