Cal. EDC § 14505
This is the official text of Cal. EDC § 14505, part of California’s Education Code — governs public schools, community colleges, and universities in California.
Not legal advice. This page reproduces the official text of a government statute for reference only. Laws change, and how a statute applies depends on your specific facts. For advice about your situation, consult a licensed attorney in your state.
Official statutory text
(a) The governing board or body of a local educational agency shall include both of the following provisions in their contracts for audits:
(1) A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of Section 14503.
(2) A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior year’s audit report was not certified as conforming to the reporting provisions of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to the reporting provisions of Section 14503.
(b) If the Controller has not provided a written certification that the audit report has conformed to the reporting provisions of Section 14503 or a written rejection letter detailing the exceptions noted by the Controller’s review with instructions for corrections by the sixth month following the date that the audit is received by the Controller, or the audit due date, whichever is later, the governing board or body of the local educational agency may release the amounts withheld in audit fees pursuant to paragraph (1) of subdivision (a).
(c) Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to the reporting provisions of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The California Board of Accountancy shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following:
(1) Order the Controller to provide notification that the audit report conforms to the reporting provisions of Section 14503.
(2) Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the California Board of Accountancy within one year from the date of filing the appeal.
(d) If the California Board of Accountancy orders the Controller to provide notification pursuant to paragraph (1) of subdivision (c), the Controller shall notify the contracting local educational agency which shall then release the portion of the audit fee being withheld in accordance with this section.
(1) A provision to withhold 10 percent of the audit fee until the Controller certifies that the audit report conforms to the reporting provisions of Section 14503.
(2) A provision to withhold 50 percent of the audit fee for any subsequent year of a multiyear contract if the prior year’s audit report was not certified as conforming to the reporting provisions of Section 14503. This provision shall include a statement that a multiyear contract will be null and void if a firm or individual is declared ineligible pursuant to subdivision (c) of Section 41020.5. The amount withheld is not payable unless payment is ordered by the California Board of Accountancy or the audit report for that subsequent year is certified by the Controller as conforming to the reporting provisions of Section 14503.
(b) If the Controller has not provided a written certification that the audit report has conformed to the reporting provisions of Section 14503 or a written rejection letter detailing the exceptions noted by the Controller’s review with instructions for corrections by the sixth month following the date that the audit is received by the Controller, or the audit due date, whichever is later, the governing board or body of the local educational agency may release the amounts withheld in audit fees pursuant to paragraph (1) of subdivision (a).
(c) Within 30 days from the date of receipt of written notification that the Controller refuses to certify an audit report as conforming to the reporting provisions of Section 14503, an auditor or audit firm having a portion of an audit fee withheld pursuant to these provisions may file an appeal in writing with the California Board of Accountancy. The California Board of Accountancy shall complete an investigation of the appeal within 90 days of the filing date and, on the basis of the investigation, do either of the following:
(1) Order the Controller to provide notification that the audit report conforms to the reporting provisions of Section 14503.
(2) Schedule the appeal for a hearing, in which case the final action on the appeal shall be completed by the California Board of Accountancy within one year from the date of filing the appeal.
(d) If the California Board of Accountancy orders the Controller to provide notification pursuant to paragraph (1) of subdivision (c), the Controller shall notify the contracting local educational agency which shall then release the portion of the audit fee being withheld in accordance with this section.
Status: in_force · Read it on the official government site
Need a lawyer in California?
Find a California lawyer
About this page: Statute text is reproduced from official government publishers via the
Open US Law dataset
(Vaquill AI, snapshot v2026.08, CC BY 4.0). Primary legislative text like this is public domain under the government-edicts doctrine
(Georgia v. Public.Resource.Org, 2020). We link every section back to its official source so you can verify it independently.