AGO 98025.

• Court: Nebraska

Nebraska Attorney General Opinions 1998. AGO 98025. DATE: April 30, 1998SUBJECT: Contract for Audit of Political Subdivisions; Payment of Audit FeesREQUESTED BY: John Breslow, Auditor of Public AccountsWRITTEN BY: Don Stenberg, Attorney General Fredrick F. Neid, Assistant Attorney General This is in response to your questions regarding the authority of the Auditor of Public Accounts to contract for the performance of audits of political subdivisions and related questions regarding payment for the audit services. As you have noted, it is the duty of the Auditor of Public Accounts "to examine or cause to be examined, at the expense of the political subdivision . . . " the financial records of political subdivisions when examination is determined necessary by the Auditor of Public Accounts under the provisions of Neb. Rev. Stat. § 84-304(3)(b) (Supp. 1997). In furtherance of the statutory authorization, section 008 of rules and regulations of the Auditor of Public Accounts, 42 NAC 1, states: Should any political subdivision fail or refuse to either cause a complete audit to be made and filed or obtain a waiver of the audit requirement as required by state statute or regulation, the Auditor shall have the authority, after due notice and a hearing to show cause, to appoint a certified public accountant or public accountant to conduct the audit of the subdivision. The fee for such audit shall be an obligation of the subdivision and shall become a lien against the subdivision. By way of background, certain political subdivisions of the state, three townships and two fire protection districts, have failed to submit audit reports or to obtain a waiver of audit requirements from the Auditor of Public Accounts. As a consequence, your office is proceeding to appoint a certified public accountant to perform the audit. The initial question(s) you ask is whether the contract for performance of the audit and the bill for audit services would be between the accountant and the Auditor of Public Accounts. In the absence of cooperation by the political subdivisions, the contract would be between the accountant or accounting firm and the Auditor of Public Accounts since your office is proceeding to effect the appointment. As a matter of practical necessity, the Auditor of Public Accounts would be a party to the contract and provision for payment of...