On Feb. 3, 2022, the state of California finally produced its audited financial statements for its fiscal year that ended June 30, 2020. The filing, known as an annual comprehensive financial report, was over a year late and came with an unpleasant surprise in the form of a qualified audit opinion.
State and local governments are normally expected to produce financial statements within six-to-nine months of the fiscal year’s end. California has now missed the nine-month municipal bond market filing deadline for three consecutive years. And, with less than two months to the deadline for its fiscal year 2021 financial reports (for the fiscal year that ended June 30, 2021), another late filing seems inevitable.
California’s financial reporting performance compares poorly with most other states. According to data from Truth in Accounting, the median U.S. state produced its 2020 annual comprehensive financial report 184 days after the end of its fiscal year. By contrast, California took 583 days, nearly 20 months, to file its annual comprehensive financial report for fiscal year 2020. For added perspective, it is worth noting that the Securities and Exchange Commission gives large corporations just 60 days to produce their audited financials.
Author(s): Marc Joffe
Publication Date: 7 Feb 2022
Publication Site: Reason