(1) As provided by 2-7-515 , MCA, the local government entity shall adopt measures to correct the findings contained in its audit report and shall submit a copy of the corrective action plan, or response to the audit report findings, to the department within 30 days of the entity's receipt of the audit report.

(2) In the case of school districts or associated cooperatives, a copy of the response or corrective action plan must also be filed with the Superintendent of Public Instruction.

(3) If no findings, deficiencies, or recommendations appear in the audit report, no response or corrective action plan is required to be filed with the department.

(4) The department will review the local government entity's response or corrective action plan and notify the entity in writing upon the acceptance of the response or plan.

(5) If the department does not approve all or any portion of a local government entity's response or corrective action plan, or if the department requires additional information in order to evaluate a response, the department will contact the entity regarding the response or corrective action plan.

(6) If deemed necessary by the department, the department may also contact the independent auditor who performed the audit to obtain additional information regarding the facts related to the independent auditor's findings and the reasons for the independent auditor's recommendations.

(7) In the case of a school district or associated cooperative audit, the department shall also contact the Superintendent of Public Instruction regarding the acceptability of a school district's or associated cooperative's response or corrective action plan.

(8) If, as a result of the communications described above, the department agrees to accept the local government entity's response or corrective action plan, the department will notify the entity in writing of that acceptance.

(9) If, as a result of the communications described above, the local government entity agrees to revise all or a portion of its response or corrective action plan, it will submit such changes or revisions to the department in writing.

(10) The department will review the local government entity's revised response or corrective action plan and notify the local government entity in writing when the department has accepted the response or plan.

(11) If, after the communications described above, the department still does not approve all or any portion of a local government entity's response or corrective action plan and the entity does not agree to revise its response or corrective action plan so that it is acceptable to the department, the department will notify the entity in writing of its nonacceptance, the reasons for the nonacceptance and the fact that, pursuant to 2-7-515 , MCA, financial assistance can be withheld from the entity if within 30 days of the date of the notification letter the entity does not develop and submit to the department a response to audit findings or a corrective action plan that is acceptable to the department.

(12) If the department does not receive an acceptable response or corrective action plan within 30 days, it can request, pursuant to 2-7-515 , MCA, that state agencies withhold payments of financial assistance from the local government entity pending receipt of an acceptable response or corrective action plan. The department, after consultation with the appropriate state agency or agencies, may designate the financial assistance payments to be withheld.

(13) In the case of school districts or associated cooperatives, the department will obtain the concurrence of the Superintendent of Public Instruction before issuing an order withholding payments of financial assistance.

(14) Upon receipt by the department of an acceptable response or corrective action plan from the local government entity, the department will notify the entity in writing of the acceptance, and will notify each state agency that any financial assistance withheld pursuant to the department's order is to be released to the local government entity.