Notwithstanding Sections 19801 and 19803, and after the department approves the memorandum of understanding standards, the department may waive administration of all or part of a local agency merit system where administration of merit system standards, including, but not limited to, certification, appointment and other transactions, layoff and reinstatement, position classifications, compensation standards, and disciplinary action are established pursuant to a legally binding memorandum of understanding negotiated between the local agency governing board and an employee organization recognized pursuant to applicable law representing employees engaged in federally supported programs under Section 19800. Upon request of the local agency governing board and the

recognized employee organization, such waivers shall be granted on any or all standards following determination by the department that the provisions of the memorandum of understanding maintain merit system standards to the extent necessary to qualify for federal funds. All merit system standards waivers shall be subject to periodic audit, approval, or revocation by the department. Upon revocation of a waiver, the department may require any additional information as a condition of waiver reinstatement.