(The Center Square) – Florida Auditor General Sherrill Norman has uncovered instances where some nonstate entities receiving taxpayer funds did not comply with state law when it came to their financial records.
For fiscal years ending Oct. 1, 2022, through Sept. 30, 2023, the financial reporting packages of out-of-state nonprofits, for-profit organizations, and other entities were analyzed. Of the 236 reporting packages analyzed, it was found some were submitted past the deadline, some included miscalculations of finances, and others did not include other required documents per state law.
State law requires any nonstate entity that expends more than $750,000 in state financial assistance, to have an audit conducted according to the Florida Single Audit Act.
Of the 236 financial reporting packages, 21 of those did not submit their audits before the required deadline – with eight filing their audits up to 226 days after nine months had elapsed since the entity’s fiscal year end, or an average of 64 days. Another 14 entities filed up to 135 days after their respective audit’s had been delivered.
Norman and her staff further found that some entities did not fully complete their audit documents. Using a sample size of 60 financial reporting packages as of June 30, auditors for 14 of the applicable reporting packages did not include a management letter, nor indicate one was required.
Furthermore, nine auditors did not include the thresholds for distinguishing state projects on the schedule of findings and questioned costs, nor did they calculate thresholds in accordance with Florida Department of Financial Services rules.
The report noted the threshold calculations play an important role in determining major state projects as part of its risk-assessment process – miscalculations could lead to overlooking high-risk state projects, and reduce the audit’s effectiveness and accountability over those projects.
A summary schedule of prior audit findings was not included by five auditors, a requirement according to rules of Norman’s office. Summary schedules provide information about the current status of any previous audit findings related to state financial assistance.
It was further found that four of the audits were performed by audit firms that did not hold an active or temporary license issued by the Department of Business and Professional Regulation – a state law requirement which could lead to disciplinary action for the firms.
Norman recommended entities verify auditors hold valid licenses to practice accountancy in Florida.