GOV REPORT ENHANCEMENT ACT
HB5391 creates the Government Reporting Enhancement and Transparency Act, a comprehensive overhaul of how Illinois local governments and certain related public entities are audited, reviewed, and reported to the State Comptroller. The bill replaces many existing audit/reporting provisions that apply to fiscal years ending before January 1, 2028, and establishes a new framework for fiscal years beginning after December 31, 2027. Under that framework, local governments are grouped into four categories based on annual cash receipts from external sources, with different reporting and assurance requirements depending on size.
The bill requires the Comptroller to create and maintain a public local government registry, publish templates and guidance, set category thresholds, and provide listings and technical assistance for local governments seeking independent CPA firms. It also standardizes the selection and retention of CPA firms through public requests for qualifications, fixed-fee negotiation, conflict-of-interest restrictions, and periodic re-selection. Category 1 governments use an auditing committee and a template-based inspection process; Categories 2 through 4 must use agreed-upon procedures, with larger governments also preparing and auditing financial statements under cash basis or GAAP, depending on category. The bill also adds reporting on W-2 and 1099 recipients, fraud and internal control communications, redevelopment project areas, and other financial information, while authorizing late fees, waivers for exigent circumstances, and enforcement through Comptroller review and possible Attorney General action.
HB5391 would substantially revise Illinois statutes governing audits and financial reporting for counties, municipalities, townships, special districts, redevelopment authorities, airport authorities, civic centers, home equity programs, and other local or quasi-local entities. It repeals or sunsets many existing pre-2028 audit/reporting provisions and replaces them with the new Government Reporting Enhancement and Transparency Act, while also amending multiple code sections to cross-reference the new framework. The bill expands the Comptroller’s administrative role, creates a statewide registry and reporting database, and imposes new standardized procedures, deadlines, and public disclosure requirements on affected local governments and their officials, auditors, and county clerks.
The bill’s structure suggests a strong policy emphasis on transparency, uniformity, and accountability in local government finance. Even without committee testimony or recorded votes, the text itself reflects a pro-disclosure and pro-standardization approach, with extensive public posting requirements, plain-language templates, and centralized Comptroller oversight. The inclusion of transition years through 2033 and waiver authority for exigent circumstances indicates an effort to phase in the new system and accommodate implementation challenges.
The main points of potential contention are likely to be the bill’s increased state oversight of local governments, the added compliance burden on smaller units, and the shift in audit-selection authority toward a Comptroller-managed process. Local governments may object to mandatory reporting, public posting of payroll and audit materials, late fees, and limits on home rule regulation. CPA firms and local officials may also scrutinize the fixed-fee negotiation process, conflict-of-interest rules, and the prohibition on auditors preparing certain financial statements. Another likely issue is the bill’s broad preemption of inconsistent local rules and its application to many specialized entities that previously operated under separate audit statutes.