Principles and standards for audit reports

(a) The audit report prepared by an independent auditor, as defined in section 7-391, retained to render an audit for a municipality, regional school district or audited agency, or by any fiscal officer of such municipality, regional school district or audited agency shall be prepared in accordance with generally accepted accounting principles, generally accepted auditing standards and the provisions of sections 4-230 to 4-236, inclusive. (b) Any municipality, regional school district or audited agency may, however, on the basis of unreasonable hardship directly related to compliance with the provisions of subsection (a) of this section, request permission to have the audit report prepared in a manner not in compliance with said provisions by filing such request in writing with the Secretary of the Office of Policy and Management, including an explanation of the problems related to such compliance and an estimate of the time required to implement changes in existing procedures as necessary to prepare the audit report in accordance with said provisions. (c) The Secretary of the Office of Policy and Management shall adopt regulations as necessary to establish guidelines concerning compliance with the provisions of subsection (a) of this section and concerning any special problems related to such compliance by any municipality, regional school district or audited agency. Such regulations shall, prior to adoption, be submitted to the Municipal Finance Advisory Commission for review as provided in section 7-394b. (d) Notwithstanding the provisions of section 7-396a, any agreement for a grant entered into on or after July 1, 1987, between a state agency and a municipality, regional school district or audited agency which has adopted the uniform fiscal year pursuant to section 7-382, or any of the agencies of such municipality, shall provide that any audit of grant expenditures required by such agreement shall be prepared by the municipality, regional school district or audited agency, in accordance with this section and section 7-382.