Extension Requests

Louisiana Revised Statute (R.S.) 24:513 and 24:514 (the audit law) requires local governments and quasi-public organizations (local auditees) to provide their annual financial reports to the Louisiana Legislative Auditor (LLA). The audit law also provides for the due dates of these reports.

Before 2005, the audit law did not give LLA the authority to extend the due dates of local auditee reports. In 2005, the Louisiana Legislature amended the audit law to provide for extensions due to gubernatorially declared disasters or emergencies. Legislation in subsequent years provided for extensions for other reasons.

LLA’s current policies and procedures regarding extensions support its objective of assisting local auditees that are unable to submit their annual financial reports by the statutory due date through no fault of their own, while ensuring that their reports are submitted in as timely a manner as possible.

Emergency Extension Requests – In 2005, following Hurricanes Katrina and Rita, the Louisiana Legislature amended the audit law to include a provision that allowed a local auditee to request an extension in which to file its annual financial report with LLA when a gubernatorially declared disaster or emergency prevented the local auditee from completing the report by the statutory due date. LLA’s granting of an emergency extension request was subject to approval by the Legislative Audit Advisory Council (LAAC).

Non-emergency Extension Requests – During the 2007 Legislative Session, language was added to House Bill 1 (the General Appropriations Act) and House Bill 2 (the Capital Outlay Act) that prohibited the payment of funds authorized in these acts to any recipient that had failed to comply with the audit law and had not obtained an extension from LLA.

Because the language in House Bills 1 and 2 was silent as to the criteria under which an extension could be granted, LLA began approving extensions for reasons other than gubernatorially declared disasters or emergencies in 2007.

In 2007, LLA also began publishing on its website a list of local auditees that had failed to comply with the audit law. The noncompliance list is reviewed by the Louisiana Department of Treasury and other state agencies before paying state funds to local auditees.

A provision for non-emergency extension requests was promulgated in R.S. 39:72.1 by Act 771 of the Regular Legislative Session of 2008.

LLA Extension Request Policies and Procedures Regarding Extension Requests – Extensions are requested by a local auditee or the CPA performing the local auditee’s audit, review/attestation or compilation engagement, through the extension request form available on LLA’s website. A full explanation of the reason the report is delayed must accompany the request along with the date by which the report is expected to be submitted to LLA.

A committee of three LLA employees (the Legislative Auditor, the Director of Local Government Services (LGS), and the Local Government Reporting (LGR) Manager) determines whether each extension request should be approved.

In order to support the objectives of timely financial reporting and compliance with the audit law, approval of non-emergency extension requests is the exception, not the rule. In order for a non-emergency extension request to be considered for approval, both of the following criteria must be met:

• The report for the prior year must have been received by the LLA, and

• The reason for the extension request must be beyond the control of the local auditee.

• The local auditee must have engaged a CPA firm, approved by LLA, to perform its audit or other engagement no later than sixty days after its fiscal year end, or
• The local auditee must have submitted two of its last three annual financial reports to LLA by (a) the statutory due date or (b) up to 90 days after the statutory due date with an approved extension.

The extension is granted subject to confirmation by LAAC.

An exception may be made when the denial of an extension will adversely and significantly impact public safety, health, or welfare as determined by the Legislative Auditor and the chairperson of LAAC.

If the auditee does not meet the above criteria, the LGR Manager will prepare a worksheet that includes the reporting history and the extent that the auditee relies on public funds for its operations. This will be given to the Legislative Auditor for his determination as to whether a denial of the extension will "adversely and significantly" impact public safety, health or welfare of the public.

• If the Legislative Auditor approves the extension, he writes a letter to the LAAC Chair and attaches the extension request from the auditee to secure the Chair's agreement and approval to grant the extension.
  • If the LAAC Chair agrees, then the extension is granted subject to confirmation by LAAC.

• If the Legislative Auditor does not approve the extension or if the LAAC Chair does not approve the extension, the auditee is placed on the Non-Compliance List (NCL) and invited to attend the next scheduled LAAC meeting to appeal the decision directly to LAAC. Auditees who choose not to attend the LAAC meeting will remain on the NCL until their report is submitted. Auditees who choose to appeal to LAAC will be required to bring a written appeal request to the meeting on agency letterhead that is signed by the agency head and addressed to the Legislative Auditor and LAAC members. This letter should include:
  • The harm that denial of the extension will cause the public and their agency,
  • The current status of submitting their report,
  • The date that the LLA can expect to receive their report,
  • A written plan for ongoing submission of timely reports; and
  • A commitment to engage timely in the future.

At the LAAC meeting, LAAC will make an independent determination as to whether the auditee has shown "good cause" that the extension should be granted as permitted in R.S. 39:72.1(C).

• If the LAAC Committee approves the extension, the auditee is removed from the NCL.
• Any extensions that LAAC denies are communicated to the auditee and the auditee remains on the NCL until the report is submitted.

LLA is more flexible regarding the criteria for approving emergency extension requests. However, LLA also works with a local auditee that requests an emergency extension to ensure that it will be providing its annual financial report in as timely a manner as possible.

Extension Requests – Ninety Days or Less According to its current policy, LLA may approve an emergency or non-emergency extension request for up to ninety days after the statutory due date of the local auditee’s report, subject to subsequent confirmation by LAAC.

At each LAAC meeting LLA provides a list of all ninety day or less extension requests approved by LLA since the last LAAC meeting. LAAC votes on confirmation of the extension requests.

Extension Requests – Greater Than Ninety Days Extension requests that are greater than ninety days after the due date of a report are not approved by LLA, but by LAAC.

Extension Requests and Late Report Findings If a non-emergency extension request is approved for a report, that report is required to include a finding regarding the local auditee’s noncompliance with the audit law by failing to submit its annual financial report to the LLA by the statutory due date.

If an emergency extension request is approved for a report, that report is not required to include this finding.

If an extension request is denied, the local auditee is considered non-compliant with the audit law and will be placed on the noncompliance list until the report is received by LLA.