5 CCR s 19816

Cal. Admin. Code tit. 5, s 19816

CALIFORNIA CODE OF REGULATIONS
TITLE 5. EDUCATION
DIVISION 1.5. EDUCATION AUDIT APPEALS PANEL
CHAPTER 3. AUDITS OF CALIFORNIA K-12 LOCAL EDUCATION AGENCIES
ARTICLE 2. AUDIT REPORTS
This database is current through 02/09/07, Register 2007, No. 6
s 19816. Definitions.

The content of the audit report sections and subsections specified in
Section 19815 is as described in theCodification of Statements on Auditing
Standards, published by the American Institute of Certified Public
Accountants, theCodification of Governmental Accounting and Financial
Reporting Standardspublished by the Governmental Accounting Standards
Board (GASB), orGovernment Auditing Standardspublished by the Comptroller
General of the United States, in the respective editions applicable to the
fiscal year being audited, or as defined in one of the following:
(a) "Government Auditing Standards" means the publication by the
Comptroller General of the United States, United States General Accounting
Office, originally issued in 1972 and revised from time to time, commonly
known as the "Yellow Book," that contains standards for audits of
government organizations, programs, activities, and functions and that is
referenced in Education Code sections 14501, 14503, and 41020(b)(4).

(b) "Local Education Agency Organization Structure" means a description in
the Supplementary Information section that sets forth the following
information, at a minimum:

(1) The date on which the local education agency was established,
and for charter schools the date and granting authority of each
charter;

(2) The date and a general description of any change during the
year audited in a school district's boundaries;

(3) The numbers by type of schools in the local education agency;

(4) The names, titles, terms, and term expiration dates of all
members of the governing board;

(5) The names, with their titles, of the superintendent, chief
business official, and deputy/associate/assistant superintendents.

(c) "OMB Circular A-133" means the publication, produced by the federal
Office of Management and Budget and titledAudits of States, Local
Governments, and Non-Profit Organizations, that sets forth standards for
attaining consistency and uniformity in the audits of governments and
organizations expending federal awards.

(d) "Reconciliation of Annual Financial and Budget Report with Audited
Financial Statements" means a schedule that displays the differences
between the ending fund balance(s) from the audited financial statements
and the unaudited ending fund balance(s) from the annual financial and
budget report for each fund in which a variance occurred.

(e) "Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in
Accordance withGovernment Auditing Standards" means the component of the
Other Independent Auditor's Reports that specifies material instances of
noncompliance, if any; defines reportable conditions and specifies the
reportable conditions disclosed as a result of the audit; defines material
weaknesses and specifies the material weaknesses, if any, that were
disclosed by the audit; includes a statement that no material weaknesses
were found, if that is the case; includes a statement that nonmaterial
noncompliance and nonreportable conditions involving the internal control
structure and its operation were communicated to management in a separate
management letter, if that is the case; specifies all instances of fraud
and illegal acts, if any, that were disclosed by the audit, unless clearly
inconsequential; and specifies material abuse, if any, that was disclosed
by the audit.

(f) "Report on State Compliance" means the component of the Other
Independent Auditor's Reports that specifically and separately addresses
each of the state compliance requirements included in this audit guide
that are applicable to the year audited, stating whether or not the
district is in compliance with those requirements; includes a chart that
displays the number of audit procedures for each compliance requirement
applicable to the year audited and states that the audit procedures
included in the audit guide for each requirement were followed in the
making of the audit, if that is the case, or, if not, what other
procedures were followed; and includes an expression of positive assurance
with respect to compliance with applicable laws and regulations for those
items tested in accordance with those regulations, and negative assurance
for untested items.

(1) The numbers of audit procedures for the compliance requirements
included in this audit guide for audits of fiscal year 2003-04 are

Attendance Reporting, 6;

Kindergarten Continuance, 3;

Independent Study, 22;

Continuation Education, 10;

Adult Education, 9;

Regional Occupational Centers and Programs, 6;

Instructional Time and Staff Development Reform Program, 7;

Instructional Time for school districts, 4; for county offices of
education, 3;

Community Day Schools, 9;

Instructional Materials general requirements, 9; K-8 only, 1;
grades 9-12 only, 1;

Ratios of Administrative Employees to Teachers, 1;

Early Retirement Incentive Program, 4;

Gann Limit Calculation, 1;

Class Size Reduction (including in charter schools): general
requirements, 7; Option One, 3; Option Two, 4; districts or charter
schools with only one school serving K-3, 4.

(2) The numbers of audit procedures for the compliance requirements
included in this audit guide for audits of fiscal year 2004-05 are

Attendance Reporting, 8;

Kindergarten Continuance, 3;

Independent Study, 22;

Continuation Education, 10;

Adult Education, 9;

Regional Occupational Centers and Programs, 6;

Instructional Time and Staff Development Reform Program, 7;

Instructional Time for school districts, 4; for county offices of
education, 3;

Community Day Schools, 9;

Instructional Materials general requirements, 12; K-8 only, 1;
grades 9-12 only, 1;

Ratios of Administrative Employees to Teachers, 1;

Early Retirement Incentive Program, 4;

Gann Limit Calculation, 1;

School Construction Funds: School District Bonds, 3; State School
Facilities Funds, 1;

Alternative Pension Plans, 2;

Proposition 20 Lottery Funds (Cardenas Textbook Act of 2000), 2;

State Lottery Funds (California State Lottery Act of 1984), 2;

California School Age Families Education (Cal-SAFE) Program, 3;

School Accountability Report Card, 3;

Class Size Reduction (including in charter schools): general
requirements, 7; Option One, 3; Option Two, 4; districts or charter
schools with only one school serving K-3, 4.

(3) The numbers of audit procedures for the compliance requirements
included in this audit guide for audits of fiscal year 2005-06 are

Attendance Reporting, 8;

Kindergarten Continuance, 3;

Independent Study, 22;

Continuation Education, 10;

Adult Education, 9;

Regional Occupational Centers and Programs, 6;

Instructional Time for school districts, 4; for county offices of
education, 3;

Community Day Schools, 9;

Morgan-Hart Class Size Reduction Program, 7;

Instructional Materials general requirements, 12; K-8 only, 1;
grades 9-12 only, 1;

Ratios of Administrative Employees to Teachers, 1;

Early Retirement Incentive Program, 4;

Gann Limit Calculation, 1;

School Construction Funds: School District Bonds, 3; State School
Facilities Funds, 1;

Alternative Pension Plans, 2;

Proposition 20 Lottery Funds (Cardenas Textbook Act of 2000), 2;

State Lottery Funds (California State Lottery Act of 1984), 2;

California School Age Families Education (Cal-SAFE) Program, 3;

School Accountability Report Card, 3;

Class Size Reduction (including in charter schools): general
requirements, 7; Option One, 3; Option Two, 4; districts or charter
schools with only one school serving K-3, 4;

Contemporaneous Records of Attendance, for charter schools, 1;

Nonclassroom-Based Instruction/Independent Study, for charter
schools, 15;

Additional Nonclassroom-Based Instruction, for charter schools, 1;

Determination of Funding for Nonclassroom-Based Instruction, for
charter schools, 3;

Annual Instructional Minutes - Classroom Based, for charter
schools, 3.

(4) The numbers of audit procedures for the compliance requirements
included in this audit guide for audits of fiscal year 2006-07 are

Attendance Reporting, 8;

Kindergarten Continuance, 3;

Independent Study, 23;

Continuation Education, 10;

Adult Education, 9;

Regional Occupational Centers and Programs, 6;

Instructional Time for school districts, 6; for county offices of
education, 3;

Community Day Schools, 9;

Morgan-Hart Class Size Reduction Program, 7;

Instructional Materials general requirements, 12; K-8 only, 1;
grades 9-12 only, 1;

Ratios of Administrative Employees to Teachers, 1;

Early Retirement Incentive Program, 4;

Gann Limit Calculation, 1;

School Construction Funds: School District Bonds, 3; State School
Facilities Funds, 1;

Alternative Pension Plans, 2;

Excess Sick Leave, 2 or 3;

Notice of Right To Elect California State Teachers Retirement
System (CalSTRS) Membership, 1;

Proposition 20 Lottery Funds (Cardenas Textbook Act of 2000), 2;

State Lottery Funds (California State Lottery Act of 1984), 2;

California School Age Families Education (Cal-SAFE) Program, 3;

School Accountability Report Card, 3;

Class Size Reduction (including in charter schools): general
requirements, 7; Option One, 3; Option Two, 4; districts or charter
schools with only one school serving K-3, 4;

Contemporaneous Records of Attendance, for charter schools, 1;

Nonclassroom-Based Instruction/Independent Study, for charter
schools, 15;

Additional Nonclassroom-Based Instruction, for charter schools, 1;

Determination of Funding for Nonclassroom-Based Instruction, for
charter schools, 3;

Annual Instructional Minutes - Classroom Based, for charter
schools, 3.

(g) "Report on Compliance With Requirements Applicable to Each Major
Program and Internal Control Over Compliance in Accordance With OMB
Circular A-133" means the component of the Other Independent Auditor's
Reports that states whether the auditee has complied with federal laws,
regulations, and the provisions of federal contracts or grant agreements
and has established and maintained effective internal control over
compliance with the requirements for major federal programs.

(h) "Schedule of Average Daily Attendance" means the schedule in the
Supplementary Information section that displays Average Daily Attendance
data for both the Second Period and Annual reports, by grade level and
program as appropriate.

(i) "Schedule of Charter Schools" means the schedule in the Supplementary
Information section that lists all charter schools chartered by the school
district or county office of education, and displays information for each
charter school on whether or not the charter school is included in the
school district or county office of education audit.

(j) "Schedule of Financial Trends and Analysis" means, for fiscal year
2003-04, the schedule in the Supplementary Information section that
displays information regarding the auditee's financial position and going
concern status, in the form of actual financial and attendance figures for
at least the most recent three-year period (ending with the audit year),
plus the current year's budget, for the following items: General Fund
financial activity, including total revenue, expenditures, and other
sources and uses; General Fund balance; available reserve balances (funds
designated for economic uncertainty, and any other remaining undesignated
fund balance) within the General Fund, Special Reserve Fund, and any
Article XIII-B Trust Funds; available reserve balances expressed as a
percentage of total General Fund outgo (expenditures, transfers out, and
other uses), including a comparison to the applicable state-recommended
available reserve percentage; total long-term debt; and elementary and
secondary Second Principal Average Daily Attendance, excluding Regional
Occupational Centers and Programs and Adult Average Daily Attendance; and,
when the auditee's percentage of available reserves to total General Fund
outgo is below the state-recommended percentage, management's plans for
increasing the auditee's available reserve percentage.

(k) "Schedule of Financial Trends and Analysis" means, for fiscal year
2004-05 and each fiscal year thereafter, the schedule in the Supplementary
Information section that displays information regarding the auditee's
financial position and going concern status, in the form of actual
financial and attendance figures for at least the most recent three-year
period (ending with the audit year), plus the current year's budget, for
the following items: General Fund financial activity, including total
revenue, expenditures, and other sources and uses; General Fund balance;
available reserve balances (funds designated for economic uncertainty, and
any other remaining undesignated fund balance) within the General Fund or
Special Reserve Fund; available reserve balances expressed as a percentage
of total General Fund outgo (expenditures, transfers out, and other uses),
including a comparison to the applicable state-recommended available
reserve percentage; total long-term debt; and elementary and secondary
Second Principal Average Daily Attendance, excluding Regional Occupational
Centers and Programs and Adult Average Daily Attendance; and, when the
auditee's percentage of available reserves to total General Fund outgo is
below the state-recommended percentage, management's plans for increasing
the auditee's available reserve percentage.

(l) "Schedule of Findings and Questioned Costs" means that part of the
Findings and Recommendations section that presents all audit year
findings, and a copy of each management letter issued, if any, with each
finding assigned the appropriate code from among the following: 10000
Attendance, 20000 Inventory of Equipment, 30000 Internal Control, 40000
State Compliance, 41000 CalSTRS, 50000 Federal Compliance, 60000
Miscellaneous, 70000 Instructional Materials, 71000 Teacher
Misassignments, 72000 School Accountability Report Card, and includes the
following elements:

(1) criteria

(2) condition

(3) effect

(4) cause

(5) a statement of the number of units of Average Daily Attendance,
if any, that were inappropriately reported for apportionment; and a
statement consistent with its basis of funding, for any other
inappropriately reported claim-such as number of staff development
days, or number of pupils for Class Size Reduction, or amount in
dollars for Instructional Materials, and so forth

(6) a recommendation for the resolution of the finding

(7) a corrective action plan prepared by the auditee that describes
in specific terms the actions planned or taken to correct the
problem, or a statement from the auditee that the corrective action
recommended by the auditor is not necessary or appropriate and
giving the specific reasons why, if that is the case, and a
statement that the corrective action plan was not available if no
corrective action plan was submitted before the audit was prepared.

(m) "Schedule of Instructional Time" means a schedule in the Supplementary
Information section that displays, for school districts, including basic
aid districts, and county offices of education, data that show whether the
auditee complied with the provisions of Article 8 (commencing with Section
46200) of Chapter 2 of Part 26 of the Education Code; and for charter
schools, data that show whether the auditee complied with the provisions
of subdivision (a)(1) of Education Code Section 47612.5 and subdivision
(a)(3) of Education Code Section 46201.

(n) "Schedule of Prior Audit Findings" means that part of the Findings and
Recommendations section that presents the status of actions taken by the
auditee on each of the findings and recommendations reported in the prior
year audit, and includes as current year findings and recommendations
those prior year findings that have not been resolved.

Note: Authority cited: Section 14502.1, Education Code.
Reference: Sections 14501, 14502.1, 14503, 41020 and 47634.2,
Education Code.

HISTORY

1. New section filed 3-15-2004 as an emergency; operative 3-15-2004
(Register
2004, No. 12). A Certificate of Compliance must be transmitted to OAL by
7-
13-2004 or emergency language will be repealed by operation of law on the
following day.

2. Certificate of Compliance as to 3-15-2004 order transmitted to OAL
5-6-2004
and filed 6-23-2004 (Register 2004, No. 26).

3. Certificate of Compliance as to 2-17-2006 order, including renumbering
of
section 19816 to section 19814 and renumbering and amendment of section
19814
to section 19816, transmitted to OAL 4-27-2006 and filed 6-9-2006
(Register
2006, No. 23).

4. New subsections (b)-(b)(5), subsection relettering, amendment of newly
designated subsections (e) and (f)(2), new subsection (f)(4) and amendment
of
newly designated subsection (l) filed 6-12-2006 as an emergency; operative
6-
12-2006 (Register 2006, No. 24). A Certificate of Compliance must be
transmitted to OAL by 10-10-2006 or emergency language will be repealed by
operation of law on the following day.

5. Certificate of Compliance as to 6-12-2006 order transmitted to OAL
9-20-2006
and filed 9-29-2006 (Register 2006, No. 39).

5 CCR s 19816, 5 CA ADC s 19816
1CAC

5 CA ADC s 19816

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