SECTIONS 33420-33421 - California Statutes

EDUCATION CODE

SECTION 33420-33421

33420. (a) The Superintendent of Public Instruction, in cooperation
with the Department of Finance and the State Auditor, shall, on or
before July 1, 1980, provide for a plan for independent audits of
state and federal funds allocated to private agencies that are under
contract with the State Department of Education for the provision of
educational services.
For the purpose of this article, "educational services" includes,
but is not limited to, child nutrition and child development
services.
To the maximum extent possible, the plan shall conform to audit
procedures pursuant to Section 41020.5.
(b) Effective July 1, 1980, the State Department of Education, as
a condition to any contract with a private agency for the provision
of educational services, shall require a periodic audit of state and
federal funds to be conducted by departmental staff auditors or a
certified public accountant or public accountant who is licensed by
the California Board of Accountancy. For child development services,
the audit shall include all funds deposited in the child development
fund. For all other educational services, the audit shall be limited
to those state and federal funds accruing to the private agency as a
result of its contract with the State Department of Education.
(c) If in the course of those audits of a private agency, an audit
exception is reported by the certified public accounting firm in
excess of a material amount as determined by the Superintendent of
Public Instruction, the Superintendent of Public Instruction shall,
upon final determination by the superintendent of the amount of the
audit exception, collect that audit exception and redistribute the
amount collected to the same class of program, or withhold the amount
of the audit exception from the next payment to the agency in which
the audit exception was discovered.
(d) The State Department of Education shall establish a schedule
for audits that meets federal regulations.
(e) The State Department of Education may exempt from the
provisions of this section those agencies for which, in the
department's estimation, the cost of an audit would be inordinate in
relation to the level of funding received by the private agency for
the educational services provided.

33421. Every private agency which receives state funds which may be
audited pursuant to Section 33420 shall, at the request of the
Superintendent of Public Instruction, make all records pertaining to
its state-funded programs available to the Department of Education
during regular business hours. The records shall be retained by each
private agency for at least five years except for Child Nutrition
Program records. Child Nutrition Program records shall be retained in
accordance with regulations adopted by the United States Department
of Agriculture relating to the retention of those records. However,
in cases where an audit has been requested by a state agency or the
United States Department of Agriculture which remains unresolved, the
records shall be retained until the date the audit is resolved.