Rural Development Audit Fees

ID Status Date Public/Private Industry AHACPA Contact
#8002 Closed public Rural Development Les Sparks
Customer Reply

I have a general question relating to RD audit fees that I’m hoping you can help me with. I’ve been under the impression that RD caps audit fees at $7,000, which is the amount we’ve charged our clients for many years, but I was discussing this with someone at the CARH conference in DC earlier this week and it seems that the $7,000 cap is not always adhered to. Do you happen to know the authoritative source of the $7,000 cap, if there is one?

Kathy Christensen

From Les Sparks:

There is absolutely no real legislated audit fee. You will be hard-pressed to even find inter-office memos. However, that does not mean that RD does not use such language to coerce compliance with lower fees. I have heard Stephanie White tell crowds about audit fee abuse and a desire to stay lower. they do publish to the field offices some analytical review data on fees. However, most of the pressure comes straight form the State offices. They have taken it upon themselves to jump into the fray on this issue. They are all over the map. It an auditor does audits for $2,500, that becomes the NEW de facto NORMAL amount. I think you get the picture.

Having said all of that I have many client-side people who just tell them to mind their business and have audit fees over 10k. The biggest issue is being able to get them into a conversation about comparisons. Someone does a $2,500 easy RD loan audit (and I still do not know how they can price it) and they get are used as a comparison to an RD/HUD/LIHTC audit for the same fee. It is not a fair comparison. Most of these conversation can be won. However, it entirely depends on the the client’s willingness to have the conversation.

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