(a) If the department, pursuant to rules adopted by the executive commissioner, finds, after an audit conducted under § 12.133 or 12.134, that a political subdivision has overstated unreimbursed health care expenditures in the information submitted under § 12.133 for any year, the department shall report that fact to the comptroller and shall reduce that political subdivision’s percentage of the subsequent annual distribution of the earnings from the account appropriately.
(b) If a monetary penalty is applied under § 12.134, the department shall also reduce the political subdivision’s percentage of the subsequent annual distribution of the earnings from the account appropriately.

(c) If a political subdivision is assessed the cost of an audit under § 12.134, the department shall report the amount assessed to the comptroller, and the comptroller may withhold that amount from the political subdivision’s subsequent annual distribution. The comptroller may use the amount withheld to reimburse the general revenue fund for the cost of the audit.