H.F. 2524 Section 1. Section 11.6, subsection 1, paragraph a, 1 subparagraph (1), Code 2026, is amended to read as follows: 2 (1) Except for entities organized under chapter 28E having 3 gross receipts of one hundred thousand dollars or less in a 4 fiscal year, the financial condition and transactions of all 5 government subdivisions shall be audited annually, except 6 that cities having a population of less than two thousand 7 and budgeted gross expenditures of one million dollars or 8 more in a fiscal year shall be subject to a required fiscal 9 year examination an audit for that fiscal year according to 10 procedures established by the office of auditor of state, 11 and cities having a population of less than two thousand and 12 budgeted gross expenditures of less than one million dollars 13 in a fiscal year shall be subject to periodic examination by 14 the auditor of state according to procedures established by the 15 auditor of state, and may be examined as otherwise provided 16 in this section . However, a city having a population of less 17 than two thousand and budgeted gross expenditures of one 18 million dollars or more in a fiscal year shall not be subject 19 to a required fiscal year examination until the city has two 20 consecutive years of budgeted gross expenditures of one million 21 dollars or more in both fiscal years, and such examination 22 shall be conducted during the second of such fiscal years. 23 A city meeting the requirements for a periodic examination 24 shall be subject to an examination under this section at least 25 once during an eight-year period at a time determined by the 26 auditor of state an audit at least once every five years . 27 The audit of school districts shall include an audit of all 28 school funds including categorical funding provided by the 29 state, the certified annual financial report, the certified 30 enrollment as provided in section 257.6 , supplementary 31 weighting as provided in section 257.11 , the revenues and 32 expenditures of any nonprofit school organization established 33 pursuant to section 279.62 , and entrepreneurial education 34 funds established pursuant to section 298A.15 . Differences in 35 -1- LSB 6179YH (3) 91 ms/js 1/ 4

H.F. 2524 certified enrollment shall be reported to the department of 1 management. The audit of school districts shall include at a 2 minimum a determination that the laws of the state are being 3 followed, that categorical funding is not used to supplant 4 other funding except as otherwise provided, that supplementary 5 weighting is pursuant to an eligible sharing condition, and 6 that postsecondary courses provided in accordance with section 7 257.11 and chapter 261E supplement, rather than supplant, 8 school district courses. The audit of a city that owns or 9 operates a municipal utility providing local exchange services 10 pursuant to chapter 476 shall include performing tests of 11 the city’s compliance with section 388.10 . The audit of a 12 city that owns or operates a municipal utility providing 13 telecommunications services pursuant to section 388.10 shall 14 include performing tests of the city’s compliance with section 15 388.10 . 16 Sec. 2. Section 372.13, subsection 6, Code 2026, is amended 17 to read as follows: 18 6. Within fifteen days following a regular or special 19 meeting of the council, the clerk shall cause the minutes of 20 the proceedings of the council, including the total expenditure 21 from each city fund, to be delivered to a newspaper of general 22 circulation in the city for publication. The publication shall 23 include a list of all claims allowed and a summary of all 24 receipts and shall show the gross amount of the claims. The 25 list of claims allowed shall show the name of the person or 26 firm making the claim, the reason for the claim, and the amount 27 of the claim. If the reason for the claims is the same, two 28 or more claims made by the same vendor, supplier, or claimant 29 may be consolidated if the number of claims consolidated 30 and the total consolidated claim amount are listed in the 31 statement. However, the city shall provide at its office upon 32 request an unconsolidated list of all claims allowed. Matters 33 discussed in closed session pursuant to section 21.3 shall not 34 be published until entered on the public minutes. For cities 35 -2- LSB 6179YH (3) 91 ms/js 2/ 4

H.F. 2524 with a population of less than two thousand, the requirement to 1 provide a list of all claims allowed includes the full detailed 2 statement of expenditures from any city-owned credit and debit 3 cards. However, in cities having more than one hundred fifty 4 thousand population, the council shall each month print in 5 pamphlet form a detailed itemized statement of all receipts and 6 disbursements of the city, and a summary of its proceedings 7 during the preceding month, and furnish copies to the city 8 library, the daily newspapers of the city, and to persons who 9 apply at the office of the city clerk, and the pamphlet shall 10 constitute publication as required. Failure by the clerk to 11 make publication is a simple misdemeanor. The provisions of 12 this subsection are applicable in cities in which a newspaper 13 is published, or in cities of two hundred population or over, 14 but in all other cities, posting the statement in three public 15 places in the city which that have been permanently designated 16 by ordinance is sufficient compliance with this subsection . 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill relates to city finances. 21 Under current law, all government subdivisions are subject 22 to a fiscal year examination annually, with exceptions 23 for certain entities and cities. Such examination checks 24 the financial condition and transactions of the government 25 subdivisions. Cities with a population of less than 2,000 and 26 budgeted gross expenditures of less than $1 million in a fiscal 27 year are subject to periodic examination by the auditor. A 28 city with a population of less than 2,000 and budgeted gross 29 expenditures of $1 million or more in a fiscal year shall not 30 be subject to a required fiscal year examination until the city 31 has two consecutive years of budgeted gross expenditures of 32 $1 million or more in both fiscal years, and such examination 33 shall be conducted during the second of such fiscal years. A 34 city meeting the requirements for a periodic examination shall 35 -3- LSB 6179YH (3) 91 ms/js 3/ 4

H.F. 2524 be subject to an examination at least once during an eight-year 1 period at a time determined by the auditor of state. 2 The bill removes the fiscal year examination provisions, and 3 instead requires an audit. The bill also modifies the schedule 4 for the smaller cities. All cities with a population of less 5 than 2,000 and budgeted gross expenditures of less than $1 6 million in a fiscal year are subject to an audit at least once 7 every five years. 8 Under current law, city clerks must publish minutes from 9 city council meetings. Within 15 days of a city council 10 meeting, the clerk must publish the minutes of the proceedings, 11 including the total expenditure from each city fund, to be 12 delivered to a newspaper of general circulation in the city 13 for publication. The publication shall include a list of all 14 claims allowed and a summary of all receipts and shall show the 15 gross amount of the claims. The bill adds, that for cities 16 with a population of less than 2,000, this requirement includes 17 the full detailed statement of expenditures from any city-owned 18 credit and debit cards. 19 -4- LSB 6179YH (3) 91 ms/js 4/ 4