Local Educational Agency Annual AuditsResources for external auditors and local educational agency (LEA) personnel for completing the annual financial and compliance audits pursuant to Education Code Section 41020.
All LEAs are required to have an annual audit completed by an independent auditor registered with the State Controller’s Office (SCO), pursuant to Education Code (EC) Section 41020 . The purpose of these annual audits is to promote accountability over public educational funding and encourage effective and efficient use of state funds for the children of California. Further, the annual audits are designed to encourage sound fiscal management and strengthen fiscal accountability at the LEA, county, and state level.
The audit reports should be completed in compliance with the K–12 LEA Annual Audit Guide (Audit Guide). The Audit Guide is updated every year by the SCO and submitted to the Education Audits Appeal Panel (EAAP) as described in EC 14502.1 to provide audit steps, reporting requirements, and audit guidance for LEA audits. The California Department of Education (CDE) provides guidance to LEAs and external stakeholders, provides consultation on the audit guide content, reviews annual audit reports, and ensures certain audit findings are resolved.
- Process & Key Dates
- Audit Resources
- Submit Audit Reports & File Extensions
- Audit Resolution
Process & Key Dates
EC 41020 requires each LEA to complete an annual audit. The annual audit report should be completed in compliance with the Audit Guide and filed with the California Department of Education, State Controller’s Office, and the County Superintendent of Schools of the county in which the LEA is located. This section provides statutory requirements and key dates for the K–12 LEA annual financial and compliance audit.
Annual Audit Process
This section provides a general overview of statutory requirements for annual audits. The audit process involves multiple entities that participate in the development of the audit guide and supplemental audit guide, audit report, audit report review process, and resolution process. For complete information about each participant in the audit process, visit each entity’s website. For the full text of statutory requirements related to the annual audit, see EC sections 14500-14509 and EC sections 41344-41344.1 .
|Audit Process Participants
State Controller’s Office (SCO)
Education Audit Appeals Panel (EAAP)
California Department of Education (CDE)
County Office of Education (COE)
Local Education Agency (LEA)
Department of Finance
Key Dates for Annual Audit
The following table identifies key dates within the LEA annual financial and compliance audit process.
|Annual Audit Key Process
|Education Code Section
Audit Guide – Adopted and issued by the EAAP
July 1, 2022
|July 1, 2023
Supplemental Audit Guide – Adopted and issued by the EAAP
March 1, 2023
|March 1, 2024
LEA deadline to contract with independent auditor
April 1, 2023
|April 1, 2024
County Office of Education (COE) contracts with independent auditor, if LEA has not done so by April 1
May 1, 2023
|May 1, 2024
Audit Report filed with the California Department of Education, State Controller’s Office, and County Superintendent of Schools
December 15, 2023
|December 15, 2024
School Board review of audit report and corrective actions
January 31, 2024
|January 31, 2025
LEA corrective actions submitted to COE
March 15, 2024
|March 15, 2025
COE Certifications to CDE and SCO
May 15, 2024
|May 15, 2025
Resources for external auditors and LEAs to complete the annual audit. This section includes audit guidance, directories, and penalty calculations.
The Audit Guide provides information on the audit report components and audit procedures for the annual audit as required in EC 41020. The Supplemental Audit Guide incorporates legislative changes to the programs audited. The Audit Guide is adopted and issued by the EAAP by July 1 of the fiscal year to be audited and the Supplemental Audit Guide is adopted and issued by March 1 of the audit year pursuant to EC 14502.1.
Certified Public Accountants (CPA) Directory
The CPA Directory, published by the SCO, allows users to view a list of CPAs currently designated as active by SCO and who can perform the annual audit.
California School Directory
Perform a search of California’s public schools, private schools (including nonpublic nonsectarian schools), school districts, and county offices of education by accessing CDE's school directory.
Local Educational Agencies (LEA) Audit Advisories
LEA advisories are issued annually by the SCO to provide guidance and assist independent auditors in performing the annual audit. The LEA advisories may include annual audit procedural changes, Governmental Accounting Standards Board (GASB) updates, Single Audit updates, state compliance updates, and any other relevant annual audit updates.
Penalty Calculators: Estimating the Cost of an Audit Finding
LEA penalty calculators are used to calculate the estimated cost of an audit finding for Local Control Funding Formula Unduplicated Pupil Counts, K–3 Grade Span Adjustments, Instructional Time audit findings, Transitional Kindergarten, and Expanded Learning Opportunities Program. The derived value of Average Daily Attendance (ADA) is provided by fiscal year as it is a required input to calculate instructional time penalties. The derived value methodology is provided by fiscal year as a reference.
Information and resources for three major compliance sections of the Guide for Annual Audits of K-12 Local Educational Agencies and State Compliance Reporting (Audit Guide) – Financial, State, and Federal.
California School Accounting Manual (CSAM)
The CSAM, approved by the California State Board of Education, provides guidance for accounting policies, including guidance for revenue and expenditure transactions.
Governmental Accounting Standards (GAS) Resources
Resources for GAS guidance including implementation issues for LEAs Governmental Accounting Standards Board (GASB) statements, helpful links, and GASB 34 frequently asked questions.
Audit Resources – State Compliance
Resources for completing the State compliance requirements of the Audit Guide. This section includes penalty calculators, derived value of Average Daily Attendance and related methodologies by fiscal year, and audit resources for each program in the Audit Guide.
Audit Resources – Federal Compliance
Resources for completing the federal compliance requirements of the Audit Guide. This section includes information on federal programs, Assistance Listings webpage, interest calculations on federal funds, and federal resource manuals.
Submit Audit Reports & File Extensions
Annual audit reports must be filed with the CDE, SCO, and the County Superintendent of Schools of the county in which the LEA is located by December 15 pursuant to EC 41020 . A county office of education (COE) may request an audit extension for a school district under their jurisdiction by December 15 to file the annual audit report after the deadline per EC 41020.2 .
Submit Audit Reports
The annual audit report must be filed by December 15 annually with the CDE, SCO, the COE, and if applicable, the chartering entity.
For the CDE audit report submissions, the audit report must be submitted to the CDE using the following criteria:
- Electronic format, unsecured PDF file format preferred
- Independent auditor’s electronic signature
- Submitted electronically via exFiles File Transfer System
For information on submitting audit reports to the SCO, please visit the SCO webpage .
For information on submitting audit reports to COEs, see individual COE websites. If applicable, file with the chartering entity.
exFiles File Transfer System
The exFiles File Transfer System is a web-based file transfer system that can be used to transfer files such as annual audit reports. Instruction packets used to access the exFiles File Transfer System are available upon request. The instruction packet contains the CDE’s exFiles address, project code, and password. Due to security protocol, the CDE cannot provide instructions containing the project code and password by phone.To use the exFiles File Transfer System, contact the CDE to request the exFiles File Transfer System instructions at email@example.com.
When requesting instructions, include the following:
- Firm name
- Attention to
- Phone number
Request an Extension
Pursuant to EC 41020.2(a)(1) , the County Superintendent of Schools may, after consultation with the school district governing board and the auditors under contract to the district, and with the consent of the SCO and the Superintendent of Public Instruction, grant an appropriate extension for the completion of the audit and the filing of the audited financial statements.
The COE must submit an audit report extension request to CDE and SCO by December 15th. The extension request must come from the COE and not the school district.
The state does not grant extensions for charter school audits. The extension must be obtained through the chartering entity (sponsoring school district), and the chartering entity should notify the CDE and the SCO of the extension.
The Audit Resolution tab provides resources to aid LEAs with resolving audit findings reported in the LEAs annual audit. Once an audit finding has been issued, several options are available to resolve an apportionment significant audit finding (ASF). An ASF is equal or greater than one unit of average daily attendance; or a finding that is equal or greater than the dollar value of one unit of average daily attendance for the LEA as identified in EC Section 41341 .
County Office of Education (COE) Certification
Each COE shall submit a Certification of Corrective Action Form (Coming Soon) and certify to the State Superintendent of Public Instruction and State Controller’s Office (SCO) by May 15, pursuant to EC 41020 . The certification states that the county has completed the following:
- Reviewed all annual audits of LEAs under the County Superintendent of Schools’ jurisdiction for the prior fiscal year.
- All audit exceptions that the County Superintendent of Schools was required to review were reviewed.
- All those exceptions required to be reviewed by the county, except as otherwise noted in the certification, have been corrected by the LEA or that an acceptable plan of correction has been submitted to the County Superintendent of Schools.
- Identified any attendance-related audit exceptions or exceptions involving state funds by the LEA and required the LEA to which the audit exceptions were directed to submit appropriate reporting forms for processing by the State Superintendent of Public Instruction.
LEA Annual Audit Status
LEAs may check the certification status of annual audits on the SCO’s LEA Audit Status Report webpage .
Audit Resolution Options
The following options are available for LEAs to resolve apportionment significant audit findings:
- LEAs may submit corrected and revised attendance and unduplicated pupil count changes for audit findings through the Principal Apportionment Data Collection web-based application.
- As a condition of apportionment, LEAs must meet instructional time requirements. The SBE Instructional Time Penalty Waivers web page provides information on the instructional time audit findings, instructional time waiver process, and instructional time waivers.
- LEAs may request a summary review with the EAAP for audit findings on the grounds of substantial compliance.
- LEAs may file a formal appeal with the EAAP for
- LEAs may request a repayment plan from the California Department of Education for any amount owed to the State as the result of an audit finding.
- The process for apportionment significant audit findings if the LEA does not pursue any of the applicable options above.