AlabamaAlabama cities follow spending-based audit schedules
Starting October 1, 2026, Alabama cities use spending-based audit schedules, and councils of the smallest municipalities may choose a yearly report instead.
What it does
Municipalities spending $500,000 or more a year receive an independent audit each year; those spending less receive one every two years.
For a municipality spending less than $300,000 a year, the council may choose a yearly report instead of a full audit every two years. The report must follow state procedures and go to the state and council.
Argument forFor a municipality under the lower spending threshold, the council could choose a yearly report instead of arranging an independent audit every two years.
Argument againstEven when a council chooses the yearly report option, town staff may need to gather cash records, bank balances, and tax information each year.
More detail
Mayors or city managers must arrange independent audits each year for municipalities at or above the higher spending threshold and every two years for those below it. The schedule applies to Alabama municipalities, based on their annual spending. Each audit covers the municipality’s funds and activities. A two-year audit covers each fiscal year since the prior audit. The law takes effect October 1, 2026.
A city council may choose a yearly report instead of the two-year audit for a municipality below the lower spending threshold. The option applies only to municipalities spending less than $300,000 a year, and the city council decides whether to use it. The report must follow procedures set by the Department of Examiners of Public Accounts and cover the listed financial records and other matters, including state-law compliance and motor fuel tax proceeds. The report goes to the department and counts as an annual audit report. It must also go to the council at its first meeting after completion and be included in the council minutes. The law takes effect October 1, 2026.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Apr 16EnactedBecame Law
- Apr 8Signature Requested
- Apr 8Delivered to GovernorTo Governor
- Apr 7Third Reading in Second House
- Vote recorded Third Reading in Second House. Result: pass.Upper
- Vote recorded Motion to Read a Third Time and Pass - Adopted Roll Call 1206. Result: pass.Upper
- Apr 7Motion to Read a Third Time and Pass - Adopted Roll Call 1206Passed Senate
- Apr 7Ready to Enroll
- Apr 7Enrolled
- Mar 3Reported Out of Committee Second House
- Mar 3Read for the Second Time and placed on the Calendar (County and Municipal Government)Minor
- Jan 20Third Reading in House of Origin
- Vote recorded Third Reading in House of Origin. Result: pass.Lower
- Vote recorded Motion to Read a Third Time and Pass - Adopted Roll Call 58. Result: pass.Lower
- Jan 20Motion to Read a Third Time and Pass - Adopted Roll Call 58Passed House
- Jan 20Read for the first time and referred to the Senate Committee on County and Municipal GovernmentMinor
- Jan 20Pending Committee Action in Second House (County and Municipal Government)
- Jan 14Reported Out of Committee House of Origin
- Jan 14Read for the Second Time and placed on the Calendar (County and Municipal Government)Minor
- Jan 13Read for the first time and referred to the House Committee on County and Municipal GovernmentMinor
- Jan 13Pending Committee Action in House of Origin (County and Municipal Government)
- 2025
- Jun 25FiledIntroduced
Government & Ethics