nonprofit corporations; audits

Plain English Breakdown

The official source material does not provide specific details on enforcement or penalties for non-compliance with audit requirements.

Nonprofit Corporations; Audits

This bill amends the requirements for financial and compliance audits of nonprofit corporations that receive state assistance.

What This Bill Does

• Amends section 35-181.03, Arizona Revised Statutes, to require all state contracts with nonprofit corporations for assistance to include audit requirements.
• Requires nonprofits receiving over $250,000 in state assistance each year for five consecutive years to file audited financial statements at their own expense.
• Specifies that nonprofits receiving up to $250,000 must comply with the audit requirements set by their contract agreements.

Who It Names or Affects

• Nonprofit corporations receiving state assistance
• State agencies providing money to nonprofits

Terms To Know

nonprofit corporation

A type of organization that does not make a profit and uses its income to further its goals.

audit

An official examination of the financial accounts of an organization or business.

Limits and Unknowns

• The bill does not specify what happens if nonprofits do not follow these audit requirements.
• It is unclear how this will affect smaller nonprofits that receive less than $250,000 in state assistance.

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