Cities catch up on late financial reports

Better late than never, the saying goes. And Columbia Falls plans to release its fiscal year 2011 annual report soon.

A notice published in last Friday’s Inter Lake by the Montana Local Government Services Bureau announced that the city was more than 180 days delinquent in filing its annual financial report.

State law requires counties, cities, towns and other local government entities to publish the extensive annual reports within six months of the close of each fiscal year, or by Dec. 31, and to have an independent audit of them done at least biannually.

The reports include an introduction, government-wide financial statements, a management discussion and analysis and a variety of supplemental notes and statistical information.

Also listed as delinquent in the bureau’s public notice were Bad Rock Rural Fire District and Evergreen No. 1 Rural Fire District.

“Bottom line is I didn’t finish it this year as quickly as I would have liked,” Columbia Falls City Manager Susan Nicosia said.

Nicosia, a certified public accountant and formerly the city’s finance director, spent much of the last year pulling double duty to fill a vacancy left after she became city manager last June.

The city’s annual financial report is expected to be filed with the state and printed and released and posted to the city’s website for public viewing within a week.

“The audit firm has already come in and audited and said everything looks great. We’re just finishing the last little run through it,” Nicosia said of the document. “It’s late, but accurate. And it won’t be late next time.”

The delinquency resulted in some minimal penalties for the city.

“If it’s gotten to the point that a city is so delinquent that we publish something in the paper, then a $50 fine goes along with that,” said Kay Gray, chief of the Montana Local Government Services Bureau.

Delinquent entities also are charged an additional 10 percent of their annual report filing fee for each month they are late.

The annual report filing fee, which is paid to the state, is based on a government entity’s total revenues.

In the case of Columbia Falls, the filing fee is $890, resulting in an $89 penalty for each month the city is delinquent. Through mid-July, the city’s late penalty totaled $445.

“They’re asking us to abate the whole penalty, so we’ll take that request under consideration,” Gray said.

Gray said the state is not interested in collecting the late penalties as much as getting local governments to file their annual reports. “We feel it’s really important for accountability and transparency for entities to do their reporting and to do it in a timely manner,” she said.

Counties and cities and towns with dedicated accounting staff usually are able to get their annual financial reports done on time, Gray said. “Smaller entities tend to struggle more.”

State records also indicated that Polson was more than 180 days delinquent on its fiscal year 2011 annual report, but City Manager Todd Crossett said the document was filed with the state within the last week and is available for review in City Hall.

“When I got here the city was quite a bit behind” on its financial reporting, Crossett said. “We’ve been consistently catching up over the last three years. The audit process is quite substantial. This year we’ll be caught up and fully on time.”

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.