Passed in 2023, Act 71 allows cities and towns with total recurring revenues below a set threshold — adjusted annually based on inflation — the option of providing a compilation of financial statements instead of a full audit.
Effective for the municipal fiscal year beginning after January 1, 2024, this threshold was set at $500,000 and is adjusted annually by the SC Revenue and Fiscal Affairs Office based on changes in the Consumer Price Index. Eligible cities may provide either an audit of financial statements or a compilation of financial statements in lieu of an audit as follows:
- Annually for municipalities that have a court system*; or
- At least once every three years for municipalities that do not have a court system.
*Cities and towns with court systems must include a Uniform Supplemental Schedule Form detailing fines and assessments collected at the court level, the amount remitted to the municipal treasurer, and the amount remitted to the State Treasurer. Additionally, these cities and towns are required to engage an external accountant to perform agreed upon procedures related to the supplemental schedule.
Audits and compilations must be performed by an independent certified public accountant or a firm of certified public accountants and made available for public inspection. Municipalities with a court must submit to the State Treasurer within thirty days of issuance. Municipalities without a court must submit within thirteen months of the end of their fiscal year.