The Minnesota Legislature recently changed the Audit and Agreed-Upon Procedures Engagement (AUP) reporting requirements for cities. These changes, enacted during the 2025 legislative session, amend Minnesota Statutes, sections 412.02, subdivision 3 and 412.591, subdivision 3, and are effective August 1, 2025. They raise the audit threshold in 2025, and state it will be adjusted for inflation annually thereafter.^[1] Please refer to 2025 Minn. Laws, ch. 39, art. 6, §§ 10 and 13. 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.