(a) the "schedule of state transportation assistance expended";

(b) compliance with applicable state laws, rules, regulations and contract provisions in the administration of state transportation funded programs, projects, contracts and grants administered by the department; and

(c) the adequacy of internal controls in administering such funds in conformance with state laws, rules, regulations and contract provisions. 2. For the purposes of this section, the term "fiscal year" shall mean the regular annual accounting period of the municipality or public authority; and the term "government auditing standards" shall mean those standards prescribed by the comptroller general of the United States. 3. The commissioner shall promulgate rules and regulations for the implementation of this section. Such rules and regulations shall include, but shall not be limited to, audit compliance requirements for specified programs administered by the department, audit report submission requirements, the acceptance criteria for audit reports, and any information needed by the commissioner to complete the reports required by subdivision six of this section. Audit reports under this section shall be due for each fiscal year beginning after December thirty-first, two thousand. 4. Additional expenses incurred by a municipality or public authority in connection with audits performed under this section may be chargeable as an indirect cost to the state program, project, grant, contract or agreement where otherwise allowable and to the extent funds are provided for such purposes. 5. The commissioner, insofar as the commissioner deems practicable, shall not impose any additional audit requirements in the department's administration of state transportation programs, projects, grants, contracts and agreements upon municipalities and public authorities which provide both the federal single audit and the state audit in accordance with subdivision one of this section. This section shall not supersede the authority of the state comptroller to conduct audits. 6. The commissioner shall annually report to the governor, the temporary president of the senate and the speaker of the assembly on the benefits and costs of the implementation of this section by the thirty-first of October, beginning in the year two thousand nineteen.