Tenn. Code Ann. § 71-3-506

Any child care agency, as defined in this part, that is under the direct management or control of an administrative department of the state, a county, municipality, or development district, or any combination of these, shall be subject to licensure pursuant to this part; provided, however, that the requirements for audits set forth in former § 71-3-502(j)(6)(C) and (D) [repealed] shall be satisfied by audits that are conducted by the comptroller of the treasury or other public agency auditors.