Serving Nonprofits. Strengthening West Virginia.

Action Alert: WV Audit Threshold Legislation

By on February 23, 2015 in Advocacy & Policy, News

UPDATE: As of Sunday night (February 22), SB 351 (Increasing the Audit Threshold for Nonprofits from $200K to $500K) was passed by the Senate Judiciary Committee and is now on to the full Senate for review and approval this week.  The House version of the bill HB2716 is pending in the House Finance Committee. We invite you to contact your members in the WV Senate to vote in support of the bill and also if you have contacts on the WV House Finance Committee membership to encourage the committee to take up the bill. 

capitolWith the WV Legislature passing the halfway mark of its 2015 60-Day Session, it is moving at a hectic pace.  For those of us in the nonprofit and foundation realm, it is critical that we have a seat at the table, for if we don’t we might be on the menu. We are keeping an eye through our policy advocacy and education roles on issues that are of concern to the foundation and nonprofit community.

As adopted by the Joint Public Policy & Advocacy Committee of the WV Nonprofit Association and Philanthropy WV, the top legislative priority this session is increasing the Audit Threshold for nonprofits from $200,000 to $500,000 (income excluding government and private foundation grants), but still require accountability and transparency through an annual financial review for those in the $200K-$500K range.

The WV Secretary of State’s Office has two bills on this issue including in the WV Senate (SB 351) and the WV House of Delegates (HB2716).  Currently, HB 2716 was referred to House Finance Committee and SB 351 is pending in the Senate Judiciary Committee.

We have been in contact with the leadership and staff of both committees to advocate for their review, committee approval, and passage to the full body’s approval.  The SB351 was reviewed in the Senate Judiciary Committee Sunday, February 22, 2015 and we are waiting on word for the status of HB2716’s review.

You can help by advocating for the bill’s movement by contacting members of the WV House Finance Committee Leadership & Members and the WV Senate Judiciary Committee (1) by phone, (2) in-person visits or (3) follow up by email (remember legislators receive over 250 emails a day).  Please see legislative contact information below for each committee to identify members to contact.

House Finance Chairman Delegate Eric Nelson:  http://www.legis.state.wv.us/committees/house/HouseCommittee.cfm?Chart=fin

Senate Judiciary Chairman Senator Charles Trump:  http://www.legis.state.wv.us/committees/senate/SenateCommittee.cfm?Chart=jud


Key Talking Points for this Legislation:

(A)   Increasing the Audit Threshold to $500,000 reduces the administrative costs for smaller nonprofits allowing for them to put more of their financial resources into their programs and communities

(B)    For nonprofits $200K to $500K, the legislation requires as a safeguard upholding the highest standards of ethics and accountability the nonprofits have an independent CPA financial review to safeguard against fraud as well as making sure they have proper accounting/financial practices and procedures in place along with professionals serving on the organization’s board.

(C)    Bringing WV’s nonprofit audit threshold levels up to other states and the national average which is a minimum of $500,000 in annual income

(D)   The WV Secretary of State’s Office will be refining its reporting process upon adoption of this legislation to put into place best practice reporting processes/forms to ensure the utmost transparency and accountability of nonprofits.

On average a nonprofit will spend $5,500 to $10,000 for an annual audit. For those smaller nonprofits, this can in many cases prevent them from delivering programs and services on an already limited budget.  The conversion to an annual financial review for those $200K-$500K can potentially save each at least $4,000 in administrative costs.

The WV Nonprofit Association and Philanthropy WV advocates and supports having the highest level of standards and accountability for nonprofits serving the citizens and communities of West Virginia.

Subscribe

Enter your email address below to receive future updates like this one from WVNPA, including our monthly newsletter, as well as News Briefs and Action Alerts.

Comments are closed.

Top