TO AMEND THE ARKANSAS MUNICIPAL ACCOUNTING LAW; TO AMEND THE DUTIES OF A MUNICIPAL TREASURER; AND TO REQUIRE TRAINING FOR AN INDIVIDUAL CHARGED WITH DUTIES UNDER THE ARKANSAS MUNICIPAL ACCOUNTING LAW.

Arkansas towns face stricter accounting rules

Beginning July 1, 2026, elected and appointed municipal treasurers must complete eight hours of training. The Arkansas Municipal League provides the training with Arkansas Legislative Audit. New treasurers have 180 days after taking office; other employees and private contractors assigned accounting duties have 180 days after starting. A municipality remains out of compliance until a treasurer who misses the deadline completes training. Treasurers must keep records required by state law and meet duties set by local ordinance. Treasurers or approved representatives must give the council or board of directors a monthly financial report. Local governing bodies may reassign duties when a treasurer fails to comply or requests reassignment. They may use another municipal employee or a qualified private person or entity. A qualified private person must live in Arkansas and have prior government or municipal accounting experience in Arkansas, or complete the required training. Only municipal employees may collect money. Private providers may make payments only for payroll, bonded debt, or construction funded with bond proceeds. Before assigning or contracting for private payment services, the governing body must adopt an ordinance setting accounting controls and audit-ready documentation. The treasurer must approve each payment before it is made. Private providers must be adequately insured and bonded and follow industry standards. The law also sets a compliance process tied to withholding state turnback funds. After Arkansas Legislative Audit reports noncompliance, the Legislative Joint Auditing Committee must notify the mayor and council. The municipality must require treasurer training and record both the notice and training requirement in its meeting minutes. It has 60 days to bring its records into substantial compliance. Arkansas Legislative Audit then reviews the records and reports to the committee. If substantial compliance is not reached, the governing body must reassign specific duties to another employee or hire a qualified private provider.