Requirements for the submission of audits or reviews are based on the gross support and revenue of the organization for the fiscal year covered by the filing.
Organizations that have gross support and revenue of more than $200,000 in a fiscal year must submit financial statements audited or reviewed by an independent certified public accountant (CPA). Whether the financial statements must be audited or reviewed depends on whether the organization's gross support and revenue exceeded $500,000 in that year.
Audited Financial Statements Required
If the organization has gross support and revenue that is more than $500,000 in the fiscal year, the financial statements must be prepared in accordance with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards for not-for-profit or governmental organizations.
Reviewed Financial Statements Acceptable
If the organization has gross support and revenue greater than $200,000 and less than or equal to $500,000 in the fiscal year, it may, in lieu of submitting audited financial statements, submit reviewed financial statements prepared in accordance with generally accepted accounting standards (GAAP) or other comprehensive basis of accounting (OCBOA). If the financial statements are prepared on an OCBOA basis, consistent with the American Institute of Certified Public Accountants standards for review reports, the statements must disclose the basis of presentation and describe how that basis differs from GAAP.
The Division further requires that all financial statements be complete and in final form (drafts are not acceptable), unbound, and with an opinion letter signed by the CPA. The Division does not accept compilations.
The organizations currently exempted from the audit (and review) requirement by regulation are:
- Private foundations that file 990PF with the IRS;
- Trusts filing probate accounts with the Division; and
- Certain trusts audited by state and federal agencies.