Arkansas Code of 1987 (2023) › Title 14 - LOCAL GOVERNMENT (§§ 14-1-101 — 14-387-706) › Subtitle 3 - MUNICIPAL GOVERNMENT (§§ 14-37-101 — 14-62-115) › Chapter 58 - FISCAL AFFAIRS OF CITIES AND INCORPORATED TOWNS (§§ 14-58-101 — 14-58-1001) › Subchapter 1 - GENERAL PROVISIONS (§§ 14-58-101 — 14-58-105) › Section 14-58-101 - Audit by independent accountant

(a)
The audit or agreed-upon procedures engagement of every municipality shall be made by Arkansas Legislative Audit or other independent persons licensed and in good standing to practice accounting by the Arkansas State Board of Public Accountancy, to be selected by the governing body of the municipality.
(b)
Any statutorily required audit of a municipality shall include, as a minimum, a review and comments on substantial compliance with each of the following Arkansas laws:
(1)
Arkansas Municipal Accounting Law, §
14-59-101
et seq.;
(2)
Arkansas District Courts Accounting Law, §
16-10-201
et seq.;
(3)
Improvement contracts, §§
22-9-202
-
22-9-204
;
(4)
Budgets, purchases, and payments of claims, etc., §
14-58-201
et seq. and §
14-58-301
et seq.;
(5)
Investment of public funds, §
19-1-501
et seq.; and
(6)
Deposit of public funds, §§
19-8-101
-
19-8-107
.
(c)
(1)
For the purposes of this section, an audit shall be planned, conducted and the results of the work reported in accordance with generally accepted government auditing standards, if applicable.
(2)
(A)
The financial statements of municipalities shall be presented on a fund basis with, as a minimum:
(i)
The general fund and the street fund presented separately; and
(ii)
All other funds included in the audit presented in the aggregate.
(B)
The financial statements shall consist of the following:
(i)
A balance sheet;
(ii)
A statement of revenues (receipts), expenditures (disbursements), and changes in fund equity (balances);
(iii)
A comparison of the final adopted budget to the actual expenditures for the general fund and street fund of the entity; and
(iv)
Notes to financial statements.
(C)
The report shall include as supplemental information a schedule of general fixed assets, including land, buildings, and equipment.
(3)
In the alternative to subdivision (c)(2) of this section, the governing body of the municipality may adopt an annual resolution requiring their audit to be performed in accordance with the guidelines and format prescribed by the Governmental Accounting Standards Board, the American Institute of Certified Public Accountants, and the United States Government Accountability Office, if applicable.
(d)
(1)
As an alternative to an audit, the municipal governing body may authorize an agreed-upon procedures engagement of the records and accounts.
(2)
For the purposes of this section, agreed-upon procedures engagements shall be conducted in accordance with standards established by the American Institute of Certified Public Accountants and subject to the minimum procedures prescribed by the Legislative Auditor.
(e)
The Legislative Joint Auditing Committee shall monitor the reports prescribed in this section to ensure that the reports meet the needs of the General Assembly, the public entities, and the general public.
Acts 1977, No. 160, § 1; 1985, No. 15, § 1; A.S.A. 1947, § 19-4416.1; Acts 2001, No. 1052, § 1; 2005, No. 499, § 1.