Governor Tim Pawlenty signed a tax bill in 2009 that included an important provision for nonprofit organizations - to increase the threshold at which organizations are required to obtain an audited financial statement that has been examined by an independent certified public accountant. The provision raises the threshold from $350,000, where it has been for the last twelve years, to $750,000.
MCN staff testified in support of this bill, arguing that the change was an appropriate update to the standard to keep up with inflation since the previous change, as well as the increased reporting requirements under the IRS Form 990. The change was supported by MCN and passed the Legislature without opposition.
The increased threshold will still ensure that 99 percent of total charitable funds will be subject to an audit requirement, but will exempt smaller organizations for whom an independent audit would constitute a significant expense. Different states have differing audit requirements, and some have none. MCN supported an update of the threshold while still maintaining Minnesota's high level of accountability requirements for nonprofits.
Read the language of bill House File 1298, that was included in the tax policy bill. The provision is at line 191.34 in the bill.