Existing law generally requires county auditors to conduct or contract for annual audits of special districts. Small special districts with revenues and expenditures transacted through the County’s financial system and with annual revenues less than $150,000 may use less burdensome alternatives, including financial reviews, agreed-upon procedures engagements, or annual financial compilations when statutory requirements are satisfied. The authority for special districts to use some of these alternatives was scheduled to expire January 1, 2027.
SB 992 extends the qualification for special districts’ use of alternative audit provisions by increasing the applicable annual revenue threshold from $150,000 to $250,000 through January 1, 2037. It also allows a special district with annual revenues below $50,000, after using annual financial compilations for five consecutive years, to use a financial review instead of the otherwise required audit procedure.
Eligible special districts may use these alternatives but are not required to do so. Districts wishing to take advantage of the reduced audit requirements should confirm that their annual revenues and prior audit history satisfy the statutory conditions.
SB 992 amends section 26909 of the Government Code.
