If your California nonprofit accepts federal funding, it must comply with “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.” This Uniform Guidance has recently been updated and amended in 2020. If your nonprofit hasn’t reviewed its procurement policies lately, now is an ideal time to ensure updated compliance on your own, or with the guidance of a California nonprofit audit.
Purchase amounts determine the necessary procurement methods
Uniform Guidance imposes strict purchasing requirements, and requires you to pay close attention to the amount of any purchase. The 2020 update allows you to make “micro-purchases” of supplies or services up to $50,000 without soliciting competitive quotes, and beyond that in certain circumstances. Procurements up to $250,000 can undergo the “simple acquisition” method of comparing quotes from qualified vendors.
Purchases over $250,000 require you to select vendors based on publicly solicited sealed bids or competitive quotes. Perform a price analysis to make independent estimates before receiving bids or quotes. Then select the bid or quote with the lowest price, but that is the most advantageous to your nonprofit’s relevant program.
Noncompetitive quotes from a single source are permissible in limited circumstances. They’re allowed during public emergencies that need immediate response.
Procurements apply to multiple documentation requirements
One requirement is your nonprofit must document in writing:
- All procurement procedures
- Conflict of interest policies covering employees involved in procurement and all entities owned by or “related” to your nonprofit
You also need records detailing each procurement:
- Bids solicited
- Selection criteria
- Quotes from vendors
- Final contract price
Providers of tax and audit services make the process more manageable for their clients by creating a checklist that includes documentation at every procurement stage.
Your nonprofit’s compliance is critical
If you fail to fully comply with the Uniform Guidance, you could lose your funding. Reduce this risk with annual auditing of your nonprofit with Ernst Wintter & Associates. Contact us today to learn more about our tax and audit services for your California nonprofit.