Service Provider Independent Audits and Reviews

Under current law, service providers who are paid an amount more than or equal to $500,000 but less than $2 million in the vendor’s fiscal year from regional center payments shall be required to obtain an independent review conducted by a CPA firm. Providers that are paid by regional centers an amount equal to or more than $2 million shall obtain an independent audit of its financial statements.  Please review the DDS memo to learn more and determine if your organization requires an audit or review.

A vendor subject to the independent audit or review requirements shall provide copies of the report and accompanying management letters. to the vendoring regional centers within nine months of the end of the vendor’s fiscal year.

If your agency meets the requirements to have an independent audit or review, please submit an electronic or scanned copy of your audit and management recommendation letter (if any) by clicking here.

Exemption – An entity required to obtain an independent audit of its financial statements pursuant to subparagraph (B) of paragraph (1) of subdivision (a) may apply to the regional center for an exemption from the independent audit requirement, subject to both of the following conditions:

(A) If the independent audit for the prior year resulted in an unmodified opinion or an unmodified opinion with additional communication, the regional center shall grant the entity a two-year exemption.

(B) If the independent audit for the prior year resulted in a qualified opinion and the issues are not material, the regional center shall grant the entity a two-year exemption. The entity and the regional center shall continue to address issues raised in this independent audit, regardless of whether the exemption is granted.

Click on the Audit/Review Exemption Request form link below, download, complete and sign the exemption form and click here to email the request. 

Details on acceptable Independent CPA Audit/Review:

• Must be conducted by a qualified actively licensed Certified Public Accountant with the attestation requirement met to issue such reports in California.
• Must be submitted to the Regional Center within 9 months after the vendor’s fiscal year end, submission must be verifiable and dated. ACRC has a designated email inbox of: Service-provider-audits@altaregional.org.
• Must cover for the Entity’s fiscal year (e.g: December 31, 2024 or June 30, 2025 or, or anything in between that would fall before the upcoming QIP requirement deadlines, and the following June 20XX or Dec 20XX.)
• Audit reports must be in accordance with American Institute of CPA (AICPA) and Financial Accounting Standards Board (FASB) guidelines. For such guidelines, refer to the AICPA (https://www.aicpa-cima.com/home), FASB (https://www.fasb.org/), or your contracted independent CPA Auditor.
• Must comply with Sections 4652.5 and 4629.7 of the Welfare and Institutions Code.