Audit Guide

Education Code Section 14502.1 requires the Controller, in consultation with the Department of Finance, the State Department of Education, and representatives of specified organizations, to propose the content of a guide for the required annual financial and compliance audits of school districts, offices of county superintendents of schools, and other local education agencies.  Section 14502.1 further requires the Controller to submit the proposed audit guide to the Education Audit Appeals Panel for review and possible amendment.  The Panel is then to adopt the audit guide, pursuant to the rulemaking procedures of the Administrative Procedure Act, by July 1 of the fiscal year to be audited (and any supplement, as authorized, before March 1 of the audit year).

Audit Guide for 2012-13

Supplement to 2012-13 Audit Guide

At its January 28, 2013 meeting, the Panel adopted a set of emergency regulations to amend the audit guide to address legislative changes in the conditions of apportionment of school funding that affect the current audit year.  The Panel also directed staff to begin the regular rulemaking process leading to eventual adoption, following public comment, of the same amendments as permanent regulations. 

The emergency regulations were approved by the Office of Administrative Law and filed with the Secretary of State on February 12, 2013.  The emergency regulations will remain in effect as part of the 2012-13 audit guide until replaced by the permanent regulations through the process explained below.

Emergency Supplemental 2012-13 Audit Guide Regulations (January 28, 2013)

The Notice of Proposed Rulemaking for the permanent supplemental regulations was published in the California Regulatory Notice Register on February 15, 2013.  The Notice, which provides information on the public comment process; the Initial Statement of Reasons, which describes the proposed changes to the audit guide; and the text of the proposed permanent supplemental regulations were posted on this website and mailed to all persons who have requested notification of EAAP regulations on February 13, 2013. 

Notice of Proposed Supplemental Rulemaking

Initial Statement of Reasons (January 28, 2013)

Proposed Permanent Supplemental 2012-13 Audit Guide Regulations (January 28, 2013)

As explained in the Notice, the written comment period ends April 1, 2013.  After adoption of the permanent regulations, an updated audit guide booklet will be made available.

Annual Update

The Panel adopted the permanent regulations at its meeting on June 25, 2012.  OAL approved the regulations and filed them with the Secretary of State on July 31, 2012. 

The booklet, Standards and Procedures for Audits of California K-12 Local Education Agencies 2012-13, which constitutes the audit guide to be used in the performance of the audits required by Education Code Section 41020 for the 2012-13 fiscal year, includes Appendix A, Federal Compliance Requirements, with links to the 2012 OMB Circular A-133 Compliance Supplement, and Appendix B, Agency Addresses and Contacts.  The booklet is provided below.

PDF, for printing one-side only (July 31, 2012) (Indexed with Bookmarks - click tab on left.)

Word Document (July 31, 2012) (Note that the automatic outline numbering feature has been turned off, so that paragraph designations will not change if a section of the regulations is broken into separate parts.)

Annual Update - 2012-13 - Statements of Reasons

Initial Statement of Reasons (March 26, 2012)

Final Statement of Reasons  (June 25, 2012)

Audit Guide for 2011-12

Permanent regulations for the update of the 2011-12 audit guide were adopted by the Panel at its June 27, 2011 meeting.  The Office of Administrative Law approved the permanent regulations and filed them with the Secretary of State on August 15, 2011.

The booklet, Standards and Procedures for Audits of California K-12 Local Education Agencies 2011-12, which constitutes the audit guide to be used in the performance of the audits required by Education Code Section 41020 for the 2011-12 fiscal year, includes Appendix A, Federal Compliance Requirements, with links to the 2011 OMB Circular A-133 Compliance Supplement, and Appendix B, Agency Addresses and Contacts.  The booklet is provided below.

PDF, for printing one-side only (February 9, 2012) (Indexed with Bookmarks - click tab on left.)

Word Document (February 9, 2012) (Note that the automatic outline numbering feature has been turned off, so that paragraph designations will not change if a section of the regulations is broken into separate parts.)

Annual Update – 2011-12 – Statements of Reasons:

Initial Statement of Reasons (April 11, 2011)

Final Statement of Reasons (June 27, 2011)

Supplement to 2011-12 – Statements of Reasons:

Initial Statement of Reasons (January 23, 2012)

Final Statement of Reasons (March 26, 2012)

Audit Guide for 2010-11

Annual Update

At its June 28, 2010, meeting, the Panel adopted permanent regulations for the update of the 2010-11 audit guide.  The regulations were approved by OAL and filed with the Secretary of State on July 23, 2010.

The booklet, Standards and Procedures for Audits of California K-12 Local Education Agencies 2010-11, which constitutes the audit guide to be used in the performance of the audits required by Education Code Section 41020 for the 2010-11 fiscal year, is provided below.

The booklet includes Appendix A, Federal Compliance Requirements, with links to the 2009 OMB Circular A133 Compliance Supplement and Compliance Supplement Addendum #1 dated June 30, 2009, and Appendix B, Agency Addresses and Contacts.  As noted in the footnote to Appendix A, the Compliance Supplement links will be updated when available for 2010.

PDF, for printing one-side only (July 23, 2010) (Indexed with Bookmarks – click tab on left)

PDF, for two-sided printing (mirrored margins) (July 23, 2010)

Word Document (July 23, 2010) (Note that the automatic outline numbering feature has been turned off, so that paragraph designations will not change if a section of the regulations is broken into separate parts.)

Annual Update – 2010-11 – Statements of Reasons:

Initial Statement of Reasons (April 9, 2010)

Final Statement of Reasons (June 28, 2010)

Note:  Supplemental regulations—to address issues resulting from new legislation that changes conditions of apportionment—were not necessary.

Audit Guide for 2009-10

Permanent regulations for the update of the 2009-10 audit guide were adopted by the Panel at its August 24, 2009, meeting. The regulations were approved by OAL and filed with the Secretary of State on December 16, 2009. 

On June 9, 2010, OAL approved and filed with the Secretary of State the permanent supplemental regulations for audits of the 2009-10 fiscal year that were adopted by the Panel at its February 1, 2010, meeting.   

The booklet, Standards and Procedures for Audits of California K-12 Local Education Agencies 2009-10, which constitutes the audit guide to be used in the performance of the audits required by Education Code Section 41020 for the 2009-10 fiscal year, is provided below.  It includes Appendix A, Federal Compliance Requirements, with links to the 2009 OMB Circular A‑133 Compliance Supplement and Compliance Supplement Addendum #1 dated June 30, 2009, and Appendix B, Agency Addresses and Contacts. 

PDF, for printing one-side only (June 9, 2010) (Indexed with Bookmarks – click tab on left.)

PDF, for two-sided printing (mirrored margins) (June 9, 2010)

Word Document (June 9, 2010) (Note that the automatic outline numbering feature has been turned off, so that paragraph designations will not change if a section of the regulations is broken into separate parts.)

Annual Update – 2009-10 – Statements of Reasons:

Initial Statement of Reasons (June 19, 2009)

Final Statement of Reasons (October 8, 2009)

Supplement to 2009-10 – Statements of Reasons:

Initial Statement of Reasons (February 19, 2010)

Final Statement of Reasons (April 26, 2010)

Audit Guide for 2008-09

 Effective February 20, 2009, education trailer bill Senate Bill 4 of the 2009-10 Third Extraordinary Session (SBX3 4; Chapter 12, Statutes 2009) was enacted.  SBX3 4 made significant changes in law, some of which impact the conduct of audits for the 2008-09 fiscal year.  The bill was enacted too late for EAAP to promulgate supplementary regulations to incorporate the changes into the Audit Guide before March 1. 

On April 15, 2009, the State Controller’s Office issued an advisory – http://www.sco.ca.gov/pubs_guides_lea.html.  Click the Fiscal Year 2008 - 09 link under the heading “Local Educational Agency Guide Advisory.”

Revised 2008-09 Audit Guide:  EAAP incorporated 2008-09 changes in the updated regulations for 2009-10, so that the 2008-09 audit guide was revised effective June 29, 2009.  These changes were explained in the Informative Digest included in the Finding of Emergency for the 2009-10 emergency regulations:

·       removed four programs (§§ 19821, 19822, 19827, and 19838),

·       reduced procedures for one program (§ 19828.3),

·       reduced penalties for non-compliance in another program (new § 19845.2),

·       limited one program to fiscal year 2008-09 (§ 19837.2),

·       amended one section to conform to statute (subparagraph (b)(4) of § 19846 now says “six hours a week or three days a week” instead of ‘hours and days’).

Additionally, the number of procedures for Community Day Schools was reduced from 9 to 3 in Section 19816(f)(6), but the corresponding amendment of Section 19825 was inadvertently omitted from the regulations proposals. As stated in the State Controller advisory referenced above, it is not necessary for audits of fiscal year 2008-09 to perform the procedures in subparagraphs (e) and (g) – or to make the consequent findings specified in subparagraphs (f) and (h) of Section 19825.

PDF, for printing one-side only (Revised June 29, 2009) (Indexed with Bookmarks – click tab on left.)

PDF, for two-sided printing (mirrored margins) (Revised June 29, 2009)

Word Document (Revised June 29, 2009) (Note that the automatic outline numbering feature has been turned off, so that paragraph designations will not change if a section of the regulations is broken into separate parts.)

Annual Update

At its July 28, 2008, meeting, the Panel adopted final permanent regulations for the 2008-09 audit guide.  The Office of Administrative Law approved the permanent regulations and filed them with the Secretary of State on September 9, 2008. 

The booklet, Standards and Procedures for Audits of California K-12 Local Education Agencies 2008-09, which constitutes the audit guide to be used in the performance of the audits required by Education Code Section 41020 for the 2008-09 fiscal year, includes Appendix A, Federal Compliance Requirements, with links to the 2008 OMB Circular A‑133 Compliance Supplement, and Appendix B, Agency Addresses and Contacts. 

PDF, for printing one-side only (September 9, 2008) (Indexed with Bookmarks – click tab on left.)

PDF, for two-sided printing (mirrored margins) (September 9, 2008)

Word Document (September 9, 2008) (Note that the automatic outline numbering feature has been turned off, so that paragraph designations will not change if a section of the regulations is broken into separate parts.)

Annual Update – 2008-09 – Statements of Reasons:

Initial Statement of Reasons (May 30, 2008)

Final Statement of Reasons (July 28, 2008)

Audit Guide for 2007-08

Annual Update

At its regular meeting on July 30, 2007, the Panel adopted final permanent regulations for the 2007-08 audit guide.  The Office of Administrative Law approved the permanent regulations and filed them with the Secretary of State on September 10, 2007.

The booklet, Standards and Procedures for Audits of California K-12 Local Education Agencies 2007-08, which constitutes the audit guide to be used in the performance of the audits required by Education Code Section 41020 for the 2007-08 fiscal year, includes Appendix A, Federal Compliance Requirements, with links to the 2007 OMB Circular A‑133 Compliance Supplement, and Appendix B, Agency Addresses and Contacts. 

PDF, for printing one-side only (September 10, 2007) (Indexed with Bookmarks – click tab on left.)

PDF, for two-sided printing (mirrored margins) (September 10, 2007)

Word Document (September 10, 2007) (Note that the automatic outline numbering feature has been turned off, so that paragraph designations will not change if a section of the regulations is broken into separate parts.)

Annual Update – 2007-08 – Statements of Reasons:

Initial Statement of Reasons (May 11, 2007)

Final Statement of Reasons (August 1, 2007)

Note:  Supplemental regulations—to address issues resulting from new legislation that changes conditions of apportionment—were not necessary.

Audit Guide for 2006-07

Annual Update

The Education Audit Appeals Panel took action at its September 18, 2006, meeting to finalize changes to the annual audit guide for fiscal year 2006-07.  The Office of Administrative Law (OAL) approved the permanent regulations and filed them with the Secretary of State on September 29, 2006.

Note:  Supplemental regulations—to address issues resulting from new legislation that changes conditions of apportionment—were not necessary.

At its January 29, 2007, meeting, the Panel adopted nonsubstantive amendments to four sections of the audit guide.  Sections 19851 and 19852 direct auditors to verify compliance with various requirements of the Education Code that pertain to offering independent study (“nonclassroom-based instruction”) in lieu of classroom attendance, in charter schools.  For clarity, the title of Section 19852 was amended from “Additional Nonclassroom-Based Instruction” to “Mode of Instruction”; and the order of sections 19851 and 19852 was reversed.  Because “nonclassroom-based instruction” is defined as instruction that does not meet the requirements specified as a condition of apportionment for "classroom-based instruction" (Education Section 47612.5(e)(1), (2)), the determination must first be made whether the Average Daily Attendance (ADA) reported as having been generated through classroom-based instruction met the statutory requirements for that classification, and then any ADA reported as classroom-based but not meeting applicable requirements, as well as that reported as nonclassroom-based, can be evaluated for compliance with requirements for nonclassroom-based instruction.   Conforming changes were made in subdivision (f)(4) of Section 19816, and in the first sentence of Section 19853.   OAL approved the nonsubstantive amendments and filed them with the Secretary of State on March 1, 2007.

The booklet, Standards and Procedures for Audits of California K-12 Local Educational Agencies 2006-07, which constitutes the audit guide to be used in the performance of the audits required by Education Code Section 41020 for the 2006-07 fiscal year, includes Appendix A, Federal Compliance Requirements, with links to the 2006 OMB Circular A‑133 Compliance Supplement, and Appendix B, Agency Addresses and Contacts.  The documents that follow have been modified from those previously posted here to include the nonsubstantive amendments described above.

PDF, for printing one-side only (March 1, 2007) (Indexed with Bookmarks – click tab on left.)

PDF, for two-sided printing (mirrored margins) (March 1, 2007)

Word Document (March 1, 2007) (Note that the automatic outline numbering feature has been turned off, so that paragraph designations will not change if a section of the regulations is broken into separate parts.)

Annual Update – 2006-07 – Statements of Reasons:

Initial Statement of Reasons for the 2006-07 Audit Regulations (May 5, 2006)

Amended Final Statement of Reasons for the 2006-07 Audit Regulations (September 18, 2006)

Audit Guide for 2005-06

On June 9, 2006, OAL approved and filed with the Secretary of State the permanent supplemental regulations for audits of the 2005-06 fiscal year that the Panel had adopted at its April 24, 2006, meeting.  In addition to nonsubstantial amendments to sections 19851 and 19853 with regard to charter schools’ pupil-to-teacher ratio options in nonclassroom-based instruction, these regulations included other nonsubstantial changes to the emergency supplemental regulations that had been in effect since February 17, 2006, to clarify the applicability of the components of the audit guide regulations to audits of charter schools. 

The June 9, 2006, update to the audit guide booklet, containing the full audit guide regulations for 2005-06 audits as well as a table of contents, is available below.  This version of the audit guide booklet differs from the April 24, 2006, version previously posted on this site only in the updating of cross references to correspond to the renumbered regulations:  Section 19816 Definitions (reference to Section 19813 is changed to 19815), and Section 19836 California School-Age Families Education (Cal-SAFE) Program (reference to Section 19815 is changed to 19813).

The booklet, Standards and Procedures for Audits of California K-12 Local Educational Agencies 2005-06, which constitutes the audit guide to be used in the performance of the audits required by Education Code Section 41020 for the 2005-06 fiscal year, includes Appendix A, Federal Compliance Requirements, with links to the 2004 OMB Circular A‑133 Compliance Supplement, and the 2005 Compliance Supplement Updates, and Appendix B, Agency Addresses and Contacts.

Changes to Organization of Audit Guide (June 9, 2006)

PDF, for printing one-side only (June 9, 2006)  (Indexed with Bookmarks – click tab on left.)

PDF, for two-sided printing (mirrored margins) (June 9, 2006)

Word Document (June 9, 2006) (Note that the automatic outline numbering feature has been turned off, so that paragraph designations will not change if a section of the regulations is broken into separate parts.)

Annual Update – 2005-06 – Statements of Reasons:

Initial Statement of Reasons for the 2005-06 Audit Regulations (May 6, 2005)

Revised Final Statement of Reasons for the 2005-06 Audit Regulations (October 11, 2005)

Supplement to 2005-06 – Statements of Reasons:

Initial Statement of Reasons for the 2005-06 Supplemental Audit Regulations (February 17, 2006)

Revised Final Statement of Reasons for the 2005-06 Supplemental Audit Regulations (June 9, 2006)

Audit Guide for 2004-05

Standards and Procedures for Audits of California K‑12 Local Educational Agencies 2004‑05—full audit guide regulations (including clarifying amendments to § 19826.1(d), effective November 10, 2005, and to § 19836, first paragraph, and subdivisions (d) and (e), effective April 14, 2005)

Appendix A: Federal Compliance Requirements—including links to the 2004 OMB Circular A‑133 Compliance Supplement, and the 2005 Compliance Supplement Updates

Appendix B: Agency Addresses and Contacts

The November 10, 2005, version posted below differs from the May 23, 2005, version previously posted on this site only to the extent of the nonsubstantial, clarifying amendments made effective April 14, 2005, and November 10, 2005.

PDF, for printing one-side-only (November 10, 2005)  (Indexed with Bookmarks – click tab on left.)

PDF, for two-sided printing (mirrored margins) (November 10, 2005)

Word Document (November 10, 2005)  (Note that the automatic outline numbering feature has been turned off, so that paragraph designations will not change if a section of the regulations is broken into separate parts.)

Annual Update – 2004-05 – Statements of Reasons:

Initial Statement of Reasons for the 2004-05 Audit Regulations (June 17, 2004)

Final Statement of Reasons for the 2004-05 Audit Regulations (December  9, 2004)

Supplement to 2004-05 – Statements of Reasons:

Initial Statement of Reasons for the Supplemental 2004-05 Audit Regulations (February 10, 2005)

Final Statement of Reasons for the Supplemental 2004-05 Audit Regulations (May 23, 2005)

Audit Guide for 2003-04

Standards and Procedures for Audits of California K-12 Local Educational Agencies 2003-04—full audit guide regulations

Appendix A: Federal Compliance Requirements—including a link to the 2004 OMB Circular A‑133 Compliance Supplement

Appendix B: Agency Addresses and Contacts

The portable document format (PDF) versions are fully indexed with Bookmarks (click the tab on the left of the document).

PDF, for printing one-side-only (June 23, 2004)

PDF, for two-sided printing (mirrored margins) (June 23, 2004)

Word Document (June 23, 2004) (Note that if a section of the regulations is broken into separate parts, the automatic outline numbering may change and require manual restoration.)

Initial Adoption of the Audit Guide Regulations – Statements of Reasons:

Initial Statement of Reasons for the 2003-04 Audit Regulations (February 6, 2004)

Final Statement of Reasons for the 2003-04 Audit Regulations (May 6, 2004)