(1) Accounting requirements:

(a) Deposits. Upon receipt of CAPA funds from the state treasurer, each county shall deposit them in a separate BARS revenue account within the county road fund or in a fund separate from the county road fund. The county engineer shall evaluate the capabilities of the county road fund accounting system and select the method of deposit and related accounting.

(b) Expenditures. Expenditures of these funds shall be solely for CAPA-eligible work and must be separately identified within each county's road fund expenditure reporting system.

(2) Audit provisions. CAPA audits may be conducted by the state auditor's office and will normally be conducted in conjunction with the audits required by RCW 43.09.260 and 36.80.080. Special audits of specific CAPP activities or projects may be accomplished at the request of the county road administration board. The costs of such special audits shall be the responsibility of the county road administration board.

(3) Scope of audits. The audit of any CAPP project or activity shall include, but not be limited to, the review of the county's compliance with:

(a) The provisions of the enabling legislation; and

(b) The rules in Title 136 WAC regarding implementation and administration, with detailed review of the application of CAPA funds and the various reporting requirements. The audit shall also include a review of the financial accounting and reporting of all CAPA funds.

(4) Noncompliance, questioned costs, and post-audit penalty. If the audit of a CAPP activity or project reveals any area of noncompliance and/or questioned costs, then such exceptions shall be subject to comment by the examiner within the audit report. In the event an exception has been noted within the audit report, it shall be the duty of the county road administration board to evaluate the noted discrepancy. Discrepancies may be cause for the county road administration board to order the payback of any CAPA funds that have been expended on ineligible activities and/or withdrawal or denial of the certificate of good practice of the county in question as provided in chapter 136-04 WAC.