AUDIT EXEMPTION

(a) The district may elect to complete an annual financial report in lieu of an annual audit under Section 375.096(a)(6), Local Government Code, if: (1) the district had no bonds or other long-term (more than one year) liabilities outstanding during the fiscal period; (2) the district did not have gross receipts from operations, loans, taxes, assessments, or contributions in excess of $250,000 during the fiscal period; and (3) the district's cash and temporary investments were not in excess of $250,000 during the fiscal period. (b) Each annual financial report prepared in accordance with this section must be open to public inspection and accompanied by an affidavit signed by a duly authorized representative of the district attesting to the accuracy and authenticity of the financial report. (c) The annual financial report and affidavit shall be substantially similar in form to the annual financial report and affidavit forms prescribed by the executive director of the Texas Commission on Environmental Quality under Section 49.198, Water Code.