Legislative auditors tell JFAC many findings are recent but some uncorrected problems persist, LUMA delays audit timeline

April Renfro, director of Legislative Audits in the Legislative Services Office, told the Joint Finance and Appropriation Committee on Jan. 7 that the office is issuing an annual report on uncorrected audit findings and that most remaining findings are from the current reporting period.

Renfro said the audit division completes the annual audit of the State—s Comprehensive Annual Financial Report (ACFR), the statewide single audit (federal schedule/SF-ATA equivalent), and recurring accountability reports that examine internal controls and compliance at state agencies. "We are required to present a report annually to the legislature of uncorrected findings," she said.

The nut graf: The audit office reported that about 70% of outstanding findings are from the most recent reporting period and therefore await the first follow-up procedures; roughly 30% are older items that the agency has not corrected after follow-up. Renfro warned that late delivery of financial statements tied to the state—s new accounting system (LUMA) is delaying the ACFR and single-audit work and could require additional communications with federal cognizant agencies.

Key details and context

- Scope and staffing: Renfro described the audit division as one of four divisions in Legislative Services and said statute (cited in testimony as Idaho Code 67,702) authorizes the office—s scope. She said the division has about 30 financial and information-technology auditor positions plus one administrative assistant and a few vacancies.

- Types of work: The office issues an opinion on the ACFR and a single-audit report (federal schedule) and conducts accountability reports of agencies at least once every three years. Accountability reports focus on internal controls and compliance at a finer level than the ACFR audit because materiality thresholds differ for a $14,000,000,000 statewide financial statement versus program-level work.

- Follow-up process: For ACFR and single-audit opinion reports, agencies provide prior-audit summaries and corrective-action evidence; auditors perform procedures and may re-issue findings if agency claims are insufficient. For accountability reports, the office conducts a 90-day follow-up, a first annual follow-up and, if needed, a second annual follow-up, and classifies findings as corrected, partially corrected or uncorrected.

Findings highlighted in testimony

- Travel documentation (example): An older uncorrected finding with the Department of Fish and Game involved noncompliance with state travel policy and insufficient documentation. The agency implemented some policies but the auditors found the correction reversed to uncorrected during follow-up when the auditors could not obtain adequate supporting samples after the state—s July 1, 2023 LUMA transition.

- Foster care / QRTP placements (Department of Health and Welfare): Renfro flagged findings in the fiscal 2023 accountability report about qualified residential treatment program (QRTP) placements. In a sample of 19 placements auditors found: 10% lacked a completed placement assessment, 5% lacked required details, 21% lacked a located court order in the agency files, 5% of placements were not made within 60 days of the start date, 84% did not retain the court notice of placement documenting date and recommended level of care, and 42% lacked required 30-day case consultations. Renfro said these gaps are significant because they affect whether children receive appropriate levels of care.

- Systemic IT controls and benefit matrices: Renfro said systemic issues commonly arise where application/system design permits segregation-of-duty weaknesses or where annual updates to program benefits (for example the LIHEAP benefits matrix) lack documented review and approval, increasing the risk of undetected errors even when auditors did not find a monetary misstatement in the sample.

Timing and delays

Renfro said the office expects the ACFR audit and single-audit report to be delayed this cycle because the Office of the State Controller did not provide draft financial statements until Dec. 30, after the usual November delivery window. The audit office estimated completion of the ACFR audit around March 13—2 and indicated that completing the single audit by the March 31 deadline is unlikely. She said she will contact the federal cognizant agency (HHS) proactively to discuss the timing.

Committee comments and enforcement options

Committee members and co-chairs emphasized that timely corrective action matters for appropriations oversight. One co-chair said withholding subsequent appropriations has been used previously when agencies did not cure findings. Senator Cook asked whether auditors review legislative "intent language"; Renfro said auditors review tracking of appropriations and compliance with intent language when directed or when performing accountability reviews.

Why it matters

Audit findings can affect budget decisions, agency credibility and federal funding oversight. The committee's ability to identify open findings tied to an agency—s budget allows members to question whether funding increases are appropriate until corrective action is shown to work.

Ending

Renfro said the uncorrected findings report would be issued to committee members the same day as the briefing and encouraged workgroup members to review agency-specific open findings in the legislative budget materials. "We prepared the report to make it easy to link back and look at the full body of the finding," she said.