Does my New York nonprofit need an independent audit?
Whether your New York nonprofit needs an independent audit depends on your annual revenue. The New York Charities Bureau sets specific thresholds that determine what level of financial oversight you need.
If your nonprofit has annual revenue over $250,000 but under $750,000, you need a CPA review. This is less intensive than an audit but still requires an independent CPA to examine your financial statements and provide limited assurance that they’re accurate.
If your annual revenue exceeds $750,000, you need a full independent audit. This is a comprehensive examination where an auditor tests your internal controls, verifies transactions, and issues an opinion on whether your financial statements fairly represent your organization’s financial position.
These requirements tie into your CHAR500 annual filing with the Attorney General’s office. The filing itself requires different schedules and attachments based on your revenue level, and the audit or review report must be submitted along with it.
Organizations under $250,000 in revenue don’t need either a review or an audit. You still file the CHAR500, but you can submit unaudited financial statements.
The quality of your books directly affects how smoothly these processes go. Solid nonprofit bookkeeping means auditors can trace transactions, verify that expenses match documentation, and confirm that revenue is recorded correctly. When your books are messy or incomplete, the auditor spends more time asking questions and requesting documentation. That means higher audit fees and a more stressful process for your staff.
Clean, organized books mean the auditor can do their work efficiently. Bank reconciliations should be done monthly. Expenses should be categorized consistently. Restricted funds should be tracked separately from unrestricted funds. Donor records should match what’s in your accounting system. The same bookkeeping discipline that applies to small business bookkeeping on Long Island matters just as much for nonprofits preparing for CPA reviews or audits.
Many nonprofits don’t realize they’ve crossed a revenue threshold until it’s time to file. If your organization has been growing, review your revenue against these thresholds each year so you’re not caught off guard. The time to get your books in order is now, not two weeks before the audit starts.
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