In a recent meeting of the Joint Legislative Audit Committee (JLAC), significant discussions centered around the ongoing challenges faced by the Arizona Department of Administration (ADOA) and the Department of Economic Security (DES) in meeting audit deadlines for the fiscal year 2023. The meeting highlighted the critical need for timely submission of financial statements and compliance audits, particularly from the Arizona Health Care Cost Containment System (ACCESS), which has been identified as a major bottleneck in the auditing process.

Nicole Bartlett, the statewide audit manager with the Arizona Auditor General, reported that the fiscal year 2023 financial statements and federal compliance audits, originally due by March 31, 2024, were delayed due to previous audit complications. The audits are currently in the fieldwork stage, but the lack of timely submissions from key agencies, especially ACCESS, has hindered progress. ACCESS has missed multiple deadlines for submitting its financial information, which is crucial for determining the scope of federal audits.

The committee expressed concern over the potential repercussions of these delays, including funding restrictions from federal agencies. For instance, the University of Arizona risks forfeiting a $1.2 million federal award if the audit is not completed by September 1, 2024. The urgency of the situation was underscored by the need for ACCESS to provide its final financial statements and the Schedule of Expenditures of Federal Awards (SEFA) to ADOA, which in turn must relay this information to the Auditor General.

Michael Weishardt, deputy director at ADOA, acknowledged the complexities involved and emphasized the department's commitment to improving communication and coordination with all state agencies to ensure timely submissions. He noted that ADOA has recently hired additional staff to bolster its financial consulting team, aiming to facilitate a smoother audit process moving forward.

ACCESS's assistant director, Jeff Teigen, indicated that the agency has submitted draft financial statements and is working closely with external auditors to finalize them. However, he cautioned that unforeseen issues could still delay the process, despite a target completion date of June 30, 2024.

The committee concluded the meeting with a commitment to follow up on the status of the audits by the end of the month, emphasizing the importance of accountability and transparency in the state's financial operations. The ongoing delays and the need for timely audits remain a pressing concern for state officials, as they navigate the complexities of federal compliance and funding requirements.