Florida Special District Handbook Online:
The Annual Financial Audit Report
The Annual Financial Audit Report:
- Covers the results of an annual financial audit
- Examines financial statements in order to assess whether they are fairly presented in conformity with generally accepted accounting principles
- Examines whether operations are properly conducted in accordance with legal and regulatory requirements
- Must be filed with:
- The Florida Auditor General
- The Florida Department of Financial Services
Be careful not to confuse the Annual Financial Audit Report with the Annual Financial Report (see The Annual Financial Report). These are two separate reports with two different filing requirements.
Special Districts That Must Provide For an Annual Financial Audit
- All special districts with revenues or combined expenditures and expenses exceeding $100,000
- All special districts whose revenues or combined expenditures and expenses fall between $50,000 and $100,000 and have not had a financial audit for the previous two fiscal years
- All Housing Authorities in accordance with federal audit requirements (Housing Authorities are exempt from the state requirement to file an Annual Financial Audit Report with the Auditor General and Department of Financial Services)
Anytime, or at the direction of the Joint Legislative Auditing Committee, the Auditor General may perform audits of any governmental entity in Florida, including any special district.
In addition, the Joint Legislative Auditing Committee may investigate any matter within the scope of an audit conducted by the Auditor General, and use its powers of subpoena.
Special Districts Must Cooperate with Counties and Municipalities
Counties and municipalities must also comply with the audit requirement. As they prepare their financial audit, they may need financial information from special districts located solely within their boundaries. Therefore, special districts must cooperate with any such request and provide financial information as requested by the county and / or municipality.
Special Procedures For Dependent Special Districts That Are Component Units of a County or Municipality
The audit for dependent special districts that are component units of a county or municipality may be included in the audit of that county or municipality. "Component Unit" is defined in:
Questions concerning whether a special district is a component unit must be directed to the special district's Certified Public Accountant or the appropriate municipality or county. The audit report must clearly state that the special district is a component unit and the special district must be included within the financial statements of the county or municipality.
Procedures to Follow When An Audit is Required
- Create an auditor selection committee (see Section 218.391, Florida Statutes - Auditor selection procedures)
- Define auditor selection procedures. For non-mandatory suggestions see Auditor Selection Guidelines.
- Select an auditor that is an independent certified public accountant licensed pursuant to Chapter 473, Florida Statutes - Public Accountancy.
- Arrange for a financial audit to occur shortly after the beginning of the new fiscal year (usually October 1).
- Ensure that the Annual Financial Audit Report:
- Is prepared in accordance with the Rules of the Auditor General and contains all the required information in Rule 10.557 (see Rules and Guidelines - Local Government)
- Is a single document
- Includes a statement that indicates whether the special district met any financial emergency conditions
Deadline For Submitting the Annual Financial Audit Report
Whichever date is the earliest:
- Within 45 days after the auditor delivers the completed audit report to the special district's governing body
- Nine months after the end of the special district's fiscal year (the due date is each June 30 for most special districts)
How to File the Annual Financial Audit Report
- Mail one paper copy to the Auditor General (for the address, see Direct Contact - Auditor General)
- Email one electronic copy to the Auditor General (for instructions, see Electronic Submission of Local Governmental Entity Audit Reports to the Auditor General)
- Complete and mail or email the “Local Governmental Entity Audit Report Submittal Checklist.” (see Rules and Guidelines - Local Government on the Auditor General's website)
- Email one electronic copy to the Florida Department of Financial Services at firstname.lastname@example.org when filing the Annual Financial Report online (see The Annual Financial Report) or, provide a link to the Annual Financial Audit Report on the special district's web site.
- Give one copy to each member of the special district's governing body
The Auditor General's Review
The Auditor General reviews all audit reports submitted by special districts to identify:
- Financial Trends
- Significant Findings
- Whether the special district met one or more of the financial emergency conditions specified in Section 218.503(1), Florida Statutes. If conditions are met, the Auditor General will notify the Joint Legislative Auditing Committee and the Governor's office. If state assistance is needed, the special district is considered to be in a state of financial emergency (see also Financial Emergencies).
The Auditor General's Reports
The Auditor General prepares a report for the Legislature that summarizes the results of audit reviews. In addition, the Auditor General prepares a report to the Joint Legislative Auditing Committee that indicates if a special district has failed to take full corrective action in response to a recommendation that was included in the two preceding financial audit reports. The committee may direct the special district to provide a written statement to the committee:
- Explaining why full corrective action has not been taken or,
- Describing the corrective action the special district intents to take and when it will occur
If the committee determines that the written statement is not sufficient, it may require the special district to appear before the committee.
Failure to Comply with the Annual Financial Audit Report Requirement
For information about what will happen when a special district does not comply with the Annual Financial Audit Report requirement, see Noncompliance Status Reports: What will happen when special districts fail to comply with important accountability filings and reports.
Contact Someone Who Can Answer Questions About The Annual Financial Audit Report
Special District Investment Requirements
Special district investment activities must be consistent with one of the following:
- A written investment plan containing sixteen specified criteria and adopted by the special district's governing body; or,
- Invested or reinvested in one of the following:
- The Local Government Surplus Funds Trust Fund, or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act of 1969.
- Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency
- Interest-bearing time deposits or savings accounts in qualified public depositories
- Direct obligations of the U.S. Treasury
For more information, see section 218.415, Florida Statutes - Local government investment policies.
Failure to Comply with Special District Investment Requirements
For information about what will happen when a special district that was reported to be in noncompliance with section 218.415, Florida Statutes, fails to take corrective action, see Noncompliance Status Reports: What will happen when special districts fail to comply with important accountability filings and reports (Joint Legislative Auditing Committee section and Technical Assistance section).