Bills › 90th General Assembly
Relating to audits of state entities by certified public accountants
Topics:State government
Where it is now
- Done: IntroducedFebruary 13, 2024
- Done: SubcommitteeFebruary 13, 2024
- Done: Senate committeeFebruary 15, 2024
- Done: Passes the SenateFebruary 19, 202431–16
- Stopped: House committeeDied when the General Assembly ended
- Next: Passes the House
- Next: To the Governor
- Next: Signed into law
Died when the session ended The 2024 session adjourned on April 19, 2024, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?
What’s in it
AI summary State departments that currently get audited by the auditor of state could hire their own certified public accountants to do the work instead. These outside accountants would still have to send their results to the auditor. The money used to pay these accountants would come from the same funds the state would have used to pay the auditor.1
Read the official explanation
Under current law, the auditor of state (auditor) is required to annually, and more often if deemed necessary, audit the state and all state officers and departments receiving or expending state funds. This bill authorizes a department subject to such an audit to instead employ a certified public accountant (CPA) to perform the audit and submit the results of the audit to the auditor. The bill requires the CPAs to be paid for by moneys which the auditor would have been paid had the auditor performed the assignment or appropriations to the executive council.
House subcommittee
Named March 5, 2024. Meeting: Tuesday, March 12 · 8:00 AM · House Lounge.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
2 written public comments to its subcommittee: March 12, 2024 (1), February 14, 2024 (1) · on the Legislature’s site
Fiscal note
Can’t be estimated Compare with other bills
AI summary Senate File 2311 allows certain state departments to hire a Certified Public Accountant to perform audits instead of using the Auditor of State. This bill may increase audit expenses for state agencies and decrease revenue to the Auditor of State, but the exact fiscal impact cannot be estimated.3
Read the fiscal note
Description
Senate File 2311 allows a department currently subject to audit by the Auditor of State (AOS) to fulfill the requirements of Iowa Code section 11.2 by employing a Certified Public Accountant (CPA), subject to the approval of the Executive Council, and submitting the audit to the AOS. Payment for the services of the CPA is required to be approved by the Executive Council pursuant to Iowa Code section 11.32 and paid from the funds from which the AOS would have been paid had the AOS performed the audit. If such funds are not available, the Executive Council may authorize that the expense be paid as described in Iowa Code section 7D.29.
Background
Iowa Code section 11.2 requires the AOS to annually, or more often if deemed necessary, audit the State and all State officers and departments receiving or expending State funds. Currently, the AOS may, with prior written permission from the Executive Council, employ CPAs to perform the required audits. The AOS receives a General Fund appropriation to complete the audits of certain State agencies and receives payment from the agencies listed in Iowa Code section 11.5B for the reimbursement for the costs of the audit.
Over the last three years, the AOS has averaged approximately 65,000 hours of auditing the State and State departments at a rate of $85 per hour, for an average cost of $5.3 million per year.
Based on data obtained from audit reports filed with the AOS by private firms, CPA firm billing rates for the periodic examination of small cities range from $95 per hour to $183 per hour. Other audits of State entities performed by outside CPA firms have cost as much as $260 per hour.
Assumptions
- CPA firms may charge hourly rates that differ from the rate currently charged by the AOS. However, the average hourly rate that may be charged to a State agency that hires an outside CPA and audit firm cannot be determined.
- State agencies may hire outside CPA and audit firms, but the number of State agencies that will pursue these audits and whether the Executive Council will approve the requests cannot be determined.
Fiscal Impact
The fiscal impact of SF 2311 may increase audit expenses for State agencies and decrease revenue to the AOS, but the extent of the impact cannot be calculated since it is unknown how many State agencies may choose to hire CPA firms rather than using the AOS’s services.
Source
- Auditor of State
- Audits of State Entities, Alternative Auditors · February 19, 2024
Iowa Code it changes
Lobbying
1 for · 5 against · 3 undecided · Who →