The Florida Auditor General has released a draft of their proposed 2014 rules (Chapter 10.550 – Local Governmental Entity Audits) which will be effective for the 9-30-2014 fiscal year audits.
While there are many changes, the one proposed change that will significantly effect the annual financial statement audits of local governments removes the requirement of the auditor to simply issue a statement regarding the local government’s compliance with Section 218.415, Florida Statutes regarding the investment of public funds as part of the management letter. The proposed rule replaces this requirement with a separate examination report performed pursuant to AICPA Professional Standards, AT Section 601. This separate report will require we perform an examination in accordance with AT Section 601 whose objective is to express an opinion on the local government’s compliance with Section 218.415, Florida Statutes.
This is a significant step-up in assurance as to compliance with the applicable provision of Section 218.415 and will require additional provision within the audit engagement letter and the issuance of an examination report to be included with the annual audited financial statements.
In summary, the proposed rules will require an entirely separate examination report that will include the issuance of an opinion as to the local government’s compliance.
The rules are open for comment until June 16, 2014. The draft rules can be found here: http://www.myflorida.com/audgen/pages/whatsnew.html