Dear Carol:
Our organization was organized last year. It is a non-profit group that was designed to offer homeschool sports to our local homeschool athletes.
In January we received our 501c3 status as a non-profit group. It is time for our annual audit, but I am not sure which way to go now and who to get to do the audit.
I used an excel spreadsheet to do our check register.
Any help or suggestions that you could offer would be greatly appreciated.
Sincerely,
Nikki D
Nikki,
Congratulations on obtaining your 501c3 status. that’s a huge accomplishment!
I’d be happy to help you in any way that I can. You mentioned your “annual audit.” Does your organization really need an annual audit? An audit has a specific meaning in accounting and it involves an in-depth look at your entire accounting operation. It is very time consuming and expensive ($3,000 and up). Since you said that you keep your records on an Excel spreadsheet, I assume that the record keeping is pretty simple. So, that makes me wonder if you mean an “audit” or something else, like just filing your annual information return with the IRS.
Carol Topp, CPA
Follow up: Nikki sent me the bylaws for her organization and I made some recommended changes, gave her some financial practices to follow.
Read an excerpt from Money Management in a Homeschool Organization about the financial practices I recommended to Nikki and to all homeschool groups
I also suggested she consider doing an internal audit.
Some small nonprofits and churches do an internal audit annually or every other year. An internal audit goes beyond the financial practices I recommended, but it is not as extensive as a full audit. Internal audits are performed by people within the organization. They check accounting records for compliance with the financial practices.
The following website explains internal audits for small churches and nonprofits:
https://www.freechurchaccounting.com/churchaudit.html
It also contains a checklist for conducting an internal audit:
https://www.freechurchaccounting.com/support-files/internalauditchecklistguidelines.pdf