Division 8. Audit Of Accounts  

    (65 ILCS 5/8-8-1) (from Ch. 24, par. 8-8-1)
    Sec. 8-8-1. This Division 8 may be cited as The Illinois Municipal Auditing Law.
(Source: Laws 1961, p. 576.)

    (65 ILCS 5/8-8-2) (from Ch. 24, par. 8-8-2)
    Sec. 8-8-2. The following terms shall, unless the context otherwise indicates, have the following meanings:
    (1) "Municipality" or "municipalities" means all cities, villages and incorporated towns having a population of less than 500,000 as determined by the last preceding Federal census.
    (2) "Corporate authorities" means a city council, village board of trustees, library board, police and firemen's pension board, or any other body or officers having authority to levy taxes, make appropriations, or approve claims for any municipality.
    (3) "Comptroller" means the Comptroller of the State of Illinois.
    (4) "Accountant" or "accountants" means all persons licensed to practice public accounting under the laws of this State.
    (5) "Audit report" means the written report of the accountant or accountants and all appended statements and schedules relating thereto, presenting or recording the findings of an examination or audit of the financial transactions, affairs, or condition of a municipality.
    (6) "Annual report" means the statement filed, in lieu of an audit report, by the municipalities of less than 800 population, which do not own or operate public utilities and do not have bonded debt.
    (7) "Supplemental report" means the annual statement filed, in addition to any audit report provided for herein, by all municipalities, except municipalities of less than 800 population which do not own or operate public utilities and do not have bonded debt.
(Source: P.A. 81-1050.)

    (65 ILCS 5/8-8-3) (from Ch. 24, par. 8-8-3)
    Sec. 8-8-3. Audit requirements.
    (a) The corporate authorities of each municipality coming under the provisions of this Division 8 shall cause an audit of the funds and accounts of the municipality to be made by an accountant or accountants employed by such municipality or by an accountant or accountants retained by the Comptroller, as hereinafter provided.
    (b) The accounts and funds of each municipality having a population of 800 or more or having a bonded debt or owning or operating any type of public utility shall be audited annually. The audit herein required shall include all of the accounts and funds of the municipality. Such audit shall be begun as soon as possible after the close of the fiscal year, and shall be completed and the report submitted within 6 months after the close of such fiscal year, unless an extension of time shall be granted by the Comptroller in writing. The accountant or accountants making the audit shall submit not less than 2 copies of the audit report to the corporate authorities of the municipality being audited. Municipalities not operating utilities may cause audits of the accounts of municipalities to be made more often than herein provided, by an accountant or accountants. The audit report of such audit when filed with the Comptroller together with an audit report covering the remainder of the period for which an audit is required to be filed hereunder shall satisfy the requirements of this section.
    (c) Municipalities of less than 800 population which do not own or operate public utilities and do not have bonded debt, shall file annually with the Comptroller a financial report containing information required by the Comptroller. Such annual financial report shall be on forms devised by the Comptroller in such manner as to not require professional accounting services for its preparation.
    (d) In addition to any audit report required, all municipalities, except municipalities of less than 800 population which do not own or operate public utilities and do not have bonded debt, shall file annually with the Comptroller a supplemental report on forms devised and approved by the Comptroller.
    (e) Notwithstanding any provision of law to the contrary, if a municipality (i) has a population of less than 200, (ii) has bonded debt in the amount of $50,000 or less, and (iii) owns or operates a public utility, then the municipality shall cause an audit of the funds and accounts of the municipality to be made by an accountant employed by the municipality or retained by the Comptroller for fiscal year 2011 and every fourth fiscal year thereafter or until the municipality has a population of 200 or more, has bonded debt in excess of $50,000, or no longer owns or operates a public utility. Nothing in this subsection shall be construed as limiting the municipality's duty to file an annual financial report with the Comptroller or to comply with the filing requirements concerning the county clerk.
    (f) All audits and reports to be filed with the Comptroller under this Section must be submitted electronically and the Comptroller must post the audits and reports on the Internet no later than 45 days after they are received. If the municipality provides the Comptroller's Office with sufficient evidence that the audit or report cannot be filed electronically, the Comptroller may waive this requirement. The Comptroller must also post a list of municipalities that are not in compliance with the reporting requirements set forth in this Section.
    (g) Subsection (f) of this Section is a limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by home rule municipalities of powers and functions exercised by the State.
    (h) Any financial report under this Section shall include the name of the purchasing agent who oversees all competitively bid contracts. If there is no purchasing agent, the name of the person responsible for oversight of all competitively bid contracts shall be listed.
(Source: P.A. 96-1309, eff. 7-27-10; 97-890, eff. 8-2-12; 97-932, eff. 8-10-12; 97-1142, eff. 12-28-12.)

    (65 ILCS 5/8-8-3.5)
    Sec. 8-8-3.5. Tax Increment Financing Report. The reports filed under subsection (d) of Section 11-74.4-5 of the Tax Increment Allocation Redevelopment Act and the reports filed under subsection (d) of Section 11-74.6-22 of the Industrial Jobs Recovery Law in the Illinois Municipal Code must be separate from any other annual report filed with the Comptroller. The Comptroller must, in cooperation with reporting municipalities, create a format for the reporting of information described in paragraphs (1.5) and (5) and in subparagraph (G) of paragraph (7) of subsection (d) of Section 11-74.4-5 of the Tax Increment Allocation Redevelopment Act and the information described in paragraphs (1.5) and (5) and in subparagraph (G) of paragraph (7) of subsection (d) of Section 11-74.6-22 of the Industrial Jobs Recovery Law that facilitates consistent reporting among the reporting municipalities. The Comptroller may allow these reports to be filed electronically and may display the report, or portions of the report, electronically via the Internet. All reports filed under this Section must be made available for examination and copying by the public at all reasonable times. A Tax Increment Financing Report must be filed electronically with the Comptroller within 180 days after the close of the municipal fiscal year or as soon thereafter as the audit for the redevelopment project area for that fiscal year becomes available. If the Tax Increment Finance administrator provides the Comptroller's office with sufficient evidence that the report is in the process of being completed by an auditor, the Comptroller may grant an extension. If the required report is not filed within the time extended by the Comptroller, the Comptroller shall notify the corporate authorities of that municipality that the audit report is past due. The Comptroller may charge a municipality a fee of $5 per day for the first 15 days past due, $10 per day for 16 through 30 days past due, $15 per day for 31 through 45 days past due, and $20 per day for the 46th day and every day thereafter. These amounts may be reduced at the Comptroller's discretion. In the event the required audit report is not filed within 60 days of such notice, the Comptroller shall cause such audit to be made by an accountant or accountants. The Comptroller may decline to order an audit and the preparation of an audit report if an initial examination of the books and records of the municipality indicates that books and records of the municipality are inadequate or unavailable to support the preparation of the audit report or the supplemental report due to the passage of time or the occurrence of a natural disaster. All fees collected pursuant to this Section shall be deposited into the Comptroller's Administrative Fund. In the event the Comptroller causes an audit to be made in accordance with the requirements of this Section, the municipality shall pay to the Comptroller reasonable compensation and expenses to reimburse her for the cost of preparing or completing such report. Moneys paid to the Comptroller pursuant to the preceding sentence shall be deposited into the Comptroller's Audit Expense Revolving Fund.
(Source: P.A. 98-497, eff. 8-16-13; 98-922, eff. 8-15-14.)

    (65 ILCS 5/8-8-4) (from Ch. 24, par. 8-8-4)
    Sec. 8-8-4. Overdue reports.
    (a) In the event the required audit report for a municipality is not filed with the Comptroller in accordance with Section 8-8-7 within 6 months after the close of the fiscal year of the municipality, the Comptroller shall notify the corporate authorities of that municipality in writing that the audit report is due, and may also grant an extension of time of 60 days, for the filing of the audit report. In the event the required audit report is not filed within the time specified in such written notice, the Comptroller shall cause such audit to be made by an accountant or accountants. In the event the required annual or supplemental report for a municipality is not filed within 6 months after the close of the fiscal year of the municipality, the Comptroller shall notify the corporate authorities of that municipality in writing that the annual or supplemental report is due and may grant an extension in time of 60 days for the filing of such annual or supplemental report.
    (b) In the event the annual or supplemental report is not filed within the time extended by the Comptroller, the Comptroller shall cause such annual or supplemental report to be prepared or completed and the municipality shall pay to the Comptroller reasonable compensation and expenses to reimburse him for the cost of preparing or completing such annual or supplemental report. Moneys paid to the Comptroller pursuant to the preceding sentence shall be deposited into the Comptroller's Audit Expense Revolving Fund.
    (c) The Comptroller may decline to order an audit or the completion of the supplemental report if an initial examination of the books and records of the municipality indicates that books and records of the municipality are inadequate or unavailable to support the preparation of the audit report or the supplemental report due to the passage of time or the occurrence of a natural disaster.
    (d) The State Comptroller may grant extensions for delinquent audits or reports. The Comptroller may charge a municipality a fee for a delinquent audit or report of $5 per day for the first 15 days past due, $10 per day for 16 through 30 days past due, $15 per day for 31 through 45 days past due, and $20 per day for the 46th day and every day thereafter. These amounts may be reduced at the Comptroller's discretion. All fees collected under this subsection (d) shall be deposited into the Comptroller's Administrative Fund.
(Source: P.A. 97-890, eff. 8-2-12; 97-1142, eff. 12-28-12; 98-922, eff. 8-15-14.)

    (65 ILCS 5/8-8-5) (from Ch. 24, par. 8-8-5)
    Sec. 8-8-5. The audit shall be made in accordance with generally accepted auditing standards. Reporting on the financial position and results of financial operations for each fund of the municipality shall be in accordance with generally accepted accounting principles, insofar as possible. Each audit report shall include only financial information, findings and conclusions that are adequately supported by evidence in the auditor's working papers to demonstrate or prove, when called upon, the basis for the matters reported and their correctness and reasonableness. In connection with this, each municipality shall retain the right of inspection of the auditor's working papers and shall make them available to the Comptroller, or his designee, upon request. The audit report shall consist of the professional opinion of the accountant or accountants with respect to the financial statements or, if an opinion cannot be expressed, a declaration that the accountant is unable to express such opinion and an explanation of the reasons he cannot do so. Municipal authorities shall not impose limitations on the scope of the audit to the extent that the effect of such limitations will result in the qualification of the opinion of the accountant or accountants. Each audit report filed with the Comptroller shall be accompanied by a copy of each official statement or other offering of materials prepared in connection with the issuance of indebtedness of the municipality since the filing of the last audit report.
    Audits under this Division may be made upon either an accrual or cash basis of accounting depending upon the system followed by each municipality.
(Source: P.A. 87-433.)

    (65 ILCS 5/8-8-7) (from Ch. 24, par. 8-8-7)
    Sec. 8-8-7. When the accountant or accountants have completed the audit, not less than 2 copies of a report of the audit shall be made and signed by the accountant making such audit, and shall immediately be filed with the municipality audited. Each audit report shall include the certification of the accountant or accountants making the audit that the audit has been performed in compliance with generally accepted auditing standards. The municipality shall immediately make one copy of the report, or one copy of the report authorized by this Division 8 in lieu of an audit report, a part of its public records and at all times thereafter this copy shall be open to public inspection. In addition, the municipality shall file one copy of the report with the Comptroller. An audit report which fails to meet the requirements of this Act shall be rejected by the Comptroller and returned to the municipal authorities for corrective action. Nothing in this section shall be construed as preventing a municipality, in filing its audit report with the Comptroller, from transmitting with such report any comment or explanation that it may desire to make concerning that report. The audit report filed with the Comptroller, together with any accompanying comment or explanation, shall immediately become a part of his public records and shall at all times thereafter be open to public inspection. It shall be unlawful for the accountant to make any disclosure of the result of any examination of any public account excepting as he does so directly to the corporate authorities of the municipality audited.
(Source: P.A. 85-1000.)

    (65 ILCS 5/8-8-8) (from Ch. 24, par. 8-8-8)
    Sec. 8-8-8. The expenses of the audit and investigation of public accounts provided for in Division 8, whether ordered by the corporate authorities or the Comptroller, shall be paid by the municipality for which the audit is made. Payment shall be ordered by the corporate authorities out of the funds of the municipality and it shall be the duty of such authorities to make provisions for payment. Contracts for the performance of audits required by this Division 8 may be entered into without competitive bidding. If the audit is made by an accountant or accountants retained by the Comptroller, the municipality shall pay to the Comptroller reasonable compensation and expenses to reimburse him for the cost of making such audit.
    The corporate authorities of all municipalities coming under the provisions of this Division 8 shall have the power to annually levy a "Municipal Auditing Tax" upon all of the taxable property of the municipalities at the rate on the dollar which will produce an amount which will equal a sum sufficient to meet the cost of all auditing and reports thereunder. Such municipal auditing tax shall be held in a special fund and used for no other purpose than the payment of expenses occasioned by this Division 8.
    The tax authorized by this Section shall be in addition to taxes for general corporate purposes authorized under Section 8-3-1 of this Act.
(Source: P.A. 81-824.)

    (65 ILCS 5/8-8-9) (from Ch. 24, par. 8-8-9)
    Sec. 8-8-9. The provisions of the Division 8 shall not be construed to relieve any officer of any duties now required by law of him with relation to the auditing of public accounts or the disbursement of public funds. Failure of the corporate authorities of any municipality to comply with any of the provisions of this Division 8 shall not affect the legality of taxes levied for any of the funds of such municipality.
    Notwithstanding any provision to the contrary, any municipality which files audits or audit reports with the Comptroller in compliance with this Act shall not be required to file any additional audits or audit reports with any state governmental agency providing motor fuel tax funds to such municipality. Any such state governmental agency may obtain copies of all audits and audit reports from the Comptroller.
(Source: P.A. 80-423.)

    (65 ILCS 5/8-8-10) (from Ch. 24, par. 8-8-10)
    Sec. 8-8-10. The corporate authorities of a municipality may establish an audit committee, and may appoint members of the corporate authority or other appropriate officers to the committee, to review audit reports prepared under this Act and any other financial reports and documents, including management letters prepared by or on behalf of the municipality.
(Source: P.A. 82-644.)

    (65 ILCS 5/8-8-10.5)
    Sec. 8-8-10.5. Audit report disclosure. Each fiscal year, within 60 days of the close of an audit under this Act, the auditor conducting the audit of all of the funds and accounts of a municipality shall do each of the following:
        (1) Provide a copy of any management letter and a