Rhode Island

Only 11 of 39: Most RI Cities and Towns Missed the Legal Deadline for Their Audits Again, and the Law’s $10,000-a-Month Penalty Goes Unmentioned

Virtue Forge briefing · Based on the R.I. Office of the Auditor General’s Report on Statutory Compliance – Financial Reporting Requirements for Local Governmental Entities, Fiscal Year 2025 (Oct. 21, 2026), R.I. Gen. Laws §§ 45-10-5 and 45-10-5.3, and Uprise RI (Oct. 22, 2026)

What happened

Rhode Island law requires every city and town to file an independent audit of its books with the state within six months after its fiscal year ends. For most towns, that deadline was Dec. 31, 2025. In its annual compliance report to the General Assembly’s Joint Committee on Legislative Services, dated Oct. 21, Auditor General David A. Bergantino found that only 11 of the state’s 39 municipalities (28%) filed on time for fiscal 2025.

According to the report’s municipal results table (status as of Aug. 31, 2026):

• Timely (11): Burrillville, Central Falls, East Greenwich, Exeter, Jamestown, Newport, Portsmouth, Providence, Smithfield, West Greenwich, West Warwick.
• Late, 7–9 months (11): Barrington, Coventry, Cranston, Cumberland, Glocester, Johnston, Narragansett, North Kingstown, North Smithfield, South Kingstown, Westerly.
• Significantly late, more than 9 months (11): Bristol, Charlestown, Foster, Hopkinton, Lincoln, Middletown, North Providence, Richmond, Scituate, Tiverton, Warwick.
• Still unfiled as of Aug. 31 (6): East Providence, Little Compton, New Shoreham, Pawtucket (filed Sept. 30, according to a footnote), Warren, Woonsocket.

The trend is getting worse. The report’s five-year table shows municipal on-time filing at 36% in FY2021, 33% in FY2022, 36% in FY2023, 31% in FY2024 and 28% in FY2025. The report says “Municipality compliance continues to decline.”

The worst cases, according to the report:

• Woonsocket “has not filed timely audited financial statements in the last five years.” Its FY2024 statements “remain unissued, twenty-seven months after year-end,” and bond rating agencies have withdrawn its ratings.
• East Providence, whose fiscal year ends Oct. 31, filed its FY2024 audit in late June 2026, “twenty months after year-end.” Its FY2025 audit, due April 30, 2026, had not been filed.
• Little Compton’s FY2025 audit was still unissued “fourteen months after year-end.” Preliminary figures show a General Fund operating deficit of about $1.1 million, after the town used reserves to fund its FY2024 and FY2025 budgets.
• Warren “continues a negative trend of issuing audited financial statements later each year”; its FY2025 audit was still outstanding more than 15 months after year-end. Pawtucket issued its audit 15 months after year-end. Warwick took more than 12 months.

The money problems behind the paperwork. The report also lists deficits:

• Cranston’s FY2025 audit showed operating deficits of $6.5 million in the General Fund and $3.9 million in the school fund, plus an $11.4 million fund-balance deficit in the internal service funds that pay employee health insurance.
• Cumulative school deficits stood at about $4.5 million in Coventry, $5.6 million in Johnston and $6.8 million in Warwick.
• The Auditor General warned that school districts in Cranston, Glocester, Newport and North Providence could exhaust their school reserves if operating deficits continue in 2026 and 2027.
• The auditors of the Blackstone Valley Mayoral Academy charter school included a “Substantial Doubt about the Organization’s Ability to Continue as a Going Concern” paragraph after net-asset losses of $877,000, $2.3 million and $3.3 million in three years.

Why late audits matter. The report itself says so: audits issued later than nine months after year-end “can result in the preparation and adoption of budgets without the benefit of audit results for the preceding fiscal period. Such instances can leave decision-makers unaware of structural deficits during consecutive budget cycles, leading to larger cumulative deficits over time.”

Causes and fixes. The Auditor General blames staff turnover, a shortage of governmental accountants, too few audit firms bidding (one firm quit government auditing over the past year), “improper planning,” financial reporting “not being prioritized,” new accounting standards and a “lack of succession planning.” The planned response is more meetings, a 45-day advance notice requirement for audits expected to run more than 30 days late, training events and approval of new audit firms. The report says compliance with mandated financial reporting “is something that will be monitored more closely.”

What the law says, and what the report doesn’t: R.I. Gen. Laws § 45-10-5.3 says failure to file the audit report “shall result in a sanction being imposed equal to ten thousand dollars ($10,000) per month” (or a larger amount tied to a town’s state revenue-sharing aid), “calculated from the due date of the audit or any approved extension date until the date the report is filed.” The statute lets the general treasurer withhold unpaid penalties from state aid on the Auditor General’s certification. The 25-page report does not mention the penalty at all. It does not say whether any sanction was assessed or collected, or which towns received extensions. Under § 45-10-5, the Auditor General may grant extensions “only upon reasonable cause,” and the penalty clock starts from any approved extension date, so we cannot calculate what any town owes. Whether these sanctions are ever imposed is an open question. We plan to ask.

Fact check: (1) The figures come from the primary source. We read the Auditor General’s PDF directly. The 11/11/11/6 split and the five-year percentages come from its tables, and Uprise RI’s summary matches them. (2) “Timely” is a narrow test. The report counts a filing as timely if the audit opinion is dated within six months and the report is submitted within seven business days. A town in the “late” column may have had an approved extension. (3) Status is as of Aug. 31, 2026. Some towns have filed since then; Pawtucket filed Sept. 30. (4) The report gives the 28% figure for municipalities only. Charter schools, educational collaboratives and Tier I and II fire districts improved this year. (5) Woonsocket’s audit troubles are covered in more detail in an earlier Virtue Forge briefing.

Virtue Forge commentary

An audit is a government’s report card to the people who pay for it. Rhode Island law gives towns six months to produce one, and for five straight years roughly two-thirds of them haven’t. This year 28 of 39 missed the deadline, and six still hadn’t filed by Aug. 31. Any private company that sold stock to the public would face regulators, lenders and shareholders if it filed this late. Cities and towns face a report to a legislative committee chaired by the House Speaker, which comes out every fall and changes little.

The report’s own warning is the strongest argument here. Councils vote on budgets “without the benefit of audit results,” structural deficits go unnoticed “during consecutive budget cycles,” and the hole grows. Audits are where the numbers become official. In Cranston, which filed only about three weeks late, the audit confirmed a $6.5 million general fund deficit, a $3.9 million school deficit and an $11.4 million hole in the health insurance funds, and that prompted the Auditor General to step in right away. In towns that file a year or more late, the same kind of news reaches voters only after another budget has already been passed.

The General Assembly has already written a penalty into law, and it is mandatory: failure to file “shall result in a sanction” of at least $10,000 a month. Yet the Auditor General’s annual report to the Assembly does not mention it. Instead, it offers consultation, training sessions and a promise to monitor “more closely.” The staffing shortage is real, and so is the shortage of audit firms. But a deadline nobody enforces does not work as a deadline. If the penalty is unworkable, the legislature should change it in public. If it works, it should be applied, and the report should say so.

Bias check: The causes the Auditor General lists are real, and many are not one town’s fault. The Government Finance Officers Association reports that audit times have risen nationwide. The supply of accountants has shrunk, one firm left Rhode Island government auditing this year, and new accounting standards add work. A fine taken from a struggling town’s state aid could also make things worse for residents. Some towns, like Coventry, have clearly improved under steady leadership. And the Auditor General’s office does useful, unglamorous oversight work, including approving deficit-reduction plans and holding quarterly meetings. Our criticism is about enforcement and transparency, not about the auditors’ diligence.

What to watch: whether any town is actually sanctioned under § 45-10-5.3; whether East Providence, Little Compton, New Shoreham, Warren and Woonsocket file before their FY2026 audits come due Dec. 31, 2026 (East Providence’s is due later because of its Oct. 31 year-end); whether Cranston’s FY2026 numbers confirm the deficits the report called “probable”; and whether the General Assembly’s Joint Committee on Legislative Services, which received the report, does anything with it.

Original reporting

Read the underlying sources:

R.I. Office of the Auditor General — Report on Statutory Compliance, Financial Reporting Requirements for Local Governmental Entities, Fiscal Year 2025 (Oct. 21, 2026; PDF)

R.I. Office of the Auditor General — Fiscal Year 2024 report (Sept. 9, 2025; PDF)

R.I. Gen. Laws § 45-10-5 — Filing of audit report

R.I. Gen. Laws § 45-10-5.3 — Failure to file audit report: enforcement and penalty

R.I. Office of the Auditor General — Procedures for requesting an extension of time

Uprise RI — Auditor: Only About 28% of RI Towns Filed Audits on Time (Oct. 22, 2026)