Merritt Research Services has released its 2012 report on the timeliness of municipal audits, showing little change from prior years. This year's study, examined over 38,000 audits over the five-year period from 2007-2011, and over 8,000 audits for fiscal 2011 alone. While most analysts and investors continue to expect a six-month lag between the end of a borrower's fiscal year and the completion of its audit, the study shows a wide variance among sectors - and among individual issuers.
The 2012 study revealed a median audit time of 145 days for fiscal year 2011, compared to 146 days for fiscal 2010.
"Timely financial reporting can make a difference in warning investors, as well as taxpayers, about potential credit vulnerabilities, and can also clarify credit standing in cases where distress has already been identified," said Richard Ciccarone, President and Chief Executive Officer of Merritt Research Services.
"The importance of receiving timely credit information in the municipal bond market was reinforced over the past year by bankruptcy or default concerns related to a small but significant number of highly publicized cities that have been in the headlines."
Highlights of this year's study include:
* Across all sectors, the median audit time for fiscal 2011 was 145 days.
* Issuers in the wholesale electric sector continued to complete their audits faster than issuers in other sectors. The median audit time for this sector in fiscal 2011 was 107 days.
* States and territories were the slowest to complete their audits, with a median audit time of 182 days.
* Syracuse University earned special recognition for being a consistent leader among large municipal borrowers when it comes to timely financial reporting. Its audit has been completed within a range of 27 to 37 days in each of the last five years.
The full report, entitled New, Expanded Municipal Bond Audit Timing Study Shows Little Change from Previous Years, can be accessed by clicking on this link: Merritt 2012 Municipal Bond Audit Timing Study.