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 GovernmentLocal MandatePublic Records And ReportsPublicationsReports Mandated

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 2 benefits, 0 costs, 2 mixed.

Agreed-upon audit alternative for cities

Beginning July 1, 2027, eligible cities may choose an agreed‑upon procedures review instead of a full audit. The city must have complied the prior year, have under $15,000,000 in receipts and spending, and have no recent special exam or stricter legal audit rule. The review must check cash reconciliations, bank balances, funds and transfers, investments, receipts and payroll, debts, spending versus budget, and any local government economic assistance funds. It must be finished by March 1 and sent to the Department for Local Government by April 1. The city must sign a contract with the Auditor or a CPA, allow the Auditor to review CPA work papers, and the final report counts for state reporting.

New local fire board residency rules

Fire protection district boards now have seven members: four elected and three appointed. Two elected firefighter trustees must be full‑time paid employees of the district or residents; two elected property‑owner trustees must own taxed property, live in the district, be at least 18, and not be active firefighters. Appointed trustees must live in the district. Seats become vacant if members no longer live in the district, and directors of fire department corporations must also live in the area served. On the law’s effective date, seats held by members who do not meet these rules become vacant and are filled under state law. Elections are held the fourth Saturday in June from 11 a.m. to 2 p.m. with 30 days’ notice, and the treasurer must be bonded.

Simpler accounting and small-city audits

Cities with under $15,000,000 in annual receipts and spending may use cash or modified‑cash accounting. Every city must finish its audit by March 1 and send it to the state by April 1. A city with 3,000 people or fewer may choose audits every other year: audit and submit by March 1/April 1 in odd years, and send its financial statement by October 1 in even years. A city with under $500,000 in receipts and spending and no long‑term debt does not need a full audit that year but must file its financial statement by October 1. If that small‑city exemption applies for more than four straight years after July 1, 2022, the city must complete an agreed‑upon procedures review in the fifth year.

Stronger audit transparency and penalties

Within 30 days after presenting an audit or procedures report, the city must publish an ad with the auditor’s opinion and a general‑fund budget‑to‑actual schedule. The ad must state the full report is on file and that copies can be provided for up to $0.25 per page. Any city resident or property owner can sue to enforce these rules; violations carry $50 to $500 fines, and the loser pays costs and a reasonable attorney fee. The Department for Local Government may grant extensions up to 18 months. If a city still misses, the state withholds discretionary state‑held funds until the city files; payments for services and city utilities are not withheld. After a special audit, the Auditor bills the city for actual costs, and cities must give the Auditor audit or procedures reports on request.

Sponsors & Cosponsors

Sponsor

Amanda Mays Bledsoe
Republican • Senate

Cosponsors

David Meade
Republican • House
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