Nonprofit CPA Services: Audit, Single Audit, Form 990

Supporting your mission since 1975.

Nonprofit accounting follows rules that businesses never encounter, and when it goes wrong, the mistakes are public. Net asset classification, donor restrictions, functional expense allocation, in-kind contribution valuation, and the public support test all work differently from commercial accounting. On top of that, your Form 990 is read by donors, grantmakers, watchdog organizations, and your board may not include anyone with financial training, and a small finance team carries all of it.

Larson & Company has audited and advised nonprofits since the firm opened in 1975, and that work has always been a significant part of our practice. Many of our people serve as board members and volunteers with organizations in their own communities, so we understand how nonprofits operate from the inside. We work with charities, foundations, associations, and social service agencies across Utah and nationwide. Our goal is to make the finance director's job easier, because in most organizations that is one person doing the work of three.

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Does Your Nonprofit Need an Audit, a Review, or Neither?

Organizations overspend on this question more than any other, so it is worth settling before you scope anything.

An audit requirement can come from a federal or state funder, your state's charitable registration rules, a grantmaker, a lender, or your own bylaws. Each source sets its own rules, and they often ask for different things. A review costs substantially less than an audit and satisfies many funders, along with most bylaws written before the organization grew.

Send us the requirement language from whoever is asking. We will read it and tell you what you need, and we regularly tell organizations that a review is enough.

One exception: once federal award spending reaches $1 million in a fiscal year, a single audit is required. That applies to fiscal years beginning on or after October 1, 2024. A single audit is layered on top of the financial statement audit, and a review cannot take its place.

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Nonprofit Financial Statement Audits

We audit tax-exempt organizations under generally accepted auditing standards. These are the areas that consistently need the most attention:

Net asset classification. Amounts must be correctly split between net assets with and without donor restrictions. Releases from restriction belong in the period the restriction is satisfied, which is not always when the cash goes out.

Contribution revenue recognition. Is a transaction a contribution or an exchange? When does a conditional promise become unconditional? How should multiyear pledges be recorded and discounted? Grants in particular are frequently misclassified.

Functional expense allocation. Expenses have to be split across program, management and general, and fundraising, using a documented method applied the same way every year. Donors scrutinize this schedule more than any other. We help you build an allocation method you can explain and defend. Our guide to allocating functional expenses covers the basics.

In-kind contributions. Donated goods, services, and use of facilities need proper valuation and presentation, including the disclosures required under ASU 2020-07.

Endowments and investments. This covers underwater endowment reporting, spending policy application, and compliance with state law under UPMIFA.

For nonprofit audit questions, contact Kyle Robbins, audit partner and leader of our Nonprofit Practice Group.

Single Audits Under the Uniform Guidance

For organizations spending $1 million or more in federal awards.

A single audit adds compliance testing on major federal programs to the financial statement audit. We test whether federal money went to allowable costs and whether eligibility requirements were applied. We also check that procurement rules were followed, subrecipients were monitored, and reporting was accurate and on time.

Findings are reported to the Federal Audit Clearinghouse. They can cost you low-risk auditee status and affect future funding. The most common findings come from:

Procurement policy failures
Inadequate subrecipient monitoring
Missing time and effort documentation
A schedule of expenditures of federal awards that doesn't tie to the general ledger

We tell you during planning which of these areas look weak, while there is still time to fix them. Our checklist for preparing for a nonprofit single audit is a good place to start.

Form 990 and Nonprofit Tax Services

Your Form 990 is a public document, and people read it. Grantmakers review it during due diligence, charity rating organizations score it, journalists use it, and prospective board members look it up. An organization can be fully compliant and still present poorly when the return is treated as paperwork. We treat the narrative sections as your organization's public story and write them with care.

We prepare Forms 990, 990-EZ, 990-PF, and 990-T, and we also handle:

Unrelated business income. We identify activities that generate it, apply the separate trade or business rules, and file the 990-T.

Public support testing. We monitor the calculation across the measurement period so your organization never discovers a private foundation reclassification after the fact.

Exemption applications and changes. This includes support when your activities shift enough to raise questions about your exempt purpose.

Federal and Utah nonprofit reporting requirements change often, and we help you stay current throughout the year so your 501(c)(3) status stays protected. For nonprofit tax questions, contact Richard Scoresby, tax partner and leader of our Nonprofit Tax Practice.

Outsourced Accounting for Nonprofits

For organizations whose finance function is one person, a part-time bookkeeper, or a volunteer treasurer.

When fund accounting goes wrong, it produces audit findings, restricted funds nobody can track, and board reports nobody trusts. We scale our services to the size of your organization:

Bookkeeping and monthly close
Grant and restricted fund tracking
Board-ready financial reporting packages
Controller-level oversight
QuickBooks setup, training, and support for your staff
Financial statement compilation and review, on a regular or as-needed basis

Independence rules limit the accounting work we can perform for an organization we also audit, and we explain that boundary during scoping. For nonprofit accounting questions, contact Camille Butkovich, senior accounting services manager.

How much does a nonprofit audit cost?

It depends on your organization's size and complexity, the number of funding sources, and whether a single audit is required. We quote a fixed fee after scoping.