KentuckySB 1922026 Regular SessionSenateWALLET

AN ACT relating to local entities and declaring an emergency.

Sponsored By: Amanda Mays Bledsoe (Republican)

Signed by Governor

AccountantsAdvertisingAuditor Of Public AccountsAudits And AuditorsCitiesFinancial ResponsibilityLocal GovernmentPublic Records And ReportsPublicationsReports MandatedLocal Mandate

Personalized for You

How does this bill affect your finances?

Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.

Free to download

Bill Overview

Analyzed Economic Effects

5 provisions identified: 0 benefits, 2 costs, 3 mixed.

New rules for fire district boards

Fire protection and volunteer fire district boards now have seven members: four elected and three appointed by the county judge/executive, or by the mayor in a consolidated local government. Two firefighter‑elected trustees must be full‑time paid employees or members who live in the district, and elected trustees must be Kentucky citizens age 21 or older. Two property‑owner trustees must own property taxed for fire protection, live in the district, and not be active firefighters. Appointed trustees must live locally, with added residency rules for first‑class city counties and consolidated governments. If a trustee or a fire‑corporation director moves out of the area served, the seat is vacant; on the law’s effective date, any member who does not meet the new rules is vacated. An elected firefighter trustee may be removed for cause after a noticed hearing, with fiscal court or legislative council approval, and may appeal within 10 days on an abuse‑of‑discretion standard. These governance rules take effect immediately.

State can withhold funds from cities

If a city fails to file its audit or required financial statement, the state withholds funds it holds for that city until the city complies. Nondiscretionary payments for services to the state are not withheld.

City audit deadlines and small-city options

Cities must finish annual audits by March 1 and send them to the state by April 1. Cities that get and spend under $15,000,000 can use cash or modified‑cash accounting instead of GAAP. Cities with 3,000 people or fewer may audit every other year and send a yearly financial statement by October 1 in even years. Cities with under $500,000 in receipts and spending and no long‑term debt may skip the audit that year, but must send a KRS 424.220 statement by October 1. Audit contracts must include set duties, and the state Auditor can review a CPA’s work papers. Cities must give the Auditor a copy of any audit on request.

New agreed-upon procedures option for cities

Beginning July 1, 2027, eligible cities may choose an agreed‑upon procedures (AUP) review instead of a full audit. To qualify, the city must have prior‑year compliance, no special examination, and under $15,000,000 in receipts and spending, and not be subject to stricter audit rules. The AUP must at least confirm cash and bank balances, fund balances and transfers, investment legality, receipts and payroll, debt and compliance, and whether spending exceeded appropriations; it must also review local government economic assistance funds when used. The AUP is due by March 1, must be sent to the state by April 1, and the city must publish a notice within 30 days; citizens can get copies for up to $0.25 per page. A compliant AUP counts where state law requires an audit, unless other statutes or courts require otherwise. Cities that skip audits under the under‑$500,000 rule for more than four straight years after July 1, 2022 must get an AUP in the fifth year, and cities two or more years behind may apply for a single AUP to regain compliance.

Public access to city financial reports

Within 30 days after the audit is presented, a city must publish an ad with the auditor’s opinion and a budget‑to‑actual comparison. Copies must be available to citizens for no more than $0.25 per page. If no annual audit is done, the city must run a display ad within 30 days after sending its financial statement to the state. City officers do not have to file the itemized sworn statement if the city completed an audit or an agreed‑upon procedures review.

Sponsors & Cosponsors

Sponsor

Amanda Mays Bledsoe
Republican • Senate

Cosponsors

Scott Madon
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 168 • No: 0

Senate vote • 3/31/2026

passed

Yes: 36 • No: 0

House vote • 3/27/2026

3rd reading, passed

Yes: 95 • No: 0

Senate vote • 3/2/2026