Unalaska eases yearly audit requirement for its small nonprofit grantees

Unalaska is easing a costly requirement for the small nonprofits it funds: most will no longer have to pay for a full financial audit every year to keep their city grants.

The City Council raised the threshold that triggers a mandatory audit, in a change adopted Aug. 25. The old trigger — a $25,000 grant — hadn't changed since at least 2011. Now, nonprofits with city grants under $40,000 face no audit or review at all, just end-of-year reporting. Grants between $40,000 and $300,000 require either a review or an audit, and awards above $300,000 still require a full one.

The cost is the reason. One grant recipient told the city that audits eat up about 13 percent of its city award — money spent proving where the money went rather than on the work itself. The new $40,000 floor is essentially the old one adjusted for inflation.

The change affects paperwork, not funding. It doesn't add any grant money or alter the formula the city uses to fund the program, which awarded eight nonprofits a combined $2.25 million for the coming year, led by $800,000 to Iliuliuk Family Health Services.

Unalaska isn't alone in weighing the tradeoff. The Foraker Group, an Alaska nonprofit support organization, has argued that raising audit thresholds cuts unnecessary costs for small nonprofits while still keeping them accountable.