The letter to all 50 states indicates the federal government will "no longer ignore" audits that go unresolved.
Ball, a Republican, cited the notice in a communication with the governor that accused his core team of adopting a tone that "does not reflect a desire to cooperate."
Read the auditor's full letter.
In response, the Democratic governor offered up his own list of complaints.
"It's not that we don't take audits seriously and we read them. It's that the audits from this auditor are not professional. They are hyperbolic. They are political all through. All you have to do is read the titles of them. A press release goes out before we ever see the audit and the auditing standards are not followed," he said during Team Kentucky update.
The testy back-and-forth between the governor and the auditor is only the latest in a string of public disagreements. Over the last year, the officials clashed over executive spending, alleged overcharged taxes, and reported improper licensing.
In this latest letter, Ball wrote that she wants the taxpayers to know that Beshear is putting federal funds in jeopardy and her office will "continue to collaborate with the Trump administration" and remain "committed to transparency."