Duma bill abolishes audits for small funds
Russian State Duma approves First Reading of a Bill abolishing mandatory audits of small amount of funds
The main criterion for an audit exemption is that the total value of an asset and money received by charities should not exceed a certain amount.
The Duma has passed the First Reading of a Bill which states that a charity shall not be obliged to carry out an audit on “the amount of assets and funds received by charities during the year provided the total sum does not exceed three million roubles”. This will save NGOs the costs involved in organising and conducting audits.
Under current arrangements, any NGO (including charitable organisations) which is a registered charity has to carry out an audit regardless of annual turnover of funds and the state of its balance sheet. The Duma is proposing amending Article 5 of the federal law on “Auditing activities”.
The Ministry of Economic Development started work on the Bill in 2018 and subsequently submitted proposals to Government on how mandatory audit procedures for NGOs could be improved.
NGOs which are still required to carry out an audit
These amendments will not apply to NGOs who have earmarked target capital or receive income from that source. For them, the federal law on the “Procedure for the creation and use of NGO target capital” already sets a threshold of 20 million roubles for the owners and five million roubles for the recipients of target capital, as reported on the Duma’s official website.