How long for a nonprofit to retain audit reports?
Federal award records must be kept three years from the date the final financial report is submitted (2 CFR 200.334), with exceptions that extend the period. The audited financial statements themselves are usually kept permanently as a governance record.
Last verified: 2026-09-20 · Every figure links its source.
What is the federal retention rule?
Recipients and subrecipients must retain all federal award records for three years from the date of submission of the final financial report; for awards renewed quarterly or annually, the period runs from the submission of the quarterly or annual report (2 CFR 200.334).
| Situation | How long instead |
|---|---|
| Litigation, a claim or an audit finding started before the period ends | Until all litigation, claims or audit findings involving the records are resolved and final action taken |
| The federal agency, pass-through entity or cognizant agency extends it in writing | As directed |
| Property and equipment acquired with federal funds | Three years after final disposition |
| Records transferred to or kept by the federal agency | The rule does not apply |
| Program income earned after the period of performance | Three years from the end of the fiscal year in which it was earned |
| Indirect cost rate computations | Three years from submission, or from the end of the fiscal year covered if not submitted for negotiation |
Source: 2 CFR 200.334 · Last verified: 2026-09-20
How long should you keep the audit report itself?
There is no federal rule that sets a retention period for the audited financial statements as such — the three-year rule is about award records. In practice organizations keep audit reports, board minutes and filed returns permanently, because they are the evidence of governance and because funders ask for prior years. Note that filed single audits stay public in the Federal Audit Clearinghouse regardless of what you keep (fac.gov), and the IRS requires annual returns to be available for public inspection for three years (IRS).
Source: 2 CFR 200.334 · Federal Audit Clearinghouse · IRS, public disclosure of exempt organization returns · Last verified: 2026-09-20
How many years does an audit look back?
The audit covers one fiscal year, but two prior years matter: the auditor follows up on prior audit findings regardless of whether the program is major this year (2 CFR 200.514(e)), and low-risk auditee status is judged on the two preceding audit periods (2 CFR 200.520). Keep at least three years of working papers accessible for that reason alone.
Source: 2 CFR 200.514 · 2 CFR 200.520 · Last verified: 2026-09-20
How long are nonprofit audits valid for?
An audit is not a licence and does not expire — it is an opinion on one fiscal year. What expires is its usefulness: funders and lenders normally want the most recent year, and state charity registrations run annually. If someone asks whether your audit is still valid, they are usually asking whether a newer one exists.
Source: 2 CFR 200.512 · Last verified: 2026-09-20
Questions and answers
How long for a nonprofit to retain audit reports?
Federal award records must be kept three years from submission of the final financial report, with exceptions for litigation, unresolved findings, written extensions, property records, program income and indirect cost computations.
How long are nonprofit audits valid for?
An audit does not expire; it is an opinion on a single fiscal year. Funders normally want the most recent one.
How many years does a typical audit of a nonprofit go back?
One fiscal year, but the auditor follows up on prior-year findings and low-risk auditee status is judged on the two preceding audit periods.
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This is public-record information, not accounting or legal advice.