Does a California Nonprofit Need an Audit?
California requires a nonprofit with $2 million or more in gross revenue — excluding government grants and government service contracts — to have GAAP financial statements audited by an independent CPA, and to appoint a board audit committee.
Data as of Sep 16, 2026 · Source: Federal Audit Clearinghouse (public data)
Does a California nonprofit need an audit?
California requires a nonprofit with $2 million or more in gross revenue — excluding government grants and government service contracts — to have GAAP financial statements audited by an independent CPA, and to appoint a board audit committee.
| Topic | Applies to | Rule | Threshold | Source | Last verified |
|---|---|---|---|---|---|
| State law | gross revenue of $2,000,000 or more, exclusive of grants from, and contracts for services with, governmental entities | A charitable corporation that receives or accrues in any fiscal year gross revenue of $2,000,000 or more, exclusive of grants from and contracts for services with governmental entities, must prepare annual financial statements using generally accepted accounting principles that are audited by an independent certified public accountant in conformity with generally accepted auditing standards. If it is a corporation, it must also have an audit committee appointed by the board of directors. | $2,000,000 | Cal. Gov. Code § 12586(e)(1)-(e)(2) | Last verified: 2026-09-16 |
Common questions
Does a California nonprofit need an audit?
California requires a nonprofit with $2 million or more in gross revenue — excluding government grants and government service contracts — to have GAAP financial statements audited by an independent CPA, and to appoint a board audit committee.
How does this differ from the federal single audit?
The federal single audit applies when a nonprofit spends $1,000,000 or more in federal awards in a fiscal year beginning on or after October 1, 2024 ($750,000 for earlier fiscal years). State rules are separate and are listed on this page.