More on municipal audits

I reported last week that the Alabama Department of Examiners is turning up the heat on municipal officers to get compliant on their audits. The Society is working through how best to support both member firms, affected municipalities and the Department. The Department’s Guidelines for Audits and Annual Reports (Guidelines for Municipal Audits Revised.pdf), dated October 1, 2022, is a handy reference. Not all municipalities must be audited, but all must file reports. The smallest municipalities require agreed-upon procedures.

We do not yet have a sense of the number of municipalities currently in or out of compliance. We believe the goal should be 100%, but getting there may be a challenge with several obstacles to overcome. We are committed to working through those with the best interests of CPAs and the taxpaying public in mind.

And now, quick updates:

1. HB250 (Garrett) and its companion bill SB79 (Roberts), intended to clear the way for Trump accounts in Alabama and to provide an indefinite extension to a provision allowing employers to pay employee student loans as a tax-free benefit, have passed their respective committees (the bill has yet to clear either the House or Senate Floor, despite this report mistakenly saying it had last week).
2. SB227 (Elliott) creates the Office of Occupational and Professional Licensing within the Alabama Department of Workforce. This bill gives the Joint Sunset Committee an option to refer board management to an in-house staff to serve as the Executive Director, licensing, investigation, and other agents of those boards. There is a good bit of background on this bill that we’ll write about in a future report. In the meantime, we’ll be monitoring this bill.
3. The Society has submitted a comment to the Alabama Department of Revenue in response to Proposed Rule 810-6-4-21.03 relating to local counties and municipalities decoupling from state sales and use tax exemptions. We are advocating that their proposed rule apply only to state exemptions granted after May 6, 2025.
4. The Watchlist on our Advocacy web page is being constantly updated. Check in often.

There have been 677 bills filed so far. If we’ve missed something or you have any questions, please do not hesitate to contact me at rpearson@alabama.cpa.