Deadlines for mandatory audits in 2026

Currently, about 25 municipalities have failed to file their independent financial audits for 2024, as required by the Local Government Audit Law, C.R.S. §§ 29-1-601 to -608. Each year, every Colorado municipality and any subordinate districts or authorities must submit an independent financial audit for the prior year or an exemption application to the Office of the State Auditor. Failure to meet these requirements results in the withholding of property tax revenue and potentially removal from office. If your municipality has failed to file previous audits, CML can help connect you with the state auditor to develop a plan to come into compliance.

Plan now to meet deadlines for your 2025 audit by scheduling board actions, collecting financial data, and engaging an independent auditor. The Audit Law has strict deadlines that cannot be waived. Apply early if you anticipate qualifying for the exemption or needing an extension for the audit. Applications should also be submitted electronically to avoid delays; postmarks don’t count as proof of submission.

• March 31 (or 3 months after the accounting year end): deadline for applications for exemptions for the prior year (there is no extension for exemption applications)
• June 30 (or 6 months after the accounting year end): deadline for auditor to submit audit to the municipality
• July 31 (or 7 months after the accounting year end): deadline for audits or one-time 60-day extensions to Sept. 30 

Exemption applications must be personally reviewed, approved, and signed by a majority of the governing board. Exemption applications must be submitted each year. The state auditor recommends including an approved resolution as evidence of majority approval. To qualify for an exemption, neither revenues nor expenditures exceed $1,000,000 for the year beginning Jan. 1, 2025 (the thresholds were lower prior years). For municipalities under a $200,000 threshold, the exemption uses a simplified form and needs only to be prepared by a person “skilled in governmental accounting” who isn’t associated with the municipality. For municipalities over that threshold, the form is more thorough and requires preparation by an “independent accountant with knowledge of governmental accounting.” CML’s listservs for clerks, managers, and finance officers may be helpful to identify potential mutual assistance from other municipalities or to identify other professional help. Information on the listservs can be found at https://www.cml.org/home/networking-events/Listservs.

For more information, contact CML staff or the Office of the State Auditor, Local Government Audit Division (https://content.leg.colorado.gov/agencies/office-state-auditor/local-government). Current forms for exemption applications and extensions can be found on the state auditor’s website.