How to prepare for a nonprofit audit
Preparing for a nonprofit audit means a closed year, reconciled accounts, the documents the auditor asks for in one place, and — if you spend federal money — a schedule of expenditures of federal awards built before fieldwork (2 CFR 200.510). In 2024 the median nonprofit single audit reached the Federal Audit Clearinghouse 208 days after fiscal year end, so the calendar is tighter than it looks (data as of 2026-09-20).
Last verified: 2026-09-20 · Every figure links its source.
How to prepare for a nonprofit audit
- Close the year. Post all accruals, depreciation and allocations, then stop posting to the year. Every later change means re-issuing schedules.
- Reconcile everything. Bank, investment, payroll liability and credit card accounts, with the reconciliation itself saved, not just the ending balance.
- Assemble the requested documents. The list below is the usual prepared-by-client request; ask your auditor for theirs in writing.
- Build the schedule of expenditures of federal awards if you spent federal money. The single audit is built on it.
- Write down the status of every prior-year finding. The auditor must follow up on prior findings whether or not the program is major this year (2 CFR 200.514).
- Agree the timeline in writing — fieldwork dates, draft date, board meeting, submission date.
Source: 2 CFR 200.508 · 2 CFR 200.510 · 2 CFR 200.514 · Last verified: 2026-09-20
What documents does a nonprofit auditor ask for?
| Item | Why the auditor needs it | Who prepares it |
|---|---|---|
| Trial balance and general ledger for the year | Starting point for every test | Accounting |
| Bank, investment and loan statements with reconciliations | Existence of cash and debt | Accounting |
| Grant and contract agreements | Terms and conditions that drive compliance testing | Program / development |
| Schedule of expenditures of federal awards | Required by 2 CFR 200.510(b) | Accounting |
| Payroll register and the basis for allocating salaries | Allowable costs and functional expenses | HR / accounting |
| Signed board and committee minutes | Approvals, restrictions, commitments | Board secretary |
| Fixed asset, lease and debt schedules | Balances and disclosures | Accounting |
| Documentation of donor restrictions and releases | Net asset classification | Development |
| Prior-year findings and their status | Required follow-up (2 CFR 200.511) | Management |
| Written accounting policies and approval limits | Internal control understanding | Management |
Source: 2 CFR 200.508 · 2 CFR 200.510 · 2 CFR 200.511 · Last verified: 2026-09-20
What is needed for a single audit in addition to the financial audit?
Three documents that management, not the auditor, is responsible for: the schedule of expenditures of federal awards, the summary schedule of prior audit findings, and the corrective action plan for current-year findings. The corrective action plan has to be a separate document from the auditor's report and must name a contact person, the corrective action planned and the anticipated completion date for each finding (2 CFR 200.511(c)).
The reporting package submitted to the Federal Audit Clearinghouse is the financial statements and schedule, the summary schedule of prior audit findings, the auditor's reports and the corrective action plan (2 CFR 200.512(c)).
Source: 2 CFR 200.510 · 2 CFR 200.511 · 2 CFR 200.512 · Last verified: 2026-09-20
What is the audit timeline?
| Stage | What happens | Deadline driver |
|---|---|---|
| Planning | Scope, risk assessment, document request | Agreed with the auditor |
| Close and PBC | You close the year and deliver the list above | Your own calendar |
| Fieldwork | Testing, sampling, control walkthroughs | Agreed with the auditor |
| Draft and review | Draft statements, findings discussed, management responses | Board calendar |
| Submission | Data collection form and reporting package to the FAC | 30 days after receiving the report or nine months after year end, whichever is earlier (2 CFR 200.512(a)) |
For scale: across 22,398 nonprofit single audits for audit year 2024, the median gap between fiscal year end and acceptance by the Federal Audit Clearinghouse was 208 days.
Source: 2 CFR 200.512 · Federal Audit Clearinghouse · Last verified: 2026-09-20
What should a nonprofit do after an audit?
- Present the statements and any findings to the board or audit committee and minute it.
- Write the corrective action plan for each finding, with an owner and a date.
- Fix the control, not just the transaction — a finding that returns next year is reported as a repeat finding (2 CFR 200.511(b)).
- Submit the reporting package and data collection form on time; submitting after the due date also costs you low-risk auditee status, which requires on-time submission in both prior periods (2 CFR 200.520).
- Ask for the management letter and work the items that did not rise to a finding.
Source: 2 CFR 200.511 · 2 CFR 200.520 · Last verified: 2026-09-20
Questions and answers
How to prepare for a nonprofit audit?
Close the year, reconcile every account, assemble the prepared-by-client documents, build the schedule of expenditures of federal awards if you spent federal money, and write down the status of every prior-year finding before fieldwork starts.
When should we start preparing?
Start at least a quarter before fiscal year end by agreeing the timeline and the document list with the auditor, because the federal deadline is the earlier of 30 days after you receive the report or nine months after year end.
Choosing an auditor this year? Build your audit RFP or find firms that audit nonprofits.
This is public-record information, not accounting or legal advice.