nonprofit corporations; audits

Plain English Breakdown

The bill text shows conflicting phrasing ('in any... fiscal year' vs 'each of the previous five... years') which was resolved by prioritizing the clearer legislative intent found in the final sentence structure requiring compliance for each of the prior five years.

SB1719: Audit Rules for Nonprofits Receiving State Money

This law requires nonprofit corporations receiving more than $250,000 in state assistance each year to file audited financial statements with the grantor agency during calendar years ending in 0 or 5.

What This Bill Does

• Requires all state contracts for assistance with nonprofits to include rules about financial and compliance audits.
• Mandates that nonprofits receiving more than $250,000 in state assistance in each of the previous five fiscal years must file audited reports at their own expense.
• Sets a filing schedule so these large recipients submit audit results only for calendar years ending in 0 or 5.
• Allows audits to be done under federal single audit rules or by an independent certified public accountant using generally accepted accounting principles.
• States that nonprofits receiving $250,000 or less must follow the specific audit terms written in their individual contracts.

Who It Names or Affects

• Nonprofit corporations as defined under Arizona law section 10-3140
• State agencies (grantor agencies) that provide financial assistance to nonprofits

Terms To Know

Fiscal year

A one-year period used for accounting and budgeting purposes.

Certified public accountant (CPA)

An independent professional who checks financial records to ensure they are accurate.

Grantor agency

The state department or office that gives money to the nonprofit corporation.

Limits and Unknowns

• The text does not specify what happens if a nonprofit fails to file its required audit.
• The effective date of this law is not listed in the provided source material.
• The bill only covers nonprofits receiving state assistance, not those funded solely by private donors.

Official Summary Text

SB1719 - nonprofit corporations; audits

Current Bill Text

SB1719 - 572R - I Ver

REFERENCE TITLE:
nonprofit corporations; audits

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1719

Introduced by

Senator
Bolick

AN
ACT

Amending section 35-181.03, Arizona Revised
Statutes; relating to audits of nonprofit corporations.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 35-181.03, Arizona Revised
Statutes, is amended to read:

START_STATUTE
35-181.03.

Audit of nonprofit corporations receiving state monies;
definition

A. All state contracts with nonprofit corporations
for assistance shall include requirements concerning financial and compliance
audits.

B.
For years ending in 0 and 5,

each nonprofit corporation that receives
in excess of two hundred
fifty thousand dollars

more than $250,000
in state
assistance in
any

each of the previous five

fiscal
year

years
shall file
for
each such fiscal year

the previous five
years
at the corporation's expense with the grantor agency either
audited financial statements prepared in accordance with federal single audit
regulations or financial statements prepared in accordance with generally
accepted accounting principles and audited by an independent certified public
accountant.

C. Each nonprofit corporation
receiving
two hundred fifty thousand dollars or less in state assistance in any fiscal
year
shall comply with contract requirements concerning financial and
compliance audits contained in contract agreements governing such programs.

D. For the purposes of this section, "nonprofit
corporation" means a corporation as defined in section 10-3140.
END_STATUTE