KRS 147A.117: Contract for audit by certified public accountant or firm instead of the

Auditor of Public Accounts -- Conditions for.

(1) No area development district shall enter into any contract with a certified public

accountant or firm to perform an audi t unless the Auditor of Public Accounts has

declined in writing to perform the audit or has failed to respond within thirty (30)

days of receipt of a written request. The area development district shall furnish the

Auditor of Public Accounts with a comprehensive statement of the scope and nature

of the proposed audit. The actual expense of an audit performed by the Auditor of

Public Accounts shall be billed to the audited area development district.

(2) Any contract with a certified public accountant or firm entered into as a result of the

Auditor of Public Accounts either declining to perform the audit or failing to

respond within thirty (30) days of receipt of a written request for an audit shall

specify the following:

(a) That the certified public accounta nt shall forward a copy of the audit report

and management letters to the Auditor of Public Accounts for review;

(b) That the Auditor of Public Accounts shall have the right to review the

certified public accountant or firm's work papers before and after t he release

of the audit; and

(c) That after review of the certified public accountant or firm's work papers,

should discrepancies be found, the Auditor of Public Accounts shall notify the

audited entity of the discrepancies. If the certified public account ant or firm

does not correct these discrepancies prior to the release of the audit, the

Auditor of Public Accounts may conduct its own audit to verify the findings

of the certified public accountant's report.

(3) If an audit verifying the findings of the certified public accountant or firm's report is

conducted by the Auditor of Public Accounts, the actual expense of the audit shall

be billed to the area development district.