APA Oversight of Local Governments

The Auditor of Public Accounts (APA) does not conduct annual audits of local government financial statements or of their financial processes and internal controls. The Code of Virginia requires local governments to contract with an independent public accounting firm for their annual financial audit. Our office only performs limited audit work over state funds handled by local constitutional officers at the cities and counties.

The APA’s Local Government and Judicial Systems (LGJS) team is responsible for conducting the audits of the entire Commonwealth’s Court System, including Circuit, General and Combined District, and Juvenile and Domestic Relations, Magistrates, General Receivers, and local Constitutional Officers. The results of these audits are available at the APA Reports section, Judicial Reports and Local Constitutional Officers, of the Local Government page.

In addition, the APA's LGJS team is responsible for two key projects focused on local government. Annually, we prepare the Comparative Report of Local Government Revenues and Expenditures, which is a compilation of financial data for Virginia’s 133 cities and counties, and 37 towns statutorily required to have an annual audit. The Comparative Report is the only comprehensive published source of local financial data and provides essential information to assist with budgetary and funding decisions in the Commonwealth.

The APA is also responsible for monitoring financial data and information as part of Virginia’s early warning system to identify at-risk localities that may meet the defined criteria for fiscal distress under the provisions of the Code of Virginia § 15.2-2512.1. As part of this annual monitoring process, our Office analyzes leading financial indicators through ratio analysis using data from locality audited financial reports. Our monitoring process also includes qualitative analysis to evaluate demographic and non-financial factors as well as other indicators and external information for applicable localities whose financial ratio results indicate a need for further review. More information about this process and the results of our Office's annual monitoring is available at the Fiscal Distress Monitoring section of the Local Government page.

While our Office does not conduct the local government audits, we do perform other oversight functions related to the annual audits and financial reporting for Virginia local governments. This oversight includes issuance of our annual audit specifications that set additional requirements unique to local government audits and various guidelines to support local compliance with accounting and reporting requirements. We also perform Quality Control Reviews of the local government audits conducted by public accounting firms to ensure the firm's audit work complies with relevant auditing standards. Further, we support local governments by offering technical assistance and knowledge sharing opportunities, and we provide various information and resources to assist with accounting and auditing guidelines and other relevant topics.

To contact our local government team (Laurie Hicks, Director or Rachel Reamy, Manager) please email localgovernment@apa.virginia.gov or contact us by phone at (804) 225-3350.

APA Authority and Local Government Concerns

In general, the APA does not have authority to conduct audits or investigations at local governments related to concerns or issues involving local funds or areas of local operations, budget, financial management, policies, and administrative matters. Additionally, the APA does not have statutory authority or oversight to investigate local elected council or board officials and concerns related to governance decisions and the general administration of the local government. State law would only permit the APA to perform a special audit or investigation at the local level in limited circumstances when approved by the Joint Legislative Audit and Review Commission (JLARC) under the current provisions of the Code of Virginia § 15.2‑2511. Since the APA conducts our work according to an annual workplan approved by JLARC, specific legislative action by the General Assembly would be needed to authorize our office to perform any type of special audit, review, or investigation at the local government level.