California Private Schools: Do You Need CPA-Reviewed Financial Statements?

California private postsecondary schools and vocational training institutions may be required to provide independently reviewed or audited financial statements as part of their regulatory requirements.

For smaller non-accredited institutions, a CPA financial statement review may satisfy the financial statement requirement without the substantially greater cost and work associated with a financial statement audit.

The California BPPE Financial Statement Requirement

The California Bureau for Private Postsecondary Education (BPPE) regulates many private postsecondary educational institutions operating in California.

Under California Code of Regulations, Title 5, Section 71475(e), a non-accredited institution applying to renew its Approval to Operate must submit current financial statements meeting the requirements of Section 74115.

The regulation establishes an important threshold:

Annual gross revenue under $500,000 — reviewed financial statements are required.

Annual gross revenue of $500,000 or more — audited financial statements are required. 

This can make CPA review services particularly valuable for smaller vocational schools, career-training institutions and other non-accredited private postsecondary schools regulated by BPPE.

What Is a CPA Financial Statement Review?

A financial statement review is an assurance engagement performed by an independent CPA.

A review provides limited assurance that the CPA is not aware of material modifications that should be made to the financial statements for them to conform with the applicable financial reporting framework.

A review is substantially less extensive than an audit and ordinarily costs significantly less.

Importantly, a compilation is not the same thing as a review. BPPE has previously taken enforcement action involving an institution that submitted compiled financial statements when reviewed financial statements were required.

What Financial Statements Does BPPE Require?

California's regulations provide specific requirements for financial statements submitted to BPPE. At a minimum, the financial statements include a:

• Balance sheet

• Income statement

• Statement of cash flows

Reviewed or audited financial statements must be prepared in accordance with the applicable requirements and performed by an independent certified public accountant who is not an employee, officer, corporate director or governing-board member of the institution.

Experienced and Efficient CPA Review Services

Streamlined Reviews focuses on independent CPA financial statement reviews and regulatory financial reporting requirements.

I am a California CPA with extensive accounting and assurance experience, including experience with nonprofit organizations, privately held businesses and organizations operating in regulated industries.

My objective is to make the review process as straightforward as possible.

Before beginning the engagement, I can provide a clear document request list so your organization knows exactly what information will be needed. Proper preparation can reduce unnecessary questions, delays and professional fees.

Affordable CPA Reviews for Smaller California Schools

Smaller vocational and career-training schools often don't have the accounting departments or financial resources of large educational institutions.

That shouldn't make regulatory financial reporting unnecessarily difficult or expensive.

My practice is structured around providing efficient and affordable CPA-reviewed financial statements while maintaining the professional standards applicable to a CPA review engagement.

Whether you operate a vocational school, career-training program, healthcare training institution, security-training school or another private postsecondary educational institution, I can help you determine the appropriate financial reporting engagement and efficiently complete the work.

Does Your School Need a CPA Review?

If you operate a non-accredited California private postsecondary institution with annual gross revenues below $500,000, reviewed financial statements may be required when renewing your BPPE Approval to Operate. Institutions with annual gross revenues of $500,000 or more are subject to the audit requirement under the regulation.

BPPE also requires approved institutions to submit annual reports containing specified institutional and program information.

If you're approaching a BPPE filing or renewal and need independently reviewed financial statements, contact Streamlined Reviews to discuss your requirements.

Affordable. Efficient. Experienced.

Streamlined Reviews — Independent CPA Financial Statement Reviews for California Regulatory Requirements