Ed. Code, § 14503

Financial and compliance audits shall be performed in accordance with the generally accepted government auditing standards promulgated by the United States Government Accountability Office for financial and compliance audits and in accordance with the filing deadlines established pursuant to Sections 41020 and 41020.2. The audit guide prepared by the Controller shall be used in the performance of these audits until an audit guide is adopted by the Education Audit Appeals Panel pursuant to Section 14502.1. When an audit guide is adopted by that panel, the adopted audit guide shall be used in the performance of these audits. Every audit report shall specifically and separately address each of the state program compliance requirements included in the audit guide, stating whether or not the local educational agency is in compliance with those requirements. For each state program compliance requirement included in the audit guide, every audit report shall further state that the suggested audit procedures included in the audit guide for that requirement were followed in the making of the audit, if that is the case, or, if not, what other procedures were followed. If a local educational agency is not in compliance with a requirement that is a condition of eligibility for the receipt of state funds, the audit report shall include a statement of the number of units of average daily attendance, if any, that were inappropriately reported for apportionment.