Arizona’s repeated failure to submit its required Single Audit by the federal deadline and the potential consequences for federal funding are the subject of a hearing scheduled in the Arizona House of Representatives next week.
The hearing of the Joint Legislative Audit Committee chaired by Representative Matt Gress will feature testimony from Gustav Chiarello, Assistant Secretary for Financial Resources at the U.S. Department of Health and Human Services, whose office notified Governor Hobbs in July that Arizona is not in compliance with federal Single Audit requirements.
A Single Audit is a federally required annual review of the State’s financial statements and its compliance with requirements governing federal funds. It provides a key measure of whether public money is properly accounted for and administered.
In its July notice, HHS cited Arizona’s repeated late audits and warned that continued noncompliance could result in federal enforcement actions, including additional conditions on awards, temporarily withheld payments, disallowed costs, or the suspension or termination of federal awards.
Arizona has missed the federal Single Audit deadline for four consecutive fiscal years. The fiscal year 2025 audit was due March 31, 2026, and remains outstanding. The Auditor General has projected that it may not be issued until March 5, 2027, less than four weeks before the fiscal year 2026 audit is due.
The committee will question witnesses about the causes of the continuing delays, the State’s corrective action plan, which federal funds could be affected, and the steps needed to prevent another missed deadline.
In addition to Assistant Secretary Chiarello, the committee is scheduled to hear from the Arizona Auditor General, Arizona’s three public universities, AHCCCS, the Arizona Department of Education, the Department of Economic Security, the Department of Administration, and the Governor’s Office.
The meeting is scheduled for Monday, September 21, at 9:00 a.m. in House Hearing Room 1.
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