Unalaska council raises nonprofit grant audit threshold to $300,000

Nonprofits holding Unalaska city grants of less than $300,000 no longer have to pay for a full financial audit every year. The Unalaska City Council adopted Resolution 2026-52 on Tuesday, Aug. 25, by a roll call vote of 5 yes and 0 no. The measure raises the mandatory audit threshold from the $25,000 award level that had triggered the requirement before.

Under the amended guidelines, grants of $40,000 to $300,000 require either a review or an audit by a recognized CPA firm, plus mid-year and end-of-year reporting and monthly disbursements. Grants under $40,000 require no audit or review, only end-of-year reporting, and are paid in a single disbursement. Awards above $300,000 still require a full audit. Recipients required to submit an audit or review must file it within seven months after the end of their fiscal year.

The resolution changes compliance rules only. It does not appropriate new grant money or expand the program budget. It leaves in place the existing funding formula of 3.5 percent of average General Fund revenue for the past five years, plus Bed Tax and Tobacco Excise Tax fund balances.

The council last revised the program guidelines on Oct. 22, 2024. The $25,000 audit trigger had been unchanged since at least 2011. The new $40,000 floor was set by adjusting it for inflation using the Consumer Price Index. One recipient reported that audit costs consume about 13 percent of its city award.

An earlier Alaska News article on Unalaska's grant program noted that eight nonprofits requested $2.25 million for fiscal 2027 and the council awarded the full amount, with Iliuliuk Family Health Services receiving $800,000.

The Foraker Group, an Alaska nonprofit support organization, argued in comments on the state's single-audit rules that raising the state threshold from $500,000 to $750,000 would cut unnecessary costs for nonprofits while maintaining accountability.