SECTION 525.5. Audit Exemption

(a) A district may elect to file an annual financial statement as of August 31 of each year in lieu of the district's compliance with §525.3 of this subchapter (relating to Duty to Audit) provided:

(1) the district had no long term (more than one year) liabilities outstanding during the biennial period other than rent/lease contracts;

(2) the district did not have gross state revenues in excess of $75,000.00 in any year of the biennial period;

(3) the district's State Fund cash, receivables, and short term investments balances were not in excess of $50,000 in any year of the biennial period;

(4) the district is not otherwise required to have its accounts and records audited in compliance with a funding agreement with any federal, county, or other agency; and

(5) the district is not otherwise required at the discretion of the State Board to have its accounts and records audited under Agriculture Code of Texas, §201.080, Records, Reports, Accounts, and Audits.

(b) A district may elect to file a compilation and review with required procedures as of August 31 of each year in lieu of the district's compliance with §525.3 of this subchapter provided:

(1) the district has no more than one long term (more than one year) liabilities outstanding during the biennial period other than rent/lease contracts and that the one liability consists of real property utilized by the district as its primary office location;

(2) the district did not have gross state revenues in excess of $250,000.00 in any year of the biennial period;

(3) the district's State Fund cash, receivables, and short term investments balances were not in excess of $50,000 in any year of the biennial period;

(4) the district is not otherwise required to have its accounts and records audited in compliance with a funding agreement with any federal, county, or other agency;

(5) the district is not otherwise required at the discretion of the State Board to have its accounts and records audited under Agriculture Code of Texas, §201.080, Records, Reports, Accounts, and Audits; and

(6) the person who performs a compilation and review shall be a certified public accountant or public accountant holding a permit from the Texas State Board of Public Accountancy.

(c) The annual financial statement, compilation and review, or audit must be reviewed and approved by the district directors and so recorded in the minutes of the board meeting at which such action was taken.

(d) The annual financial statement, compilation and review, or audit must be accompanied by an original affidavit signed by the district's current chairman, vice chairman, and secretary attesting to the accuracy and authenticity of the financial report.

(e) Districts governed by this section are subject to periodic audits by the State Board.

Source Note: The provisions of this §525.5 adopted to be effective January 27, 2005, 29 TexReg 11988; amended to be effective January 6, 2010, 35 TexReg 106; amended to be effective February 7, 2019, 44 TexReg 481