If you have gross revenues from one or more regional centers you must get a financial audit from an independent CPA, and must be done in accordance with the American Institute of Certified Public Accountants. This means they’ll look at your accounting practices and methods, and your procedures for recoding, classifying, and summarizing transactions and accumulating information. If yours is a nonprofit you should already be doing annual independent financial audits. As a result, you wouldn’t be required to do another. You can turn in that one.
If you have gross revenues from one or more regional centers between 250,000 and 500,000 (remember excluding room and board payments and no P&I), you are not required to do a financial audit. Instead you are required to get a financial review. This is a less cumbersome (and cheaper) process.
Now there is an interesting issue surrounding this mandate. There is no legal requirement for when the audits must be completed. By this we mean there are no timelines for completion. This means that a Regional Center cannot cite you for failing to get an audit done on time – there is no time requirement. We appreciate this will be a contentious issue because RC’s will attempt to give us deadlines. However, these deadlines are not enforceable and they cannot penalize us for failing to comply.
If you have any thoughts or questions please don't hesitate to throw them back. If you have a question, I'd bet at least 30 other people are thinking the same thing so get back to us.
Since we're talking about XB/SB74 trailer bill language, there is a section that now requires negotiated rate programs (if you are funded under the ARM rate structure, you are not negotiated rate) to spend at least 85% of funding on direct service expenditures. If more information on this is of interest to you, please let us know.