2025 Audits and Thresholds

The Minnesota Legislature recently changed the Audit and Agreed-Upon Procedures Engagement (AUP) reporting requirements for Cities, Towns, and Special Districts. These changes, enacted during the 2025 legislative session, are effective August 1, 2025, for audits performed in 2026. They raise the audit threshold to $1,000,000 in 2025, to be adjusted for inflation annually thereafter. Although the threshold increase may reduce the audit requirements for some entities, certain debt, grant, and other contractual agreements may have audit requirements under the terms of those agreements.

To receive distributions under sections 477A.011 to 477A.03, or a special district aid program, counties, cities, towns, and special districts must submit all the financial reports to the state auditor by the reporting deadline. This requirement applies to all aid distributions to be paid on or after August 1, 2025.

For details on the legislative changes, please refer to 2025 Minn. Laws, ch. 39, art. 6, §§  6, 10, 13, and 16.

Counties: All counties are still required to conduct an annual audit in accordance with Generally Accepted Accounting Principles (GAAP) regardless of their revenues. To receive aid distributions, all counties must submit the required financial reports to the Office of the State Auditor (OSA). These reports include:

• Local Government Financial Reporting Form and GAAP Audit: Both the audit and financial reporting form must be completed and submitted by November 1 through SAFES.

Cities: Please click to learn about the 2025 Audits and Thresholds for Cities

Audit Threshold for a Municipal Liquor Store: Please click to learn about the audit and threshold requirements

Townships: Please click to learn about the 2025 Audits and Thresholds for Townships

Special Districts: Please click to learn about the 2025 Audits and Thresholds for Special Districts