Finding 1240804 (2025-018)

2025-018 Audit Report Filing Deadline ALN Title: Drinking Water State Revolving Fund ALN Number: 66.468 Pass-through Entity: Montana Department of Natural Resources and Conservation Condition: The City's fiscal year 2025 Single Audit was not completed and submitted within the required federal and State reporting deadlines. Context: The City was subject to the Single Audit requirements for fiscal year 2025. The need for a Single Audit was not identified until after initial audit planning had begun, which required additional federal audit procedures and reporting beyond those originally planned. The audit and related reporting package were completed after the applicable filing deadline. Criteria: Under 2 CFR 200.512, the audit, data collection form, and reporting package are required to be submitted to the Federal Audit Clearinghouse within 30 calendar days after the auditee receives the auditor's reports or nine months after the end of the audit period, whichever is earlier. For the City's June 30, 2025 fiscal year-end, the nine-month deadline was March 31, 2026. Montana's Local Government Services Bureau also identifies March 31 as the filing date for federal Single Audit reports and requires reports to comply with federal Single Audit requirements and ARM 2.4.411. Effect: The City did not comply with the required federal and State Single Audit reporting deadlines for fiscal year 2025. Cause: The City did not identify that federal expenditures for fiscal year 2025 would require a Single Audit until after the audit planning process had begun. As a result, the additional audit procedures and reporting requirements necessary for the Single Audit were not incorporated into the original audit planning and reporting timeline. Recommendation: We recommend the City establish procedures to monitor federal expenditures throughout the fiscal year and determine whether the Single Audit threshold has been met before yearend audit planning begins. The City should communicate the anticipated need for a Single Audit to its auditor timely so the additional audit procedures and reporting requirements can be incorporated into the audit plan and schedule.