Financial Audits

California Welfare and Institutions Code section 4652.5 requires regional center service providers to submit independent financial reviews or audits based on their annual funding levels.

📚Financial Review and Audit Thresholds:

• $500,000 to $1,999,999: Providers receiving this amount from regional centers in a state fiscal year must submit an independent review report.

• $2,000,000 or more: Providers receiving this amount or more must submit a full independent audit.

• Work Activity Programs: Specific rules apply to work activity program providers receiving under $500,000.

📌Key Compliance Rules:

• Deadlines: Reports and management letters must be given to the vendoring regional center within nine months after the end of the provider's fiscal year.

• Exemptions: The rule does not apply to government agencies, the University of California, the California State University, or payments made using standard "usual and customary" rates. Two-year exemptions are available for entities meeting clean or non-material prior-opinion criteria. A two-year exemption letter will be issued by SDRC. This document is to be kept in your records. 

• Quality Incentive Program (QIP): Compliance with audit and review requirements is tied directly to quality incentive earnings and ongoing vendor status under current Department of Developmental Services guidelines - CLICK HERE FOR MORE INFORMATION.

‼️Submission:

Once the Audit is completed, send the entire document from the CPA to SDRC Community Services Department Director or Community Services Manager - Rosalie Goulding at rosalie.goulding@sdrc.org in PDF format.

📌Additional Information:

• Must be completed by a licensed CPA and CPA information (including license number) needs to be on the report

• Engagement Letters do not suffice for meeting QIP requirements

• DDS has the ultimate decision that the audit was satifactory. 

• San Diego Regional Center (SDRC) Exemption letters not acceptable as an Audit Report.

• If DDS accepts a late audit report, DDS will update the QIP list with the corrected QIP status and effective date

• Audit reports must follow specific templates (templates were attached)

  • Examples of DDS Acceptable Format 

    • Format #1; Format #2

• Highly encouraged to give the independant CPA the follow documents: 

  • QIP directive, sample report templates, and audit regulation should be given to the licensed CPA

• To located a California Licensed Certified Public Accountant CLICK HERE

• Fiscal Year or Calendar year required to be audited

  • Per WIC 4652.5b"An entity subject to subdivision (a) shall provide copies of the independent audit or independent review report required by subdivision (a), and accompanying management letters, to the vendoring regional center within nine months of the end of the entity’s fiscal year." - 

    • The deadline: Within nine months after the close of the vendor's financial year (for example, if the fiscal year ends on December 31, the report is due by September 30).