Unalaska raises nonprofit grant audit threshold to $300,000

Unalaska's small nonprofits won't have to pay for a full annual audit to keep their city grants anymore — a requirement that one group said was eating about 13 percent of what the city gave it.

The City Council raised the audit threshold in August, replacing a $25,000 trigger that hadn't changed since at least 2011. Now, grants under $40,000 require no audit or review at all, just end-of-year reporting. Awards between $40,000 and $300,000 need either a review or an audit by an independent accounting firm — a review being the lighter, cheaper option. Only awards above $300,000 still require a full audit.

"The current requirements place a significant burden on recipients, especially smaller ones," Planning Director Cameron Dean wrote in recommending the change, adding that a review would give the city enough assurance to make award decisions.

The new $40,000 floor is simply the old threshold adjusted for inflation. Most of the city's current grantees — five of eight — land in the middle tier. The three largest, including Iliuliuk Family Health Services and the Museum of the Aleutians, hold most of the roughly $2.25 million the city awards.

The change doesn't leave the money unwatched. Nonprofits that spend enough government money still face state and federal audit requirements that kick in well above Unalaska's new line — $750,000 a year under both state and federal rules. And nearly all of the smaller recipients told the city that no other funder requires them to get an audit at all.