Arizona misses federal audit deadline again; state officials say reforms and extra staff have cut delays

The Joint Legislative Audit Committee was updated on March 12, 2025 about continued delays in Arizona’s fiscal‑year financial statements and the federal single audit. Auditors said the state will again miss the federally required March 31 deadline for FY24 audits but reported measurable improvements over the previous year.

The status: why the state is late

Catherine Edwards Decker, financial audit division director at the Auditor General’s office, told the committee that FY24 audits are due Monday, March 31, but the office already knew Arizona would not meet that deadline. She said the Auditor General’s office started FY24 audit work in January 2025 to accelerate the process and had increased resources, including overtime and contracted auditors, to help close gaps.

‘‘We are seeing improvements with ADOA’s timelines,’’ Decker said, noting the draft of the federal schedule of expenditures of federal awards (the CIFA) was provided six months earlier than in the prior year. She warned, however, that continued delays could produce federal actions such as additional cash monitoring, withholding of funds, or other compliance measures that carry financial and operational consequences.

Agency steps and prospects

State comptroller Ashley Racinas told JLAC that the Department of Administration has used ARPA funds to create a Financial Consulting Group to assist agencies with technical guidance and process improvements. She said the state expects the Department of Economic Security (DES) to finalize outstanding adjustments so ADOA can submit a complete CIFA; DES submitted final drafts on March 14 and the state expected to review and return comments by March 31. Racinas said those steps and the extra staffing led to an estimated five‑month improvement in issuance timelines compared with FY23.

ACCESS (Arizona Health Care Cost Containment System), which oversees Medicaid payment flows, said it had completed most fieldwork and was building FY25 documentation while the FY24 drafts were under review. ‘‘We are effectively working on our 25 audit right now, while we wait for the other teams to complete their work,’’ ACCESS staff said.

Risks of continued delays

Auditors told the committee that prolonged audit delays can trigger federal consequences, increase monitoring and potentially lead to withheld federal funds or lower credit ratings for state borrowing. They also said late reporting can hamper agencies’ ability to correct deficiencies promptly, which can increase year‑to‑year audit workloads and findings.

What lawmakers asked and next steps

Committee members sought clarity about who bears responsibility for missed deadlines and whether ADOA can impose internal penalties on agency leaders for late submissions. Auditors said they were not aware of statutory penalties for agency heads and identified ADOA as the central coordinator responsible for compiling and providing audited data. Members asked for further details and a short progress briefing at the next JLAC meeting.

Ending

Officials said improvements are real but fragility persists: several agencies must meet immediate data deadlines and provide clean, final information to ADOA so auditors can issue consolidated FY24 reports and begin on-time FY25 work. The Auditor General and ADOA pledged to provide additional updates to JLAC about progress and possible federal responses.