Audit Requirement Thresholds

Nonprofits who wish to register to solicit contributions may be required as part of the registration process to file an audit that was prepared by an independent CPA or accounting firm. Whether an audit is required is largely a function of the state or states in which you wish to register, the amount of contributions you received, and your total revenue. There may be ways to bypass the audit requirement in several states and we would be happy to discuss options with any of our clients. Below is a breakdown of thresholds that trigger audit requirements by states.

Arkansas: Audit required if gross annual revenue exceeds $500,000

California: Audit required if gross annual revenue exceeds $2,000,000

Connecticut: Audit required if gross annual revenue exceeds $500,000

Florida: Audit required if annual contributions exceed $1,000,000. If contributions are between $500,000 and $1,000,000 financial statements must be reviewed or audited by a CPA. If annual contributions are less than $500,000, the organization will need either an audit, review, or compilation.

Georgia: Audit required if annual contributions exceeds $1,000,000 in either of its preceding two years. If contributions are between $500,000 and $1,000,000 in either of the preceding two years, the organization must have its financial statement reviewed by a CPA.

Hawaii: Audit required if gross annual revenue over $500,000.

Illinois: Audit required if contributions on line G of AG990-IL Form exceeds $300,000 or if they employ a professional solicitor.

Kansas: Audit required if annual contributions exceeds $500,000

Louisiana: Audit is only required if the organization meets the definition of “quasi-public agency” and if the organization received $500,000 or more in revenue.

Maryland: Audit is required if charitable contributions exceeds $500,000. If charitable contributions are less than $500,000 the Secretary of State may require financial statements to be reviewed by an independent CPA.

Massachusetts: Audit is required if gross annual support and revenue are over $500,000. If annual support and revenue are below these thresholds, financial statements must be either audited or reviewed by an independent CPA. 990-PF filers are exempt from the audit requirement.

Michigan: Audit is required if annual contributions (not counting government grants) are $525,000 or more. If annual contributions are between $525,000 and $275,000, financial statements must be either reviewed or audited by an independent CPA.

Minnesota: Audit is required if total annual revenue is over $750,000.

Mississippi: Audit is required if annual contributions are over $500,000 or if the organization uses a professional solicitor.

Missouri: Audit is required if organization is not a 501(c)(3).

New Hampshire: Audit required if revenue, gains, and other support are $1 million or more or if the filing is my a Hew Hampshire corporation. If support is $500,000 or more, an organization’s financial statement must be prepared in accordance with generally accepted accounting principles (GAAP).

New Jersey: Audit required if total annual revenue is $500,000 or more and gross contributions exceed $25,000.

New Mexico: Audit required if total annual revenue in excess of $500,000.

New York: Audit required if gross annual revenue is over $500,000 or if the organization uses a professional solicitor. If gross annual revenue is between $250,000 and $500,000 a financial statement reviewed by an independent CPA.

North Carolina: An audit is only required if the organizations received state funds from North Carolina.

Oregon: Oregon requests a copy of an audit if one was prepared.

Pennsylvania: Audit required if annual contributions are $300,000 or more. If contributions are between $100,000 and $300,000, the organization must file a financial statement that is reviewed or audited by an independent CPA. A charitable organization with annual contributions less than $100,000 and at least $50,000 must have a compilation, review, or audit of its financial statements prepared by an independent CPA.

Rhode Island: Audit required if annual contributions are $500,000 or more.

Tennessee: Audit required if gross annual revenue excluding government grants and grants from 501(c)(3) private foundations is over $500,000.

Virginia: Audit required if gross annual revenue of $1 million or more. If gross annual revenue is between $750,000 and $1,000,000, the organization must file a financial review.

West Virginia: Audit required if annual contributions are over $500,000. Charitable organizations with annual contributions between $200,000 and $499,99 must file a financial statement reviewed by an independent CPA.

Wisconsin: Audit required if annual contributions over $400,000. If annual contributions are between $200,000 and $400,000, the organization must file a financial statement reviewed by an independent CPA.