Fiscal Reporting Thresholds Increase for Local Government Entities

State Bills: Kentucky

Published March 11th, 2026

Detected April 2nd, 2026

Summary

Kentucky SB133 increases fiscal reporting thresholds for special purpose governmental entities under KRS 65A.030 and related statutes. The bill allows qualifying entities to move from annual audits to audits every four years if they receive two consecutive unqualified opinions. County clerk audits of motor vehicle and boat taxes are consolidated, with the Kentucky Transportation Cabinet now bearing the audit costs for vehicle-related receipts.

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What changed

Kentucky Senate Bill 133 amends multiple Kentucky Revised Statutes to increase fiscal reporting thresholds and modernize audit requirements for local governmental entities. The bill modifies KRS 65A.030 to allow special purpose governmental entities that receive unqualified audit opinions to move from annual audits to an every-four-years schedule, while requiring return to yearly audits if subsequent opinions are not unqualified. Similar audit alignment is made for area planning commissions (KRS 147.635) and sanitation districts (KRS 220.280). County clerk audits are consolidated under KRS 43.070 and 186.240, removing the separate annual audit requirement under repealed KRS 43.071, with transportation cabinet cost-sharing for vehicle-related audit portions.

Local government entities and county clerks should review their current audit schedules and prepare for the new consolidated reporting structure effective July 1, 2027. Entities currently undergoing yearly audits should track their audit opinions to determine eligibility for the extended four-year audit cycle. County clerks should coordinate with the Kentucky Transportation Cabinet regarding cost allocation for motor vehicle and motorboat receipt audits. The 60-day settlement requirement for outgoing county officials applies upon the bill's effective date.

What to do next

Review current audit schedules and opinions to determine eligibility for the extended four-year audit cycle
Coordinate with Kentucky Transportation Cabinet on audit cost allocation for motor vehicle and motorboat receipts
Update internal procedures for outgoing county official settlements to comply with 60-day requirement

Source document (simplified)

ChangeBridge / Kentucky / SB133 Passed SB133 Senate Bill Passed 2026-03-11

AN ACT relating to the fiscal reporting of local entities.

Amend KRS 65A.030 to increase the fiscal reporting levels of special purpose governmental entities; allow entities conducting yearly audits to move to an audit every 4 years if the entity receives 2 sequential audit reports with unqualified opinions and report the fact that the entity is operating under the alternative audit schedule to the Department for Local Government; require an entity to have yearly audits if the entity receives anything but an unqualified audit opinion at a subsequent audit; amend KRS 147.635, relating to area planning commissions, to align their audit requirements to those in KRS 65A.030; amend KRS 220.280, relating to sanitation districts, to align their audit requirements to those in KRS 65A.030; amend KRS 43.070 and 186.240 to combine the county clerks' independent audits of motor vehicle and motorboat registration fees and licenses, motor vehicle usage taxes, and ad valorem taxes on motor vehicles and motorboats into the county clerks' regular periodic audit; require the Kentucky Transportation Cabinet to bear the cost of the portion of the audit attributed to receipts from motor vehicles and motorboats; amend KRS 64.830, relating to final settlements of outgoing county officials, to make the settlement to be complete within 60 days of the expiration of the term of office or the date a vacancy is otherwise created to account for unexpected vacancies in office; require that if an official's vacancy does not coincide with the end of the calendar year or end of the official's term, the outgoing county official is to remit any remaining funds to the fiscal court as excess fees and require the fiscal court to provide an amount equal to the excess fees remitted by the outgoing official to the outgoing county official's successor for official use; repeal KRS 43.071, relating to the annual audit of county clerk's motor vehicle and motorboat tax receipts; EFFECTIVE, in part, July 1, 2027.

Bill Details

State Kentucky

Session 2026 Regular Session

Chamber Senate

Official Source apps.legislature.ky.gov/record/26RS/sb133....

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Action History

2026-03-31 H posted for passage in the Regular Orders of the Day for Wednesday, April 01 2026 2026-03-26 H floor amendments (1) and (2-title) filed 2026-03-25 H 2nd reading, to Rules 2026-03-24 H reported favorably, 1st reading, to Calendar 2026-03-13 H to Local Government (H) 2026-03-11 H to Committee on Committees (H) 2026-03-11 H received in House 2026-03-10 S 3rd reading, passed 38-0 with Committee Substitute (1) 2026-03-06 S posted for passage in the Regular Orders of the Day for Tuesday, March 10 2026 2026-03-05 S 2nd reading, to Rules 2026-03-04 S reported favorably, 1st reading, to Calendar with Committee Substitute (1) 2026-03-02 S to State & Local Government (S) 2026-01-28 S to Committee on Committees (S) 2026-01-28 S introduced in Senate

Votes

2026-03-10 Senate: Third Reading RSN# 3901 Yea: 38 Nay: 0

Committee Referrals

2026-01-28 S Committee on Committees 2026-03-02 S State & Local Government 2026-03-05 S Rules 2026-03-11 H Committee On Committees 2026-03-13 H Local Government 2026-03-25 H Rules

Amendments

0000-00-00 Senate Committee Substitute 0000-00-00 Senate Committee Substitute 0000-00-00 House Floor Amendment 0000-00-00 House Floor Amendment

Bill Text Versions

0000-00-00 Introduced 0000-00-00 Engrossed

Subjects

Auditor of Public Accounts Audits and Auditors Bonds of Surety Cities Counties County Clerks Courts, Fiscal Effective Dates, Delayed Financial Responsibility Local Government Motor Vehicles Planning and Zoning Public Officers and Employees Sewer Systems Sheriffs Special Districts Special Purpose Governmental Entities State Agencies Taxation Taxation, Property Taxation, Sales and Use Local Mandate Legislative data powered by LegiScan (CC BY 4.0)

Named provisions

KRS 65A.030 - Special Purpose Governmental Entities KRS 147.635 - Area Planning Commissions KRS 220.280 - Sanitation Districts KRS 43.070 and 186.240 - County Clerk Audits KRS 64.830 - Final Settlements of Outgoing County Officials