As part of the accountability for public funds, Special Purpose Governmental Entities (SPGE), which includes libraries, are required to perform audits 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.
This statute also stipulates that the audit or attestation engagement be performed by an independent certified public accountant employed by the governing body. Or, the district may contract with the Kentucky Auditor of Public Accounts to perform the audit.
An additional requirement of this statute is that “generally accepted governmental auditing or attestation standards” be used to perform these audits or attestation engagements. The library board, therefore, needs to ensure that the CPA hired to perform the audit or attestation engagement is familiar with GASB (Governmental Accounting Standards Board) accounting and financial reporting standards. See the March 2016 Trustee Tip for more tips on choosing an auditor.
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 first being due on June 30, 2016. The SPGE will submit these documents to the Department for Local Government (DLG) as a PDF file. This submission is due to the DLG within 15 days of receipt of the completed audit or attestation engagement.
Beginning in June 2015, public libraries are no longer required to submit copies of their required audits to KDLA in order to receive state aid. From this point on, KDLA will obtain audit data from the DLG website in accordance with KRS 171.180 before issuing state aid. The library audit will be checked for significant issues and the library will be contacted if problems of concern to KDLA are noted. The library will be given opportunity to correct identified issues, but in case of significant issues, state aid may be withheld until corrections are made by the library. Libraries without the required audit posted to the DLG website may also have their state aid delayed until the audit is completed and posted.
Revised March 17, 2016
return to Funding and Financial Operations page