Does a nonprofit need an audit committee?
Federal audit rules do not require one. Some state charity laws do: California requires a charitable corporation with gross revenue of $2,000,000 or more, excluding government grants and contracts, to have audited statements and an audit committee appointed by the board (Cal. Gov. Code § 12586).
Last verified: 2026-09-20 · Every figure links its source.
What is a nonprofit audit committee?
A committee of the board that owns the relationship with the independent auditor. In practice it does five things: recommends the firm, agrees the scope and fee, receives the results directly from the auditor, reviews findings and the corrective action plan, and reports to the full board.
- Select and re-bid the auditor, and approve the engagement.
- Meet the auditor without management present at least once a year.
- Review the draft statements, the management letter and every finding.
- Review the corrective action plan management prepares (2 CFR 200.511(c)).
- Track prior-year findings to closure.
Source: 2 CFR 200.511 · GAO Government Auditing Standards · Last verified: 2026-09-20
Are audit committees required for nonprofits?
It depends on the state and on the organization's size. Where we have verified the statute ourselves, this is what it says:
| State | What the statute requires | Source |
|---|---|---|
| California | Gross revenue of $2,000,000 or more, excluding grants from and contracts for services with governmental entities: audited financial statements and, for a corporation, an audit committee appointed by the board | Cal. Gov. Code § 12586 |
Other states set audit or review thresholds without mandating a committee — the verified list is on nonprofit audit requirements. For a state we have not verified, we say so rather than guess.
Source: Cal. Gov. Code § 12586 · Last verified: 2026-09-20
Who should be on a nonprofit audit committee?
Board members who are not employees, with at least one who can read financial statements without help. Keep the treasurer's role and the committee chair separate where you can, so the person who oversees the books is not the only person reviewing them. Where state law prescribes composition — California addresses membership in the same section — follow the statute rather than general practice.
Source: Cal. Gov. Code § 12586 · Last verified: 2026-09-20
Does the board approve the audit?
The board accepts the audited statements; it does not approve the auditor's opinion, which is the auditor's alone. In a single audit the board's practical responsibilities are the corrective action plan (2 CFR 200.511) and making sure the reporting package is submitted on time (2 CFR 200.512). Minute both.
Source: 2 CFR 200.511 · 2 CFR 200.512 · Last verified: 2026-09-20
Questions and answers
Does a nonprofit need an audit committee?
Not under federal audit rules. Some states require one — California requires an audit committee for a charitable corporation with gross revenue of $2,000,000 or more, excluding government grants and contracts.
Are audit committees required for nonprofits in every state?
No. Requirements vary, and we publish only the state positions we have verified against the statute.
What is a nonprofit audit committee responsible for?
Recommending and re-bidding the auditor, agreeing scope and fee, meeting the auditor without management, reviewing findings and the corrective action plan, and reporting to the board.
Who should be on a nonprofit audit committee?
Non-employee board members, including at least one who can read financial statements, with the treasurer's role kept distinct from the committee chair where possible.
Does NC require an audit committee for a nonprofit?
North Carolina is not in our verified set, so we do not publish a figure for it. Check the North Carolina charitable solicitation licensing requirements directly before relying on any number.
Board reviewing the audit? Use the preparation checklist.
This is public-record information, not accounting or legal advice.