Tenn. Code Ann. § 4-3-304 (2026)

The department of audit has the power and is required to:

• (1)
  • (A) Perform currently a post audit of all accounts and other financial records of the state government, and of any department, institution, office or agency thereof in accordance with generally accepted auditing standards and in accordance with such procedures as may be established by the comptroller of the treasury;
  • (B) Make annually, and at such other times as the general assembly shall require, a complete report on the post audit, such report to be in the form provided by §§ 8-4-109 - 8-4-111 and by any subsequent legislation;

• (2) Certify to the fund balance sheets, operating and other statements, covering the condition of the state's finances, as prepared by the department of finance and administration, or by the state treasurer, before publication of such statements;

• (3) Serve as a staff agency to the general assembly, or to any of its committees, in making investigations of any phase of the state's finances;

• (4)
  • (A) Make annually an audit of all the records of the several counties of the state, including the offices of county trustees, circuit court clerks, criminal court clerks, county clerks and clerks and masters of chancery courts, and all county mayors and judges of the courts of general sessions, specifically including the accounts of all "trust funds" in the hands of clerks and masters, or county clerks, or both, and any other county official, whether elected or appointed;
  • (B) In lieu of the audit required under this subdivision (4), the department may accept an audit made by an independent certified public accountant or licensed public accountant, employed at the expense of the county, if the audit made by such independent certified public accountant or licensed public accountant meets the minimum standards for county auditing established by the comptroller of the treasury, and approved by the governor;
  • (C) The audit shall be made annually and copies of the audit furnished to the comptroller of the treasury;
  • (D) Any county having an audit made by an independent certified public accountant or licensed public accountant under the conditions prescribed in this subdivision (4) shall be relieved of paying to the state the fee required by § 9-3-210;
  • (E) Beginning July 1, 1974, the department shall prepare the audit required under this subdivision (4) in each county of this state at least once in every five-year period, and shall not accept an audit prepared by a certified public accountant or licensed public accountant in lieu of a state audit for more than four (4) years in every five-year period beginning July 1, 1974, or may, in such manner as the comptroller of the treasury may determine, participate with or monitor the audit with the independent certified public accountant or licensed public accountant;

• (5) Devise a modern, effective and uniform system of bookkeeping and accounting, subject to the approval of the governor, comprehending:
  • (A) An efficient system of checks and balances between the officers at the seat of government entrusted with the collections and receipts, custody and disbursement of the revenues of the state; and
  • (B) A system of bookkeeping and accounting, for the use of all county officials and agencies handling the revenues of the state or of any political subdivision thereof; provided, that the comptroller of the treasury and the governor may approve any existing system;

• (6) Perform economy and efficiency audits, program results audits and program evaluations. Any or all of the elements of an audit may be performed, including financial and compliance, economy and efficiency program results and program evaluation;

• (7) Require that audits to be performed by the internal audit staffs of grantees or the internal audit staffs of state departments, boards, commissions, institutions, agencies, authorities or other entities of the state shall be coordinated with the office of the comptroller of the treasury, and any such audit reports as may be issued shall be prepared in accordance with standards established by the comptroller of the treasury. No department, agency, institution, board, commission or authority shall cause internal auditing to be performed by persons who do not meet the job specifications for internal auditors established by the commissioner of human resources and approved by the commissioner of finance and administration and the comptroller. Notwithstanding any law to the contrary, working papers created, obtained or compiled by an internal audit staff are confidential and are therefore not an open record pursuant to title 10, chapter 7. "Working papers" includes, but is not limited to, auditee records, intra-agency and interagency communications, draft reports, schedules, notes, memoranda and all other records relating to an audit or investigation by internal audit staff;

• (8) Require that all persons, corporations or other entities receiving grants from or through this state shall cause a timely audit to be performed, in accordance with auditing standards prescribed by the comptroller of the treasury; and

• (9) Establish minimum standards for the performance of audits by the internal audit staffs of local governments, special taxing districts, utility districts, political subdivisions, state departments, boards, commissions, institutions, agencies, authorities or other entities of the state. These standards, which shall be established by the comptroller of the treasury, shall include "Standards for the Professional Practice of Internal Auditing" published by the Institute of Internal Auditors, Inc., or such other standards as may be approved by the comptroller of the treasury. All audit reports issued by such internal audit staffs shall include a statement that the audit was conducted pursuant to these standards. Notwithstanding any law to the contrary, working papers created, obtained or compiled by an internal audit staff are confidential and are therefore not an open record pursuant to title 10, chapter 7. "Working papers" includes, but is not limited to, auditee records, intra-agency and interagency communications, draft reports, schedules, notes, memoranda and all other records relating to an audit or investigation by internal audit staff.

Acts 1937, ch. 33, § 72; 1937, ch. 286, § 1; 1939, ch. 11, § 40; 1941, ch. 96, § 1; C. Supp. 1950, § 255.72 (Williams, § 255.77); Acts 1953, ch. 22, § 1; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1974, ch. 616, §§ 1, 2; 1977, ch. 221, §§ 1-3; impl. am. Acts 1978, ch. 934, §§ 16, 22, 36; Acts 1979, ch. 18, § 1; impl. am. Acts 1979, ch. 68, § 3; T.C.A. (orig. ed.), § 4-336; Acts 1984, ch. 794, § 1; 2003 , ch. 90, § 2; 2009 , ch. 368, §§ 3, 4; 2011 , ch. 151, §§ 1, 2.