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Audit delay leaves lawmakers using interim reports as $88M surplus, $18.3M lapses reshape FY2027 plan
Summary
At a July Committee of the Whole hearing, lawmakers pressed budget officials over a missing fiscal-year audit and relied on interim monthly reports that show about $88 million in excess revenue and an estimated $18.3 million in agency lapses — figures officials say could change and do not eliminate funding gaps created by a BPT rollback.
Senate budget lawmakers questioned administration finance officials on July 10 about the absence of the fiscal-year audit and how the committee should use interim financial reports while final audit results are delayed.
Speaker Blas pressed staff on when the audit would be released; an agency official responding to the committee said audits are generally due June 30 but that delays have pushed the FY25 audit’s expected issuance to the end of November. "Financial statements always have a value," the official said, adding that the administration has accelerated efforts to produce statements and that monthly and quarterly reports can be relied on for budgeting in the absence of an audit.
Why it matters: The committee must set recurring FY2027 appropriations while the audit is pending. Finance staff told senators they were working off the June CRER/CE R, which showed an updated excess general-fund position of about $88,000,000 above adopted levels. Separately, staff estimated about $18,300,000 in lapses as of May — unobligated appropriations that arose because agencies have not yet spent their full budgets.
The budget director cautioned the committee that the $88 million figure is fluid: "That CER can rise, but it can also drop," the official said. Officials described their method for lapses — annualizing expenditures through May to project year-end lapses — and acknowledged a margin of error.
Budget consequence: Finance staff and the legislature’s budget office said the rollback of the business privilege tax (BPT) to 4% reduced recurring revenues by roughly $43–44 million versus the executive’s 4.5% assumption. Officials told senators that combination — a reduced revenue base and the uncertainty of lapses and audit timing — was why some previously requested items were not included in the FY27 substitute bill.
Quotes from the hearing: "So this would be fiscal 25," an agency official told Speaker Blas when asked about the expected audit date. "We released the fiscal 24 audit in April... we are moving into fiscal 25... and we expect to issue the audit by the end of November." The budget director described the lapse estimate method and said, "When we're talking about hundreds... give me a 10% error rate. I can accept that."
What’s next: Officials said they will continue to update the committee when June and subsequent monthly reports are finalized and when the audit becomes available. Senators pressed for clarity on whether projected lapses and excess revenues could be treated as cash available for new appropriations; officials warned they cannot be treated as guaranteed until records and audits are finalized.
Ending: The hearing recessed for a short break to allow members to review a rebuttal packet; lawmakers planned further rounds of questioning on agency chapters and to follow up when the audit and updated CRER are released.
