The IAC or its designee may conduct financial audits and compliance audits of each LEA that receives State funds. Audit items may include: Transactions and balances reported on financial reports and close-out forms; LEA internal controls and management authorizations; Items ineligible for State participation; and Compliance with 'IAC regulations and IAC policies and procedures. The LEA shall reconcile audit exceptions and back charges to the IAC's or its designee's satisfaction.