HTB Governmental Newsletter | December 2025

Legislative Auditor Update:

 Statewide Agreed-Upon Procedures (SAUPs) – Periods beginning on or after January 1, 2024, will now be in year 2 of a two-year cycle.  Fiscal Years beginning between January 1 and December 31, 2023, were year 1.

  • All SAUPs will be tested every other year of the two-year cycle, specifically, in year 1.
  • If local auditee submitted the previous year’s audit report by the statutory deadline (not extended) due date, then those SAUP’s in the base year (year 1) with no exceptions do not need to be tested in year 2.
  • Fiscal Years beginning between January 1 and December 31, 2025, are considered as testing year 1 and are subject to all Statewide Agreed-Upon Procedures.

Legislative Updates

2024 Act 764:  RE: Escrow Accounts for Long-Term Maintenance of Projects Funded Through Capital Outlay – mandates that non-state entities that receive funding for the acquisition or construction of buildings through the Capital Outlay Act establish an escrow account to maintain the funds required to be provided by a non-state entity exclusively for costs associated with the long-term maintenance of capital outlay projects, if all of the following conditions are met:

  1. The project is included in the Capital Outlay Act
  2. The non-state entity is required to provide a local match for the project
  3. The cooperative endeavor agreement between the non-state entity and the State for the capital outlay project is fully executed on or after July 1, 2024.
  • The escrow account must be established before the project can be advertised for bids.
  • The escrow account must be maintained until the project is unoccupied or disposed of, or 25 years, whichever is later.
  • Funds required are to be no less than 3% of total project cost.
  • 3% is baseline – at least ½% must be added every year until the balance totals the lesser of 10% of the total project cost or $1 million.
  • Construction of buildings as noted above includes major repairs and renovations, fixed equipment connected to buildings, and equipment and furnishings of new buildings
  • Consequences of noncompliance include but are not limited to projects and future projects not included in Capital Outlay Act and an audit finding of noncompliance.

2024 Act 539: RE:  Broadcast of Public Meetings – Requires certain public bodies to broadcast meetings live via television or the internet and that sufficient information is included in the written public notice for the public to locate the broadcast.

  • Entities required:
    • Parish Governing Authorities in parishes of 25,000 or more
    • School Boards in parishes of 25,000 or more
    • Municipal Governing Authorities in municipalities of 10,000 or more.
  • Includes the entities above and their committee meetings.

2024 Act 707 – RE: Garbage Collection Contracts – If exclusive, must be bid.

  • Exclusive contracts are defined under the law to mean, “a written agreement for the collection and disposal of residential garbage and trash throughout the entirety of the territorial jurisdiction of the respective parish or municipality.

2025 Act 434:  RE: Public Contracts Required Training –Beginning July 1, 2026, all elected officials of municipalities and certain municipal employees must complete a minimum of one hour of annual training on procurement and the letting of public contracts, provided by the legislative auditor.

  • Applies to all municipal employees whose job duties involve procurement activities, including but not limited to the purchase of materials and supplies or public works, or drafting, managing, or supervision of contracts, including but not limited to procurement contracts, cooperative endeavor agreements, contracts for professional services, and the letting of public contracts pursuant to R.S. 38:2211 et seq.

2025 Act 180:  RE: Selection of architects – Prohibits the state and any of its political subdivisions or agencies from using price or price-related information as a factor in the selection of architectural and engineering professional services for certain projects.

Type of Municipality – Reminder to ensure that your governing board has changed the type of municipality with population changes.  Population limits are as follows:

  • Villages: 1,000 or less; Towns: between 1,001 and 4,999; Cities: 5,000 or more

Accounting Standards Board Updates

GASB Statement No. 101: Compensated Absences – A liability should be recognized for leave that meets all three of the following criteria:

  1. Is attributable to services already rendered
  2. Accumulated (it carries forward into future periods during which it can be used, paid, or settled)
  3. Is more likely than not to be used, paid or settled.
  • Effective for fiscal years beginning after December 15, 2023.
  • The new standard, in particular the wording of “more likely than not” to be used, paid, or settled could result in larger liabilities for compensated absences than the previous standard.
  • Salary related payments that are directly and incrementally associated with the leave (such as employer paid payroll taxes) should be included with the liability. Salary-related payments related to defined benefit pensions or defined benefit OPEB should not be included in the measurement of liabilities for compensated absences, even if they meet this criterion.
  • Note that this this recognition of the liability for compensated absences if for proprietary funds and government- wide financial statements. Governmental funds liability for compensated absences continues to be limited to the liability amount that normally would be liquidated with expendable available financial resources (compensated absences are normally expected to be liquidated with expendable available financial resources and should be recognized as governmental fund liabilities, to the extent that they mature each period.)

GASB Statement No. 103: Financial Reporting Model Improvements – Introduces targeted improvements to the financial reporting model, including changes to MD&A, presentation of unusual or infrequent items, proprietary fund statement formats, major component unit information, and budgetary comparison information.

The information contained here is for informational purposes only and is not legal advice or a substitute for legal counsel. Hannis T. Bourgeois assumes no responsibility for the completeness, accuracy, or timeliness of any information provided herein.

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