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

   1. (1) the district had no long term (more than one year) liabilities outstanding during the biennial period other than rent/lease contracts;
   2. (2) the district did not have gross state revenues in excess of $40,000 in any year of the biennial period;
   3. (3) the district's State Fund cash, receivables, and short term investments balances were not in excess of $25,000 in any year of the biennial period; and
   4. (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.
2. (b) A district may elect to file a review with required procedures completed by a certified public accountant as of August 31 of each year in lieu of the district's compliance with §525.3 of this title (relating to Duty to Audit) provided that 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 it's primary office location.
3. (c) The annual financial report 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.
4. (d) The annual financial report must be accompanied by an affidavit signed by the district's current chairman, vice chairman, and secretary attesting to the accuracy and authenticity of the financial report.
5. (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.