One of the most frequent questions we get this time of year is “my audit wasn't submitted by October 31st? What happens now?"
While the contracted due date for all June 30 fiscal year end entities is October 31, not all units are able to submit their audits by this date, for a variety of reasons, most of which are fairly inconsequential. If your audit will be submitted to us by December 1, 2019 you don't need to do anything. We have a grace period from November 1 to 11:59 pm on December 1 during which time you can submit your 2019 audit with no additional documents or notifications needed. We will not consider the audit to be late for purposes of writing unit letters or for purposes of amending audit contracts as long as it is received in our portal by 11:59 pm on December 1. The portal will date and time stamp each document that is submitted.
If your audit will not be in by December 1, you and your auditor will need to submit an LGC-205 Amendment to Contract to Audit Accounts. You can access the form here, and its instructions here. The form has various fields included where you can modify the expected completion date of the audit, as well as modify the fee if that will be changing. The form must include a sufficient explanation as to why the audit could not be completed by the original October 31 due date. New this year, the form also asks what steps are being taken to remedy the circumstances that caused the audit to be late. Finally, the form must be signed by the parties that signed the original contract. If an elected or appointed official has left office in the interim, the person that currently holds that office or position may sign in his or her place. The same applies if the audit firm representative is no longer available to sign the amendment.
If there is a fee change, the amendment must be pre-audited!
With regards to other consequences of a late audit, these can vary depending on your unit's circumstances. If the unit has submitted its audit late multiple times in recent years, you will likely get a unit letter about this, asking that you respond, telling us how you will prevent the audit from being late in the future. Similarly, if you are planning to go before the LGC with a debt approval request, the Commission members will expect you to have a solid plan in place to make sure the audit is on time in the future. The plan will vary based on what caused the audit to be late.
If your unit is not usually late filing its audit, there is not likely to be a unit letter regarding a late audit. This may be the case for multiple units this year that will be late filing as a result of Hurricane Florence. Other than filing the amended contract form, there will be nothing else you need to do.
If you are planning to go before the LGC with a debt approval request, we must have your 2019 audit in order to move forward. Late audits can sometimes disrupt a unit's plans for debt issuance – be sure to let your auditor know if you need the report for debt issuance purposes.
In summary, the occasional late audit is not cause for concern in general. However, timely audits are much more useful to users of the information, and all units should make a timely audit their goal each year.
Please feel free to call us to discuss your individual issues regarding the completion of your audit. We can be reached at (919) 814-4299.