Cal. Education Code § 43523

(a) For 2021–22 fiscal year audits, the Controller shall include instructions in the audit guide required by Section 14502.1 that include procedures for determining both of the following for local educational agencies that receive apportionments under Section 43521: (1) Compliance with clause (iii) of subparagraph (B) of paragraph (2) of subdivision (c) of Section 43521. (2) Compliance with subdivisions (c), (d), and (e) of Section 43522. (b) (1) For a local educational agency with audit findings of noncompliance pursuant to subdivision (c) of Section 43522, the Superintendent shall withhold from the local educational agency’s principal apportionment an amount equal to the amount of expenditures from state funds that are noncompliant pursuant to subdivision (c) of Section 43522. (2) For a local educational agency with audit findings of noncompliance pursuant to subdivision (d) of Section 43522, the Superintendent shall withhold from the local educational agency’s principal apportionment an amount equal to the amount of expenditures from state funds that are noncompliant pursuant to subdivision (d) of Section 43522. (c) Local educational agencies receiving apportionments under Section 43521 shall report final expenditures of those apportioned funds to the department in accordance with paragraphs (1) to (4), inclusive. A local educational agency that does not submit an expenditure report shall forfeit all respective funds apportioned pursuant to subdivision (b) or (c) of Section 43521. The Superintendent shall initiate collection proceedings for unexpended funds or forfeited amounts, and may withhold the unexpended or forfeited amounts from the local educational agency’s principal apportionment. Final expenditures shall be reported to the department as follows: (1) On or before January 31, 2025, final expenditures of state funds received pursuant to subdivision (b) of Section 43521. (2) On or before December 1, 2024, final expenditures of state funds received pursuant to subdivision (c) of Section 43521. (3) On or before June 30, 2024, final expenditures of federal funds received pursuant to paragraphs (1) and (2) of subdivision (a) of Section 43521, based on the allocation of funds pursuant to subdivision (b) of Section 43521. (4) On or before July 31, 2026, final expenditures of federal funds received pursuant to paragraphs (3) and (4) of subdivision (a) of Section 43521, based on the allocation of funds pursuant to subdivision (b) of Section 43521.