§ 2802. Independent audits and audit reports of authorities. 1. State
authorities. Every state authority or commission heretofore or hereafter
continued or created by this chapter or any other chapter of the laws of
the state of New York shall submit to the governor, chairman and ranking
minority member of the senate finance committee, chairman and ranking
minority member of the assembly ways and means committee, each chair and
ranking member of the senate and assembly committees on corporations,
authorities and commissions, the state comptroller, and the authorities
budget office, together with the report described in section
twenty-eight hundred of this title, a copy of the annual independent
audit report, performed by a certified public accounting firm in
accordance with generally accepted auditing standards as defined in
subdivision eleven of section two of the state finance law, and
management letter and any other external examination of the books and
accounts of such authority other than copies of the reports of any
examinations made by the state comptroller.

2. Local authorities. For the local authority fiscal year ending on or
after December thirty-first, two thousand seven and annually thereafter,
every local authority heretofore or hereafter continued or created by
this chapter or any other chapter of the laws of the state of New York
shall submit to the chief executive officer, the chief fiscal officer,
the chairperson of the legislative body of the local government or local
governments and the authorities budget office, together with the report
described in section twenty-eight hundred of this title, a copy of the
annual independent audit report, performed by a certified public
accounting firm in accordance with generally accepted auditing standards
as defined in subdivision eleven of section two of the state finance
law, and management letter and any other external examination of the
books and accounts of such authority other than copies of the reports of
any examinations made by the state comptroller.

3. Each certified independent public accounting firm that performs for
any state or local authority any audit required by this chapter shall
timely report to the audit committee of such authority: (a) all critical
accounting policies and practices to be used; (b) all alternative
treatments of financial information within generally accepted accounting
principles that have been discussed with management officials of such
authority, ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the certified independent
public accounting firm; and (c) other material written communications
between the certified independent public accounting firm and the
management of such authority, such as the management letter along with
management's response or plan of corrective action, material corrections
identified or schedule of unadjusted differences, where applicable.

4. Notwithstanding any other provision of law to the contrary, the
certified independent public accounting firm providing such authority's
annual independent audit will be prohibited in providing audit services
to the respective authority if the lead (or coordinating) audit partner
(having primary responsibility for the audit), or the audit partner
responsible for reviewing the audit, has performed audit services for
that issuer in each of the five previous fiscal years of such authority.

5. The certified independent public accounting firm performing such
authority's audit shall be prohibited from performing any non-audit
services to such authority contemporaneously with the audit, unless
receiving previous written approval by the audit committee including:
(a) bookkeeping or other services related to the accounting records or
financial statements of such authority; (b) financial information
systems design and implementation; (c) appraisal or valuation services,
fairness opinions, or contribution-in-kind reports; (d) actuarial
services; (e) internal audit outsourcing services; (f) management
functions or human services; (g) broker or dealer, investment advisor,
or investment banking services; and (h) legal services and expert
services unrelated to the audit.

6. It shall be prohibited for any certified independent public
accounting firm to perform for such authority any audit service if the
chief executive officer, comptroller, chief financial officer, chief
accounting officer, or any other person serving in an equivalent
position for such authority, was employed by that certified independent
public accounting firm and participated in any capacity in the audit of
such authority during the one year period preceding the date of the
initiation of the audit.

7. Notwithstanding any provision of law to the contrary, a public
authority may exempt information from disclosure or report, if the
counsel of such authority deems that such information is covered by
subdivision two of section eighty-seven of the public officers law.