2.4.409    ACTIONS BY GOVERNING BODIES TO RESOLVE OR CORRECT AUDIT FINDINGS AND PENALTY FOR FAILURE TO DO SO

(1) If a local government entity does not submit its responses or planned corrective measures to findings reported in audit reports required by Title 2, chapter 7, part 5, MCA, to the department within 30 days of the report issuance date, the department shall notify the entity of the delinquency and publish notice of the delinquency on the department's website.

(2) The department shall determine acceptability of the local government entity's responses or planned corrective measures based on the risks, facts, and circumstances of the findings and of the entity.

(3) The planned corrective measures must be responsive to the findings identified and provide for a probable resolution of the findings within a reasonable period.

(4) If the department does not receive acceptable corrective measures for findings the department deems to be significant, the department may, in addition to its statutory remedies, request additional details, supporting information, or evidence of implementation of the corrective measures.

(5) The department shall determine the significance of findings based on the risks to the entity of a doubtful going concern, significantly distressed operations, or a failure to protect a substantial public interest.

(6) Any financial assistance withheld must be released to the local government entity once the department finds that the local government entity has initiated or taken corrective measures sufficient to provide for a probable resolution of the findings within a reasonable period.

(7) The department shall obtain the concurrence of the Superintendent of Public Instruction before accepting or rejecting any planned corrective measures or withholding or releasing any financial assistance of any school district or associated cooperative.

(8) If the subsequent audit report repeats a significant finding, the department shall withhold financial assistance from the entity.

(9) The financial assistance withholding process may be suspended if the entity demonstrates good cause for the failure to resolve the finding or implement corrective measures. Good cause may be demonstrated with sufficient evidence of:

(a) the entity's good faith effort to implement corrective measures;

(b) circumstances outside of the entity's control; or

(c) an inability to address a finding or findings because of the passage of time.

(10) If the subsequent audit report is delinquent, the department may withhold financial assistance until the department receives the delinquent audit report that does not repeat a significant finding.

(11) For those local governments that are not required to have an audit for the subsequent fiscal year, the department may require the entity to have a financial review as defined in ARM 2.4.410. The department shall determine the requirement for a financial review on a case-by-case basis, based on the quality of supporting documentation received from the entity to confirm corrective measures have been taken.

(12) The department shall notify all state agencies any time the department issues an order to withhold or release financial assistance.

 

History: 2-7-515, MCA; IMP, 2-7-515, MCA; NEW, 1992 MAR p. 1354, Eff. 7/1/92; AMD, 1997 MAR p. 1027, Eff. 6/24/97; TRANS, from Commerce, 2002 MAR p. 2649; AMD, 2007 MAR p. 964, Eff. 7/6/07; AMD, 2019 MAR p. 2217, Eff. 12/7/19.