Request By:
Mr. J. Mark Adams
Certified Public Accountant
Second National Arcade Building
P.O. Box 951
Ashland, Kentucky 41101
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Thomas R. Emerson, Assistant Attorney General
This is in reply to your letter raising the following two questions:
'(1) Is a second class Kentucky city required to publish the annual audit report of its financial condition and operations including any noted deficiencies?
(2) In the event that the authorities of the second class city refuse to publish the annual audit what steps must be taken to require such authorities to publish said annual audit? Also, should the independent accountants initiate any move to have the annual audit published?"
We direct your attention to KRS 92.403, which provides as follows:
"(1) In all cities of the second class, whether operating under the councilmanic form of government, or under the commission or city manager form of government, an annual audit of all the accounts of all city officers and of officers of municipally owned utilities, shall be made at the termination of each fiscal year. The legislative body of the city and the officers of the municipally owned utilities shall select, to make the audits, qualified public accountants who have no personal interest in the financial affairs of the city or of any of its officers or employes, and shall cause a summary of each audit to be published pursuant to KRS Chapter 424. The summary of each audit shall contain a balance sheet, profit and loss statement, and shall show the bonded indebtedness and any discrepancy disclosed by the audit. A copy of the audit of each officer or agency shall be kept on file in the respective offices. Within one week after publication of the audit, a complete copy of each audit shall be filed in the office of the county court clerk. The legislative body may at any time provide for an examination or audit of the accounts of any officer or department of the city.
(2) Compliance with the provisions of this section and KRS 92.405 shall be in lieu of the requirements of KRS 424.220."
Thus, as you can see, the statute clearly requires all cities of the second class to make an annual audit of all accounts of all city officers and officers of city-owned utilities at the end of the fiscal year. Qualified public accountants shall be selected to make the audits and a summary of each audit must be published in a newspaper. The summary of each audit must contain a balance sheet, profit and loss statement, and shall show the bonded indebtedness and any discrepancy disclosed by the audit.
In view of the mandatory requirements pertaining to the making of annual audits by cities of the second class and the publication of the summary of each audit, we can only suggest that you first discuss the matter with the city legislative body and the city attorney. If such discussions fail to produce satisfactory results you may then wish to contact a private attorney to consider other available courses of action.