House Bill 643

AN ACT TO AMEND SECTION 21-35-31, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE STATE AUDITOR SHALL NOT INCLUDE ANY GRANTS RECEIVED BY A MUNICIPALITY WHEN THE AUDITOR DETERMINES THE REVENUES AND EXPENDITURES OF A MUNICIPALITY FOR ANY PURPOSE RELATED TO THE STATE AUDITOR'S AUTHORITY TO PRESCRIBE THE PROCEDURES AND REPORTING REQUIREMENTS FOR A MUNICIPALITY; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 21-35-31, Mississippi Code of 1972, is amended as follows:

21-35-31. (1) The governing authority of every municipality in the state shall have the municipal books audited annually, before the close of the next succeeding fiscal year, in accordance with procedures and reporting requirements prescribed by the State Auditor. The State Auditor shall not include any grants received by a municipality when the Auditor determines the revenues and expenditures of a municipality for any purpose related to the State Auditor's authority to prescribe the procedures and reporting requirements for a municipality. The municipality shall pay for the audit or report out of its general fund. No advertisement shall be necessary before entering into the contract, and it shall be entered into as a private contract. The audit or report shall be made upon a uniform formula set up and promulgated by the State Auditor, as the head of the State Department of Audit, or the director thereof, appointed by him, as designated and defined in Title 7, Chapter 7, Mississippi Code of 1972, or any office or officers hereafter designated to replace or perform the duties imposed by said chapter. Two (2) copies of the audit or report shall be mailed to the said State Auditor within thirty (30) days after completion. The State Auditor, at the end of each fiscal year, shall submit to the Legislature a composite report showing any information concerning municipalities in this state that the Auditor deems pertinent and necessary to the Legislature for use in its deliberations. A synopsis of the audit or report, in a format prescribed by the State Auditor, shall be published within thirty (30) days by the governing authority of each municipality in a newspaper published in the municipality or, if no newspaper is published in a municipality, in any newspaper having a general circulation published in the county wherein the municipality is located. The publication of the audit or report may be made as provided in Section 21-17-19. Publication shall be made one (1) time, and the governing authority of each municipality shall be authorized to pay only one-half (1/2) of the legal rate prescribed by law for such legal publication.

(2) It shall be the duty of the State Auditor to determine whether each municipality has complied with the requirements of subsection (1) of this section. If upon examination the State Auditor determines that a municipality has not initiated efforts to comply with the requirements of subsection (1), the State Auditor shall file a certified written notice with the clerk of the municipality notifying the governing authority of the municipality that a certificate of noncompliance will be issued to the State Tax Commission and to the Attorney General thirty (30) days immediately following the date of the filing of the notice unless within that period the municipality substantially complies with the requirements of subsection (1). If, after thirty (30) days from the giving of the notice, the municipality, in the opinion of the State Auditor, has not substantially initiated efforts to comply with the requirements of subsection (1), the State Auditor shall issue a certificate of noncompliance to the clerk of the municipality, State Tax Commission and the Attorney General. Thereafter, the State Tax Commission shall withhold from all allocations and payments to the municipality that would otherwise be payable the amount necessary to pay one hundred fifty percent (150%) of the cost of preparing the required audit or report as contracted for by the State Auditor. The cost shall be determined by the State Auditor after receiving proposals for the audit or report required in subsection (1) of this section. The State Auditor shall notify the State Tax Commission of the amount in writing, and the State Tax Commission shall transfer that amount to the State Auditor. The State Auditor is authorized to escalate, budget and expend these funds in accordance with rules and regulations of the Department of Finance and Administration consistent with the escalation of federal funds. All remaining funds shall be retained by the State Auditor to offset the costs of administering these contracts. The State Auditor shall not unreasonably delay the issuance of a written notice of cancellation of a certificate of noncompliance but shall promptly issue a written notice of cancellation of certificate of noncompliance upon an affirmative showing by the municipality that it has come into substantial compliance.

SECTION 2. This act shall take effect and be in force from and after July 1, 2012.