HF 2524 (LSB 6179YH (3) 91)

HOUSE FILE 2524

BY  WULF

A BILL FOR

An Act relating to city finances.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 11.6, subsection 1, paragraph a, subparagraph (1), Code 2026, is amended to read as follows:
   (1)  Except for entities organized under chapter 28E having gross receipts of one hundred thousand dollars or less in a fiscal year, the financial condition and transactions of all government subdivisions shall be audited annually, except that cities having a population of less than two thousand and budgeted gross expenditures of one million dollars or more in a fiscal year shall be subject to a required fiscal year examination an audit for that fiscal year according to procedures established by the office of auditor of state, and cities having a population of less than two thousand and budgeted gross expenditures of less than one million dollars in a fiscal year shall be subject to periodic examination by the auditor of state according to procedures established by the auditor of state, and may be examined as otherwise provided in this section. However, a city having a population of less than two thousand and budgeted gross expenditures of one million dollars or more in a fiscal year shall not be subject to a required fiscal year examination until the city has two consecutive years of budgeted gross expenditures of one million dollars or more in both fiscal years, and such examination shall be conducted during the second of such fiscal years. A city meeting the requirements for a periodic examination shall be subject to an examination under this section at least once during an eight-year period at a time determined by the auditor of state an audit at least once every five years. The audit of school districts shall include an audit of all school funds including categorical funding provided by the state, the certified annual financial report, the certified enrollment as provided in section 257.6, supplementary weighting as provided in section 257.11, the revenues and expenditures of any nonprofit school organization established pursuant to section 279.62, and entrepreneurial education funds established pursuant to section 298A.15. Differences in certified enrollment shall be reported to the department of management. The audit of school districts shall include at a minimum a determination that the laws of the state are being followed, that categorical funding is not used to supplant other funding except as otherwise provided, that supplementary weighting is pursuant to an eligible sharing condition, and that postsecondary courses provided in accordance with section 257.11 and chapter 261E supplement, rather than supplant, school district courses. The audit of a city that owns or operates a municipal utility providing local exchange services pursuant to chapter 476 shall include performing tests of the city’s compliance with section 388.10. The audit of a city that owns or operates a municipal utility providing telecommunications services pursuant to section 388.10 shall include performing tests of the city’s compliance with section 388.10.
    Sec. 2.  Section 372.13, subsection 6, Code 2026, is amended to read as follows:
   6.  Within fifteen days following a regular or special meeting of the council, the clerk shall cause the minutes of the proceedings of the council, including the total expenditure from each city fund, to be delivered to a newspaper of general circulation in the city for publication. The publication shall include a list of all claims allowed and a summary of all receipts and shall show the gross amount of the claims. The list of claims allowed shall show the name of the person or firm making the claim, the reason for the claim, and the amount of the claim. If the reason for the claims is the same, two or more claims made by the same vendor, supplier, or claimant may be consolidated if the number of claims consolidated and the total consolidated claim amount are listed in the statement. However, the city shall provide at its office upon request an unconsolidated list of all claims allowed. Matters discussed in closed session pursuant to section 21.3 shall not be published until entered on the public minutes.  For cities with a population of less than two thousand, the requirement to provide a list of all claims allowed includes the full detailed statement of expenditures from any city-owned credit and debit cards. However, in cities having more than one hundred fifty thousand population, the council shall each month print in pamphlet form a detailed itemized statement of all receipts and disbursements of the city, and a summary of its proceedings during the preceding month, and furnish copies to the city library, the daily newspapers of the city, and to persons who apply at the office of the city clerk, and the pamphlet shall constitute publication as required. Failure by the clerk to make publication is a simple misdemeanor. The provisions of this subsection are applicable in cities in which a newspaper is published, or in cities of two hundred population or over, but in all other cities, posting the statement in three public places in the city which that have been permanently designated by ordinance is sufficient compliance with this subsection.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to city finances.
   Under current law, all government subdivisions are subject to a fiscal year examination annually, with exceptions for certain entities and cities. Such examination checks the financial condition and transactions of the government subdivisions. Cities with a population of less than 2,000 and budgeted gross expenditures of less than $1 million in a fiscal year are subject to periodic examination by the auditor. A city with a population of less than 2,000 and budgeted gross expenditures of $1 million or more in a fiscal year shall not be subject to a required fiscal year examination until the city has two consecutive years of budgeted gross expenditures of $1 million or more in both fiscal years, and such examination shall be conducted during the second of such fiscal years. A city meeting the requirements for a periodic examination shall be subject to an examination at least once during an eight-year period at a time determined by the auditor of state.
   The bill removes the fiscal year examination provisions, and instead requires an audit. The bill also modifies the schedule for the smaller cities. All cities with a population of less than 2,000 and budgeted gross expenditures of less than $1 million in a fiscal year are subject to an audit at least once every five years.
   Under current law, city clerks must publish minutes from city council meetings. Within 15 days of a city council meeting, the clerk must publish the minutes of the proceedings, including the total expenditure from each city fund, to be delivered to a newspaper of general circulation in the city for publication. The publication shall include a list of all claims allowed and a summary of all receipts and shall show the gross amount of the claims. The bill adds, that for cities with a population of less than 2,000, this requirement includes the full detailed statement of expenditures from any city-owned credit and debit cards.