HF2083

Purpose of the Bill

The purpose of this bill is to change the financial threshold for cities in Minnesota, determining when they must conduct annual audits. This adjustment reflects inflation and aims to relieve smaller cities of the burden of annual audits if their revenues are below a certain level.

Main Provisions

• The bill amends the current law on when cities need to conduct an annual audit of their financial affairs.
• If a city combines the offices of clerk and treasurer, and the total annual revenue from all funds exceeds a specific amount, an annual audit is required.
• If the revenue is at or below a specified amount, the city is only required to conduct an audit every five years.

Significant Changes to Existing Law

• Previously, the annual revenue that required a city to undergo an annual audit was set at $150,000.
• The bill increases this revenue threshold to $500,000 starting in 2025.
• After 2025, this threshold will be adjusted annually for inflation based on the implicit price deflator for state and local expenditures noted by the U.S. Department of Commerce.

Relevant Terms

local government, annual audit, revenue threshold, city finances, state auditor, certified public accountant, inflation adjustment, financial transparency, combined offices, clerk, treasurer, implicit price deflator.