Regional Center Vendor
Audits & Reviews
Independent CPA audits and financial statement reviews for California Regional Center vendors. Serving all 21 Regional Centers. Bay Area offices in San Francisco and Walnut Creek.
California Welfare and Institutions Code §4652.5 requires that all vendors receiving payments from a Regional Center for services rendered to individuals with developmental disabilities must obtain an independent audit or financial statement review of their financial records — conducted by an independent CPA.
Failure to comply results in suspension of Regional Center payments. The Department of Developmental Services (DDS) enforces compliance through independent audit/review report and management letter submission requirements. There are no extensions, and non-compliance is not remedied informally.
Which Do You Need — Audit or Review?
The type of engagement is determined solely by the amount of Regional Center funding you received during the State fiscal year (July 1 – June 30).
The 85/15 Program-Spending Rule
Under WIC §4652.5, Regional Center vendors must spend at least 85% of Regional Center funding on direct program services — services delivered directly to individuals with developmental disabilities. No more than 15% may be allocated to administration or overhead.
This is one of the most common sources of audit findings. Auditors test this ratio directly, and a violation can trigger a DDS compliance action.
Consequences of Non-Compliance
- Suspension of Regional Center payments — all reimbursements stop until compliance is documented.
- Placement on the DDS "Do Not Refer" list — new clients cannot be referred to your program, cutting off future revenue.
- Payment delays — even pending resolution of compliance issues, DDS can withhold payments.
- Risk to vendorization — persistent non-compliance can jeopardize your vendorization status entirely.
Vendor Types We Serve
Our Compliance Process — From Inquiry to Report Delivery
Two-Year Exemption
Newly vendorized Regional Center vendors may qualify for a two-year exemption from the full audit/review requirement under WIC §4652.5. Eligibility requires an unmodified opinion (a clean report with no material issues) from your most recent engagement. The exemption must be applied for and approved — it is not automatic.
We handle the eligibility assessment and exemption application. Ask us if you qualify →
Frequently Asked Questions
Vendors receiving $500,000–$1,999,999 in Regional Center funding require an independent CPA review (limited assurance). Vendors receiving $2,000,000 or more require a full financial statement audit (reasonable assurance). Thresholds are based on Regional Center funding only — not total revenue — and are measured against the State fiscal year (July 1 – June 30).
Regional Centers are required by the Department of Developmental Services (DDS) to notify all vendors of their audit and review obligations under WIC §4652.5. A compliance letter means you are required to submit an independent audit or financial statement review for the fiscal year specified. The deadline is within 9 months of your fiscal year-end.
An audit provides "reasonable assurance" — the highest level of assurance available. It involves detailed testing of transactions and internal controls. Required when you receive $2,000,000 or more in RC funding. A review provides "limited assurance" — less extensive, faster, and less costly. Required when you receive $500,000–$1,999,999 in RC funding.
No. The thresholds under WIC §4652.5 are based exclusively on Regional Center funding — the payments you receive from the Regional Center for services to individuals with developmental disabilities. Total organizational revenue, grants from other sources, and private-pay income are not counted. A large nonprofit with $5M in total revenue but only $400K in RC funding would not meet the review threshold.
Reports are due within 9 months of the vendor's fiscal year-end. For vendors on a calendar year (ending December 31), the deadline is September 30 of the following year. For vendors on a June 30 fiscal year-end, the deadline is March 31. There are no extensions under the statute.
At least 85% of Regional Center funding must be spent on direct program services — services delivered directly to clients with developmental disabilities. No more than 15% may be allocated to administration or overhead. Violations of this ratio are among the most common audit findings for RC vendors and can trigger a DDS compliance action.
Non-compliance results in suspension of all Regional Center payments and risk of placement on the DDS "Do Not Refer" list, which prevents new clients from being referred to your program. This can also jeopardize your vendorization status. Payment delays begin even while issues are being resolved. The cost of non-compliance far exceeds the cost of an audit or review.
Yes. WIC §4652.5 applies to all vendors receiving Regional Center payments — nonprofit, for-profit, and government alike. Tax-exempt status does not exempt a vendor from the audit or review requirement.
All 21 California Regional Centers fall under the WIC §4652.5 requirement. Guidepost Inc. serves vendors across every Regional Center in the state, with offices in San Francisco (50 California Street) and Walnut Creek (1255 Treat Blvd).
A management letter is a companion document issued alongside an audit or review report. It communicates internal control deficiencies, process weaknesses, and recommendations for improvement identified during the engagement. While not always required, it is best practice and expected by most Regional Centers.
Serving vendors across all 21 California Regional Centers. Offices in San Francisco (50 California Street, Suite 1500) and Walnut Creek / East Bay (1255 Treat Blvd, Suite 300).
Get Compliant Today
Most RC vendors need 4–6 weeks. Don't wait until the deadline is 30 days away.