Idaho's 900 special taxing districts had budgets totaling $2.8 billion in 2012.
A new report prepared by the Legislature's audit arm found that just 36 percent of the districts required to comply with the state's audit and reporting requirements are doing so and the state has no enforcement mechanism for failure to comply.
Special districts include counties and cities along with library, fire, highway, urban renewal, water and other specific-function districts.
Some of the districts receive property tax money; others receive fees or assessments.
"There is no clear reporting or oversight function to identify all special districts, track spending levels, and identify those that should be submitting audit reports," says the report released Tuesday from the Legislative Services Office Legislative Audits Division.
The report issued three findings:
No process exists, either in statute or policy, to identify and track special districts to determine compliance with Idaho statutes.
The current statute does not require local governments or special districts to submit financial information, such as approved budgets, to determine compliance with audit requirements.
The statutory requirement that special districts submit an audit to the Legislative Services Office when certain financial thresholds are met has no enforcement mechanism for failure to comply.
Recommendations to remedy the shortcomings include creating a central registry; requiring all local governments and special districts to submit an approved budget to the Legislative Services Office; and changing state law to create a notification and enforcement policy for noncompliance including a penalty, such as withholding funds.