(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).
[(a)The performance and review of
required school district, charter school, county education district,
and regional education service center independent audits and agreed-upon
procedures report, as applicable, including review of auditors' working
papers, shall be accomplished 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
fiscal year.
(c)Auditors from the TEA must [Texas
Education Agency shall] review independent audit reports. The
commissioner's designee must resolve audit findings. [Audit
findings shall be resolved by the commissioner's designee.]
(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;
(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
Center (GAQC);
(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; or
(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 audit firm.
(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.
The agency certifies that legal counsel has reviewed
the proposal and found it to be within the state agency's legal authority
to adopt.
Filed with the Office
of the Secretary of State on December 3, 2014
TRD-201405806 Cristina De La Fuente-Valadez
Director, Rulemaking
Texas Education Agency
Earliest possible date of adoption: January 18, 2015
For further information, please call: (512) 475-1497
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