2.4.406 ROSTER OF INDEPENDENT AUDITORS AUTHORIZED TO CONDUCT AUDITS OF LOCAL GOVERNMENT ENTITIES

(1) To conduct audits of local government entities, an independent auditor must be on the department’s roster of authorized independent auditors.

(2) To be placed on the roster, an auditor shall complete a department-prescribed application form and meet the criteria in this rule.

(3) Auditors with separate offices shall submit separate application forms for each office that is to be separately identified on the roster.

(4) To be eligible for inclusion on the roster, an auditor must:

(a) if an individual, hold a current license to practice public accounting under 37-50-314, MCA;

(b) if a firm that has established or maintained offices in this state for the practice of public accounting, register annually as provided under 37-50-335, MCA;

(d) meet the continuing education requirements specified in Government Auditing Standards, as established by the Comptroller General of the United States;

(e) have an external quality control review at least once every three years that meets the requirements specified in Government Auditing Standards, as established by the Comptroller General of the United States, and receive a peer review rating of "pass" or "pass with deficiencies" from the reviewing firm, team, or association;

(i) a firm that undergoes a board-sanctioned compliance or peer review process and receives a provisional pass with deficiencies rating must complete, or be in the process of completing, all required remediation required by the peer review program administrator;

(ii) upon request, firms with provisional pass with deficiencies ratings shall provide the department all interim and final communications with the peer review program administrator relating to the firm's remedial activities;

(f) not have been restricted in the conduct of governmental auditing by the Montana Board of Public Accountants;

(g) not have been debarred, suspended, proposed for debarment, declared ineligible, or otherwise excluded from performing audits by any state or federal department or agency; and

(h) not have been deemed ineligible to conduct local government entity audits by the department because of failure:

(i) to conduct local government entity audits under contract with the department during the previous two years in accordance with the audit standards described in 2-7-513, MCA, or ARM 2.4.405 or;

(ii) during the previous two years to adhere to the terms and conditions of an audit contract with the department.

(5) An auditor may be removed by the department from the roster for failure to continue to meet the eligibility requirements specified above.

(6) If an auditor is removed from the roster as provided in (5), the auditor must complete the application form prescribed by the department, meet the eligibility requirements set out in (4), and pay the fee specified in (9) to again be placed on the roster.

(7) To remain on the roster, an auditor shall complete and submit to the department on or before June 30 of each year a renewal form certifying that the individual or firm continues to meet the eligibility requirements specified above.

(8) To ensure that each auditor meets the eligibility requirements specified above, the department may, at any other time during the year, require the auditor to submit evidence that the auditor meets the above eligibility requirements, including, but not limited to, documentation of required continuing professional education and the required external quality control review.

(9) At the time of original application for placement on the roster and at the time the annual renewal form is submitted, each office separately identified on the roster shall pay to the department a fee of $100.

(10) If an auditor is removed from or does not renew to the roster, all contracts under the provisions of 2-7-506, MCA, to which the auditor is a party are terminated. If an auditor is removed from the roster, the department will not refund any portion of the roster application fee.

(11) Upon the department’s notification of the termination of a contract for a local government entity audit, the local government entity shall select another auditor from the roster and present a signed contract to the department for approval within 90 days of notification of the termination.

History: 2-7-506, MCA; IMP, 2-7-506, MCA; NEW, 1992 MAR p. 1354, Eff. 7/1/92; AMD, 1997 MAR p. 1027, Eff. 6/24/97; TRANS, from Commerce & AMD, 2002 MAR p. 2649, Eff. 9/27/02; AMD, 2003 MAR p. 2076, Eff. 9/26/03; AMD, 2007 MAR p. 964, Eff. 7/6/07; AMD, 2011 MAR p. 2019, Eff. 9/23/11; AMD, 2019 MAR p. 2217, Eff. 12/7/19.