11 O.S. §17-105 addresses the requirements for an annual audit. For municipalities with an income of $25,000.00, subsection A of the statute provides as follows:
The governing body of each municipality with an income of Twenty-five Thousand Dollars ($25,000.00) or more to its general fund during a fiscal year shall cause to be prepared, by an independent licensed public accountant or a certified public accountant, an annual financial statement audit to be conducted in accordance with auditing standards generally accepted in the United States of America and "Government Auditing Standards" as issued by the Comptroller General of the United States. Such audit shall be ordered within thirty (30) days of the close of each fiscal year. Copies shall be filed with the State Auditor and Inspector within six (6) months after the close of the fiscal year in accordance with the provisions of Sections 3022 and 3023 of Title 68 of the Oklahoma Statutes and with the governing body of the municipality.
Subsection B of this statute addresses municipalities with a population of less than 2,500. It provides in part:
The governing body of each municipality with an income of Twenty-five Thousand Dollars ($25,000.00) or more to its general fund during a fiscal year and with a population of less than two thousand five hundred (2,500) as of the most recent Federal Decennial Census, and for whom an annual financial statement audit is not required by another law, regulation or contract, shall cause to be prepared, by an independent licensed public accountant or a certified public accountant, an annual financial statement audit in accordance with auditing standards generally accepted in the United States and Government Auditing Standards as issued by the Comptroller General of the United States, or an agreed-upon-procedures engagement over certain financial information and compliance requirements to be performed in accordance with the applicable attestation standards of The American Institute of Certified Public Accountants.
The penalty for failing to file the annual audit is set out in 11 O.S. §17-107 and provides that if the audit is not filed, the State Auditor is required to notify the Oklahoma Tax Commission which is then required to withhold its monthly allocation of gasoline taxes until the audit is filed. If it is not filed within two (2) years after the close of the fiscal year, then the funds withheld are required to be submitted to the County for use in the county highway fund.
One issue occasionally overlooked by municipalities is the statutory requirement to publish a notice of availability of the annual audited financial statements for public inspection (“Notice of Availability”).These provisions are addressed in 11 O.S. §17-113.The Notice of Availability is required for all municipalities subject to the audit requirements set forth in 11 O.S. §17-105, unless they have a charter provision that sets forth the manner and procedure for publication.The Notice is also required to be published in a newspaper of general circulation.