Mid-Year Public Finance Audit Checklist

But halfway through is also the perfect moment to pause and ask, “How are we doing?”

That is where a mid-year public finance audit checklist proves its value. It is not just a set of tasks or deadlines. It is a touchpoint.

A time to reflect on financial health, reconnect with core responsibilities, and realign with the public mission you are entrusted to serve.

At Endow Law, we have worked with finance directors, superintendents, bond counsel, and city attorneys across the country.

One common thread runs through the most successful agencies: they make space in the middle of the year to ask the right questions and have meaningful conversations.

A mid-year public finance audit checklist is a structured approach to reviewing financial performance, legal compliance, and internal controls during the middle of the fiscal year. It is a way to get ahead of potential issues, improve accuracy, and avoid surprises later.

Unlike the annual audit, which focuses on what has already happened, a mid-year review is forward-looking. It helps finance teams identify small misalignments before they grow into larger problems.

More importantly, it supports open communication between departments, boards, advisors, and community stakeholders.

The Government Finance Officers Association encourages interim financial reporting as a best practice for transparency and accountability.

When done thoughtfully, the checklist becomes more than a management tool. It becomes a way to reinforce trust.

Start by comparing your year-to-date revenues and expenditures with your adopted budget. Are you where you expected to be? Are there accounts that show early overages or underspending?

If you spot a variance, take the time to ask why. Maybe there is a delayed state reimbursement or a higher-than-expected insurance premium. Use this insight to forecast for the second half of the year and talk with your board about any needed adjustments.

This step is not just about numbers. It is about staying connected to your operational reality and making sure your financial plan is still aligned with your community’s goals.

You might have budget authority, but do you have enough cash in the bank to cover upcoming obligations? That is the question your mid-year public finance audit checklist should help answer.

Look at what is coming in and going out over the next few months. Will you have enough liquidity for payroll, vendor payments, and debt service? If not, are there timing shifts or interim financing options to consider?

Cash flow challenges are common, especially in agencies that rely on seasonal revenues. Addressing them now is always easier than reacting in crisis.

 Healthy fund balances show that your agency is prepared for the unexpected. Take time mid-year to review where you stand.

Make sure your general fund reserves are within board-adopted policy ranges. Review restricted and committed funds to confirm they are labeled and tracked correctly. If your agency made any fund transfers, check that they were properly documented and authorized.

These mid-year conversations help board members understand the bigger picture. They also support public confidence in your agency’s financial management.

Debt management is about more than making payments on time. It is also about monitoring obligations and preparing for upcoming decisions.

During your mid-year review, confirm that all scheduled debt service payments have been completed.

Review bond covenants, especially if they include financial ratios or reporting requirements. If there are opportunities for refunding or restructuring, talk with your advisors early.

It is easy to assume everything is on track. Taking a closer look now can help you avoid technical defaults or missed reporting deadlines.

For agencies that have issued tax-exempt bonds, the IRS expects ongoing compliance with post-issuance rules. This part of your mid-year public finance audit checklist helps you stay ahead.

Check that proceeds are still being used for qualified public purposes. Review facility use to make sure there has been no private use that could affect tax status. Update your arbitrage tracking or rebate calculations if needed.

Maintaining a post-issuance compliance file and updating it mid-year is a simple but powerful way to reduce risk.

Municipal issuers have obligations under SEC Rule 15c2-12 to file annual disclosures and report material events. These apply whether or not you are issuing new debt this year.

Mid-year is a good time to confirm that prior filings were submitted on time. If anything has changed—a rating update, new financial obligation, or policy change—document it and discuss whether a filing is needed.

Many compliance concerns come not from bad faith but from misunderstanding. A proactive mid-year review gives you time to catch anything that may have been overlooked.

Procurement can be one of the most visible—and scrutinized—parts of public operations. That is why your mid-year public finance audit checklist should include a review of contracts and purchasing activity.

Look at recently awarded contracts. Were they approved properly? Did they follow competitive bidding thresholds? Are any significant contracts coming up for renewal?

If your agency tracks diversity goals or local vendor participation, check your progress and adjust as needed. This part of the checklist is about accountability and fairness.

Internal controls help prevent errors and protect public resources. But they only work if they are followed consistently.

Mid-year is the right time to revisit key controls. Are duties still properly segregated? Are reconciliations being completed? Are approvals and documentation in order?

Test a few transactions, not to catch mistakes, but to confirm that your systems are still functioning well. This helps strengthen your control environment and builds a culture of responsibility.

Capital projects can span years and often involve complex funding. That is why a mid-year review is important.

Look at project timelines and spending. Are they on track? Are bond proceeds being used for eligible expenses? Are interest earnings being reported properly?

If any project scope or schedule has changed, it may be time to revisit board authorizations or update disclosures.

Staying on top of capital finances helps avoid delays and maintains community confidence.

The mid-year public finance audit checklist is not about perfection. It is about being present.

It is a chance to reflect on what has happened so far, prepare for what is ahead, and recommit to the purpose of public service. It creates space for honesty, collaboration, and leadership.

When agencies pause mid-year, they not only reduce stress at audit time. They also create stronger, more resilient systems that serve people better.

At Endow Law, we believe the best public finance work happens when legal, financial, and operational teams work together in rhythm. The checklist is just the beginning. The real work is in the conversations it makes possible.