KRS 175B.100: Annual report by state authority -- Annual audit of state authority.

(1) Within ninety (90) days after the expiration of each fiscal year, the state authority

shall make an annual report of its activities for the preceding fiscal year to the

Controller of the Commonwealth within the Finance and Administration Cabinet,

the Transportation Cabinet, and the Legislative Research Commission. The report

shall set forth a complete operating and financial statement covering its operation

during the fiscal year.

(2) (a) The state authority shall cause an audit of its books and accounts to be made

at least once each year.

(b) A request shall be made to the Auditor of Public Accounts for the

performance of an annual audit. If the Auditor of Public Accounts declines in

writing to assume responsibility for performing the audit or fails to resp ond in

writing within thirty (30) days of receiving the request, the state authority may

enter into a contract with a certified public accountant for an audit.

(c) Any contract with a certified public accountant entered into as a result of the

Auditor of P ublic Accounts either declining to assume responsibility of

performing the audit or failing to respond within thirty (30) days of receipt of

a written request for an audit shall specify the following:

1. That the certified public accountant shall forward a copy of the audit

report and management letters to the Auditor of Public Accounts for

review;

2. That the Auditor of Public Accounts may review the certified public

accountant's work papers; and

3. That after review of the certified public accountant's wo rk papers, if

discrepancies are found, the Auditor of Public Accounts shall notify the

authority of the discrepancies. If the certified public accountant 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.

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

conducted by the Auditor of Public Accounts, the total audit expense incurr ed

shall be an allowable expenditure and shall be paid to the Auditor of Public

Accounts. If the audit conducted by the Auditor of Public Accounts discloses

discrepancies in the audit by the certified public accountant, the findings of

the Auditor of Public Accounts shall be deemed official for all purposes.