Unalaska raises nonprofit grant audit threshold to $300,000

Nonprofits holding Unalaska city grants will no longer need a full annual audit unless their award tops $300,000. The council adopted Resolution 2026-52 on Tuesday, Aug. 25, replacing a $25,000 audit threshold that had stood since at least 2011.

The amended Community Support Grant guidelines set three tiers. Awards under $40,000 require no audit or review, only end-of-year reporting. Awards of $40,000 to $300,000 require a review or audit by an independent CPA firm, plus mid-year and end-of-year reporting: a review asks management questions and gives limited assurance, an audit tests transactions and controls and gives an opinion. Awards above $300,000 still require a full audit.

One recipient reported that its annual audit can cost roughly 13% of its total award from the city. "The current requirements place a significant burden on recipients, especially smaller ones, and a review would provide sufficient assurance and detail when making award decisions," Planning Director Cameron Dean wrote in the staff recommendation.

Five of the eight FY27 recipients fall in the middle tier. The three above it, Iliuliuk Family Health Services, the Museum of the Aleutians and USAFV, hold $1.6 million of the $2,252,752. Except APIA, recipients below the line told the city no other funder requires an audit.

State and federal single-audit thresholds sit higher than Unalaska's new $300,000 line, but they are not the only audit rules nonprofits face. Alaska requires nonprofits expending $750,000 or more in state financial assistance a year to submit an annual single audit, one covering all their government money; the state raised that from $500,000 in 2017. Those below it must still submit an independent audit every two years. Federal Uniform Guidance, the rulebook for federal awards, requires one at $750,000, rising to $1,000,000 under newer guidance.

The $40,000 figure is the 2011 threshold adjusted for inflation using the Consumer Price Index. Staff set the $300,000 line by clustering past awards. The funding formula, 3.5% of five-year average General Fund revenue plus bed and tobacco tax balances, remains unchanged by this resolution.

FY28 awards under $25,000 will be paid in a single July 2027 lump sum. Awards of $25,000 and above will be paid monthly beginning that month. Unexpended FY28 funds must be returned to the city by Aug. 31, 2028.