(1) The authority shall require the following as conditions for receiving assistance from any fund administered by the authority for infrastructure proj ects related to water and wastewater service: (a) Establishment and use of a financial accounting system that accounts for the operations of water treatment and distribution separately from all other operations of the applicant; (b) Establishment of servic e rates based upon the cost of providing the service; and (c) An agreement that the authority may require an audit to be conducted of the applicant at least once every two (2) years. (2) The authority shall require all applicants within a class to use the same accounting system. The authority may accept present accounting systems in use and applied uniformly to all applicants within a class, for example, the uniform system of accounts established by the National Association of Regulatory Utility Commissioners. (3) The authority may assist water providers to establish accounting systems that meet the requirements of this section. The authority may provide assistance by paying for third-party private contractors or assistance from the Kentucky Auditor of Publi c Accounts. (4) The authority may pay for costs related to establishing a new uniform accounting system for the use of governmental agencies that merge or consolidate their water services if: (a) The merging or consolidating entities use different accounting systems; and (b) The merger or consolidation is consistent with a water management planning council plan as reviewed and prioritized under KRS 151.607.
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