Montana Department of Administration Answers Audit Questions
The following questions were posed to the State of Montana Department of Administration and are their answers presented in full.
Q: What is the importance of audits and what information do they provide the State and others?
A: In the State of Montana, audits are required of local governments when the annual total revenues are greater than $750,000. Audits are an important way to communicate and provide credibility to the public about the financial operations of the local government; to provide assurance that the entity’s financial statements are accurate and that they are following regulatory guidelines. For detailed information, please see MCA Title 2, Chapter 7, Part 5 (Audits of Political Subdivisions).
Q: What is the purpose of "findings"? Are they action items necessary to bring an entity into compliance with the law and generally accepted practices or merely friendly suggestions?
A: Auditors do not look at all financial data records. Audit procedures are based on several factors to determine the size of the data sampled during the audit. Findings are noted when the results of testing against a set of standards, internal policies and procedures, and compliance guidelines don’t yield the expected results. Local governments use audit findings to improve or adjust financial controls.
The Department of Administration tracks all audit findings and has the responsibility of monitoring repeated significant issues. Failure to resolve significant findings or implement corrective measures may result in the withholding of financial assistance in accordance with rules adopted by the Department pending resolution or compliance (MCA 2-7-515). (Emphasis mine)
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