N.Y. Public Authorities Law § 2802: Independent audits and audit reports of authorities

§ 2802. Independent audits and audit reports of authorities. 1. State

authorities. Every state authority or commission heretofore or hereafter

continued or created by this chapter or any other chapter of the laws of

the state of New York shall submit to the governor, chairman and ranking

minority member of the senate finance committee, chairman and ranking

minority member of the assembly ways and means committee, each chair and

ranking member of the senate and assembly committees on corporations,

authorities and commissions, the state comptroller, and the authorities

budget office, together with the report described in section

twenty-eight hundred of this title, a copy of the annual independent

audit report, performed by a certified public accounting firm in

accordance with generally accepted auditing standards as defined in

subdivision eleven of section two of the state finance law, and

management letter and any other external examination of the books and

accounts of such authority other than copies of the reports of any

examinations made by the state comptroller.

2. Local authorities. For the local authority fiscal year ending on or

after December thirty-first, two thousand seven and annually thereafter,

every local authority heretofore or hereafter continued or created by

this chapter or any other chapter of the laws of the state of New York

shall submit to the chief executive officer, the chief fiscal officer,

the chairperson of the legislative body of the local government or local

governments and the authorities budget office, together with the report

described in section twenty-eight hundred of this title, a copy of the

annual independent audit report, performed by a certified public

accounting firm in accordance with generally accepted auditing standards

as defined in subdivision eleven of section two of the state finance

law, and management letter and any other external examination of the

books and accounts of such authority other than copies of the reports of

any examinations made by the state comptroller.

3. Each certified independent public accounting firm that performs for

any state or local authority any audit required by this chapter shall

timely report to the audit committee of such authority: (a) all critical

accounting policies and practices to be used; (b) all alternative

treatments of financial information within generally accepted accounting

principles that have been discussed with management officials of such

authority, ramifications of the use of such alternative disclosures and

treatments, and the treatment preferred by the certified independent

public accounting firm; and (c) other material written communications

between the certified independent public accounting firm and the

management of such authority, such as the management letter along with

management's response or plan of corrective action, material corrections

identified or schedule of unadjusted differences, where applicable.

4. Notwithstanding any other provision of law to the contrary, the

certified independent public accounting firm providing such authority's

annual independent audit will be prohibited in providing audit services

to the respective authority if the lead (or coordinating) audit partner

(having primary responsibility for the audit), or the audit partner

responsible for reviewing the audit, has performed audit services for

that issuer in each of the five previous fiscal years of such authority.

5. The certified independent public accounting firm performing such

authority's audit shall be prohibited from performing any non-audit

services to such authority contemporaneously with the audit, unless

receiving previous written approval by the audit committee including:

(a) bookkeeping or other services related to the accounting records or

financial statements of such authority; (b) financial information

systems design and implementation; (c) appraisal or valuation services,

fairness opinions, or contribution-in-kind reports; (d) actuarial

services; (e) internal audit outsourcing services; (f) management

functions or human services; (g) broker or dealer, investment advisor,

or investment banking services; and (h) legal services and expert

services unrelated to the audit.

6. It shall be prohibited for any certified independent public

accounting firm to perform for such authority any audit service if the

chief executive officer, comptroller, chief financial officer, chief

accounting officer, or any other person serving in an equivalent

position for such authority, was employed by that certified independent

public accounting firm and participated in any capacity in the audit of

such authority during the one year period preceding the date of the

initiation of the audit.

7. Notwithstanding any provision of law to the contrary, a public

authority may exempt information from disclosure or report, if the

counsel of such authority deems that such information is covered by

subdivision two of section eighty-seven of the public officers law.