2023 Tennessee Code › Title 7 - CONSOLIDATED GOVERNMENTS AND LOCAL GOVERNMENTAL FUNCTIONS AND ENTITIES (§§ 7-1-101 — 7-91-104) › SPECIAL DISTRICTS (§§ 7-81-101 — 7-91-104) › Chapter 82 - UTILITY DISTRICT LAW OF 1937 (§§ 7-82-101 — 7-82-804) › Part 4 - AUDIT AND RATES (§§ 7-82-401 — 7-82-403) › Section 7-82-401 - Audited annual financial report - Accounting manual - Books and records

(a)
(1)
The commissioners of each utility district shall cause an audited annual financial report to be made of the books and records of their district. The comptroller of the treasury, through the department of audit, is responsible for determining that such audits are prepared in accordance with generally accepted governmental auditing standards, and that such audits meet the minimum standards prescribed by the comptroller of the treasury.
(2)
In all counties and districts, the comptroller of the treasury shall prepare a uniform audit manual as is required to assure that the books and records are kept in accordance with generally accepted accounting principles and that the minimum audit standards prescribed by the comptroller are met. The manual shall not be applied to invalidate obligations contained in bond resolutions or other debt contracts, nor to modify any substantive legal powers or requirements applicable to utility districts.
(b)
The audits shall be prepared by certified public accountants, public accountants or by the department of audit. In the event the governing body of the utility district shall fail or refuse to have the audit prepared, then the comptroller of the treasury may appoint a certified public accountant, or public accountant or direct the department to prepare the audit, the cost of such audit to be paid by the utility district.
(c)
The comptroller of the treasury is authorized to modify the requirements for an audit as set out in this section for utility districts whose activity, in the comptroller of the treasury's judgment, is not sufficient to justify the expenses of a complete audit. Furthermore, the comptroller of the treasury is authorized to direct the department of audit to make an audit or financial review of the books and records of utility districts.
(d)
A copy of such annual statement and audit shall be filed with the county mayor or mayors where publication is required in accordance with this section and §
7-82-608
.
(e)
Audits performed by the internal audit staffs of the utility districts must be conducted in accordance with the standards established by the comptroller of the treasury pursuant to §
4-3-304(9)
.
(f)
(1)
Any utility district that is a financially distressed utility district is subject to the supervision and evaluation of the Tennessee board of utility regulation created pursuant to part 7 of this chapter.
(2)
A government joint venture that supplies or treats water or wastewater for wholesale use only to other governments does not fall under the jurisdiction of the Tennessee board of utility regulation for the purpose of reporting negative change in net position annually, but must be referred to the board if the government joint venture is in a deficit or default position as described in subdivision (f)(3).
(3)
For the purposes of this chapter, "financially distressed utility district" means a utility district, and its system or systems, that, as shown by the audited annual financial reports, has a deficit in total net position in any one (1) year, has a deficit unrestricted net position in any one (1) year, is in default on an indebtedness, or has a negative change in net position for two (2) consecutive years without regard to any grants or capital contributions. For purposes of this section, "change in net position" means total revenues less all grants, capital contributions, and expenses.
(g)
[Deleted by 2023 amendment.]
(h)
[Deleted by 2023 amendment.]
(i)
[Deleted by 2023 amendment.]
Amended by 2023 Tenn. Acts, ch. 463, s 18, eff. 7/1/2023.
Amended by 2022 Tenn. Acts, ch. 657, s 5, eff. 3/15/2022.
Amended by 2021 Tenn. Acts, ch. 226, s 1, eff. 4/22/2021.
Amended by 2018 Tenn. Acts, ch. 646, s 1, eff. 4/9/2018.
Amended by 2018 Tenn. Acts, ch. 495, s 4, eff. 2/22/2018.
Amended by 2017 Tenn. Acts, ch. 132, s 1, eff. 4/17/2017.
Amended by 2017 Tenn. Acts, ch. 129, Secs.s 3, s 4 eff. 4/17/2017.
Amended by 2015 Tenn. Acts, ch. 140, s 9, eff. 4/17/2015.
Amended by 2014 Tenn. Acts, ch. 628, Secs.s 7, s 8 eff. 4/4/2014.
Amended by 2013 Tenn. Acts, ch. 236, s 6, eff. 4/19/2013.
Amended by 2013 Tenn. Acts, ch. 141, Secs.s 2, s 3 eff. 4/12/2013.
Acts 1949, ch. 256, § 1; C. Supp. 1950, § 3695.46 (Williams, § 3695.43a); Acts 1968, ch. 529, § 4; 1975, ch. 139, § 1; impl. am. Acts 1978, ch. 934, §§ 16, 36; T.C.A. (orig. ed.), § 6-2617; Acts 1984, ch. 794, § 4; 1987, ch. 422, § 7; 1989, ch. 139, § 5; 1989, ch. 221, §§ 6, 7; 1989, ch. 591, § 113; 2004, ch. 619, § 7; 2007 , ch. 243, § 1; 2008 , ch. 700, § 1; 2009 , ch. 72, § 1; 2010 , ch. 876, §§ 1, 3; 2011 , ch. 392, §§ 1, 4, 12; 2012 , ch. 604, § 6.