What to Do When Your Regional Center Sends a Compliance Letter

Receiving a compliance letter from your Regional Center is stressful. But vendors who respond quickly and correctly almost always resolve the issue without losing their vendorization status. Here is what to do — and what to avoid — starting the moment the letter arrives.

First: Understand What the Letter Means

Regional Centers are legally required to notify vendors who have not complied with WIC §4652.5 reporting requirements. The letter typically states that your organization has not submitted the required CPA review or independent audit for a specific fiscal year, and that failure to remedy this within a set timeframe may result in placement on the DDS Do Not Refer list.

This is serious — but it is not the same as losing your vendorization. The letter is a warning and an opportunity to come into compliance before more serious consequences take effect.

Step 1: Read the Letter Carefully and Note the Deadline

The letter will specify:

• Which fiscal year(s) are outstanding
• The specific submission deadline to avoid further action
• The name and contact at the Regional Center to submit to

Write down the deadline on your calendar immediately. Everything else flows from that date.

Step 2: Contact an Independent CPA — Today

The single most important action is to engage an independent CPA as quickly as possible. Do not wait until you have "organized your records." A qualified CPA can advise you on the records needed and work with you to gather them efficiently.

If multiple fiscal years are outstanding, a CPA experienced in catch-up engagements can often complete them simultaneously, reducing the total time and cost compared to sequential engagements.

What to tell the CPA on the first call:

• Your total Regional Center funding for each outstanding year
• Your fiscal year end date
• How many years are outstanding
• The deadline stated in the compliance letter
• The general state of your financial records (whether they are in accounting software, spreadsheets, or paper)

Step 3: Do Not Ignore the Letter or Ask for an Extension Without a Plan

Some vendors respond to compliance letters by requesting an extension without having engaged a CPA. Regional Centers may or may not grant extensions — and even when they do, the extension is typically only 30–60 days. Without a CPA already engaged, that time passes quickly and you find yourself in the same position.

If you need additional time, the strongest request you can make is: "We have engaged CPA [Name] at [Firm] and fieldwork is underway. We expect to deliver the report by [Date]." That is a request that Regional Centers can act on. A request with no plan attached is much harder for a Regional Center to approve.

Step 4: Gather Your Records

Your CPA will provide a records request list, but here are the items most commonly needed for a WIC §4652.5 review or audit:

• General ledger and trial balance for the fiscal year
• Bank statements for all accounts (12 months)
• Payroll records and W-2 detail
• Regional Center contracts and payment reports
• Fixed asset schedule
• Prior year financial statements (if available)
• Accounts receivable and payable aging
• Board-approved budget

Step 5: Submit Immediately After Receiving the Final Report

Once your CPA issues the final signed report and management letter, do not sit on it. The Regional Center has its own reporting obligations to DDS — they are required to forward your report within 30 days of receiving it. Your goal is to give the Regional Center as much time as possible to process and forward your report before their own deadline.

A Note About the Management Letter

If your CPA identifies findings in the management letter — internal control weaknesses, 85/15 spending issues, or other compliance items — take those seriously. Implement the corrective actions as quickly as possible and document that you have done so. In future years, a clean management letter strengthens your case for a two-year exemption from the annual filing requirement.