The Panel hears formal appeals by local educational agencies (LEAs) of audit findings on the basis of errors of fact or interpretation of law, or of substantial compliance with the law. The Panel hears those appeals pursuant to the adjudicative provisions of the Administrative Procedure Act. The State Controller and the Department of Finance are a party to all appeals, and the Department of Education is authorized to intervene as a party of any appeal.

The right to a formal appeal to the Panel is independent of the summary review process. If an LEA is dissatisfied with the outcome of a summary review and chooses to pursue a formal appeal, the formal appeal is de novo, as if the summary review had never taken place.