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HB 1045

LEGISLATIVE AUDITOR: Provides for the audit threshold for local auditees

2026 Regular Session Introduced by Jeremy LaCombe

HB 1045 raises local-auditee thresholds to require annual full audits at $600k+ and, from 2027, adds automatic CPI-based threshold increases for inflation.

Effective date: 08/01/2026.
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Bill Summary · HB 1045

Summary of HB 1045 (2026) — Louisiana Legislative Auditor: Local Auditee Audit Threshold

Purpose and intent

  • Establishes and updates the threshold amounts at which local auditees in Louisiana must undergo annual audits or related financial statement reviews.
  • Introduces an automatic annual adjustment to the threshold for changes in the Consumer Price Index (CPI), ensuring thresholds keep pace with inflation.

Key provisions

  • Amends and reenacts provisions in R.S. 24:513(J)(1)(c)(iii)-(iv) and enacts R.S. 24:513(J)(1)(c)(v) governing audit requirements for local auditees.

  • Local auditee thresholds for annual audits and reviews:

    • If a local auditee receives ≥ $200,000 but < $600,000 in revenues and other sources in a fiscal year:
    • Must have an annual review of its financial statements accompanied by an attestation report (per the Louisiana Governmental Audit Guide).
    • The legislative auditor may, at his discretion, require a full audit of books and accounts.
    • If a local auditee receives ≥ $600,000 in revenues and other sources in a fiscal year:
    • Must be audited annually (full audit).

  • CPI-indexed adjustment:

    • Beginning on July 1, 2027, and each July 1 thereafter, if the unadjusted CPI (January CPI from the U.S. Bureau of Labor Statistics) has increased, the annual audit threshold amount shall be increased by the same percentage, rounded to the nearest dollar.
    • The legislative auditor is required to adjust the threshold accordingly under this provision.

What is affected

  • Local auditees in Louisiana (entities that receive revenues and other sources in a fiscal year should be assessed):
    • Entities with revenues ≥ $200,000 but < $600,000 are subject to annual reviews with attestation (or possibly full audits if the auditor requires).
    • Entities with revenues ≥ $600,000 are required to be audited annually.
  • The Office of the Legislative Auditor, which will administer and adjust thresholds and determine audit requirements for local auditees.

Procedural and timing aspects

  • Thresholds currently in statute are amended from prior levels:
    • The previous threshold for moving from “annual review with attestation” to “annual full audit” was $500,000.
    • The bill raises this to $600,000.
  • CPI-based adjustments:
    • Effective mechanism begins July 1, 2027, with annual CPI-based increases thereafter.
    • Adjustments are to be rounded to the nearest dollar.
  • Implementation:
    • The legislative auditor has authority to apply audits at his discretion for local auditees near the threshold, consistent with the proposed changes.

Practical impact

  • Higher revenue thresholds before a full annual audit is mandated may reduce the number of full audits required of smaller local entities moving to the $600,000 threshold.
  • The automatic CPI-based adjustment helps prevent erosion of the threshold due to inflation, maintaining budgetary and audit standards over time.
  • Local entities may experience changes in reporting requirements (from annual compilations with attestation to full audits) once they cross the threshold, or conversely avoid such changes if CPI adjustments keep them below the higher threshold.

Summary

HB 1045 increases the local-auditee annual-audit threshold from $500,000 to $600,000 in revenues and other sources, introduces automatic CPI-based threshold adjustments starting July 1, 2027, and clarifies the audit options for entities within the intermediate range ($200,000 to $599,999). The legislative auditor retains discretion to require audits and to apply the annual audit requirement for higher-threshold entities.

Compiled from official sources — confirm details with the bill’s official record.

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