Audit Requirement Thresholds

Nonprofits who wish to register to solicit contributions may be required as part of the state registration process to file an audit prepared by an independent CPA or accounting firm. Whether an audit is required is largely a function of the audit requirement thresholds in 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 using audit waivers and we are happy to discuss your options. Below is a breakdown of state audit requirement thresholds.

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 $1,000,000 though Connecticut does not require this audit to be included with the filing.

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 exceed $750,000. 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. Organizations that use a professional solicitor, fundraising counsel, or other paid fundraising professional must also file audited financials, regardless of their annual contributions.

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

New Hampshire: Audit required if revenue, gains, and other support are $2,000,000 or more or if the filing is a New Hampshire corporation. If support is $500,000 to $1,999,999, 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 $750,000 or if the organization uses a professional solicitor. If gross annual revenue is between $250,000 and $750,000, a financial statement reviewed by an independent CPA is required.

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 $750,000 or more. Organizations receiving $250,000 and less than $750,000 in annual contributions must file reviewed or audited financial statements. Organizations with annual contributions between $100,000 and $250,000 must file a compiled, reviewed, or audited financial statement. Organizations with annual contributions less than $100,000 and at least $25,000 must submit internally prepared financial statements.

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 $1,000,000 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 lees government and foundation grants. Charitable organizations with annual contributions between $200,000 and $500,000 must file a financial statement reviewed by an independent CPA.

Wisconsin: Audit required if annual contributions are over $500,000. If annual contributions are between $300,000 and $500,000, the organization must file a financial statement reviewed by an independent CPA.