County Water Districts Subject to State Audit Requirements
HELENA — In an opinion issued Wednesday, Attorney General Mike McGrath concluded that county water districts in Montana are local government entities subject to the reporting and auditing requirements contained in state law.
Department of Administration director Scott Darkenwald requested the opinion to resolve a dispute with the Billings Heights County Water District. The district claimed it was not subject to Montana’s Single Audit Act because it did not meet the legal definition of a local government entity that “receives local, state, or federal financial assistance.”
The opinion noted that water districts are political subdivisions of the state and that the Single Audit Act “explicitly states that local government entities include county water districts.” That law requires every local government entity to provide the Department of Administration with an annual financial report and, if the report involves revenue of more than $200,000, to undergo an audit at least every two years.
The purpose of the law is to ensure that the financial condition and operations of all such districts are reasonably conducted and reported, McGrath noted