Special Purpose Governmental Entities (SPGE), which include most public libraries, are required to perform audits or attestation engagements under KRS 65A.030.
For fiscal periods beginning on or after July 1, 2014, KRS 65A.030 specifies that:
- Libraries that receive or expend less than $100,000 in a fiscal year will contract for the application of an attestation engagement once every four years and will prepare an annual financial statement.
- Libraries that receive or expend $100,000-$499,999 in a fiscal year will contract for an independent audit every four years and will prepare an annual financial statement.
- Libraries that receive or expend $500,000 or more in a fiscal year will contract for an independent audit annually and will prepare an annual financial statement.
A public library's year-end budget actuals, as reported to the Department for Local Government (DLG), determine the library's audit or attestation engagement requirements for that fiscal year. A variation in income or expenses from one fiscal year to the next may affect the public library's audit or attestation engagement requirements for the year in which the difference occurred. One-time grant funding may be exempted upon approval by the DLG.
KRS 65A.030 stipulates that the audit or attestation engagement must be performed by a Certified Public Accountant (CPA) and conform to “generally accepted auditing and attestation standards." The library board may hire an independent CPA or may contract with the Kentucky Auditor of Public Accounts. The library board should ensure that the CPA hired to perform an audit uses the Governmental Accounting Standards Board (GASB) accounting and financial reporting standards. CPAs conducting an attestation engagement should use the “General Agreed Upon Procedures for Special Purpose Government Entities."
KRS 65A.030(2)(b) and (c) require the audit or attestation engagement to be completed no later than 12 months following the close of the fiscal year. The public library should upload the final audit or attestation engagement to the DLG SPGE Portal as a PDF file within 15 days of receipt.
SPGEs are required to comply with KRS 65A.030 to receive funds from Kentucky governmental agencies. KDLA will obtain compliance data for public libraries from the DLG SPGE Portal, as per KRS 171.180. KDLA cannot disburse grants, state aid, and other funding to noncompliant public libraries.
Libraries with extenuating circumstances that affect their ability to meet the requirements in KRS 65A.030 should contact the DLG for guidance. Library boards having difficulty retaining a CPA may contact their Regional Library Consultant for a list of firms that have completed audits or attestation engagements for other SPGEs.
Revised July 14, 2025