|(a) A school district, governmental charter school,
open-enrollment charter school, nonprofit service provider, county
education district, or regional education service center must file
with the Texas Education Agency (TEA) an annual financial and compliance
report and, if applicable, a state compensatory agreed-upon procedures
report. These reports must be audited by an independent auditor, and
the audit must be reviewed by the TEA, including review of auditors'
working papers, in accordance with the Financial Accountability System
Resource Guide, as adopted by reference in §109.41 of this title
(relating to Financial Accountability System Resource Guide).
(b) The annual financial audit report and state compensatory
agreed-upon procedures report are due 150 days after the end of the
(c) Auditors from the TEA must review independent audit
reports. The commissioner's designee must resolve audit findings.
(d) The district or other educational entity must hire
at its own expense an independent auditor to conduct an independent
audit of its financial statements and provide an opinion on its annual
financial and compliance report.
(1) The independent auditor must:
(A) be associated with a certified public accountancy
(CPA) firm that has a current valid license issued by the Texas State
Board of Public Accountancy or a state licensing agency from another
(B) be a certified public accountant with a current
valid license issued by the Texas State Board of Public Accountancy,
as required under the Texas Education Code, §44.008; and
(C) adhere to the generally accepted auditing standards
(GAAS), adopted by the American Institute of CPAs (AICPA), as amended,
and the generally accepted government auditing standards (GAGAS),
adopted by the US Government Accountability Office, as amended.
(2) The CPA firm must:
(A) be a member of the AICPA Governmental Audit Quality
(B) adhere to GAQC's membership requirements; and
(C) collectively have the knowledge, skills, and experience
to be competent for the audit being conducted, including thorough
knowledge of the government auditing requirements and:
(i) Texas public school district environment;
(ii) public sector; or
(iii) nonprofit sector.
(e) If at any time the TEA division responsible for
financial compliance reviews an audit firm's working papers and finds
that the firm or the quality of the work does not meet the standards
required as stated in subsection (d) of this section, the division
may require the district or other educational entity to change its
(f) To the extent that this section conflicts with
any other rule regarding audits of school districts and other educational
entities by independent auditors and the TEA, this section controls.
|Source Note: The provisions of this §109.23 adopted to be effective September 1, 1996, 21 TexReg 2076; amended to be effective October 13, 2002, 27 TexReg 9316; amended to be effective March 10, 2015, 40 TexReg 1084; amended to be effective August 31, 2020, 45 TexReg 5345