Nonprofit Audit Requirements in Georgia

Nonprofit Audit Requirements: What Georgia Nonprofits Need to Know

Many Georgia nonprofits rely on state/federal funding and grants to continue operations and their mission. However, gaining access to these critical items comes with potential nonprofit audit requirements. These requirements are not always simple, and the right answer depends on several factors.

Georgia nonprofits should pay close attention to three main areas: Georgia charitable solicitation rules, federal Single Audit requirements, and annual IRS reporting obligations. These requirements are related, but they are not the same, so understanding these requirements early can help nonprofit leaders avoid missed deadlines, funding delays, compliance issues, and last-minute audit preparation.

Similar to our previous overview of 401k audit requirements, we’ve prepared a thorough guide to help Georgia nonprofits understand the when, where, and why of nonprofit audits- and what you need to know to prepare.

What Is a Nonprofit Audit?

A nonprofit audit is an independent examination of a nonprofit organization’s financial statements by a certified public accountant. It is a type of external audit specific to nonprofits. The purpose is to provide assurance that the financial statements are presented fairly, in all material respects, in accordance with the applicable accounting framework.

For nonprofits, an audit can also help demonstrate transparency to donors, grantors, board members, lenders, and regulators. While some organizations voluntarily obtain audits as a best practice, others are required to do so because of state law, federal funding thresholds, grant agreements, or internal governance documents.

It is also important to distinguish an audit from other levels of CPA service, particularly the difference between audit vs. review vs. compilation. A review provides limited assurance and is narrower in scope than an audit. A compilation presents financial information in financial statement form but does not provide assurance. For Georgia nonprofits, the distinction matters because certain contribution thresholds may require either reviewed or audited financial statements as opposed to a compilation.

When Does a Georgia Nonprofit Need an Audit?

A Georgia nonprofit may need an audit for several reasons. The most common triggers include:

• Georgia charitable solicitation registration requirements
• Federal Single Audit requirements
• Georgia Department of Audits and Accounts requirements for certain organizations receiving state funds
• Grantor or lender requirements
• Board, donor, or internal governance requirements
• Bylaws or contractual obligations

Because these requirements can overlap, nonprofit leaders should not rely on one rule alone. Instead, organizations should review all applicable requirements each year as part of their annual compliance planning. Let’s break down each of these potential triggers.

Georgia Charitable Solicitation Audit Requirements

Georgia nonprofits that solicit charitable contributions may be subject to financial reporting requirements under the Georgia Charitable Solicitations Act.

In general, Georgia uses contribution-based thresholds to determine the level of financial statement reporting required. For charitable organizations that received or collected more than $1 million during the preceding fiscal year, Georgia generally requires certified financial statements (certified meaning they were audited by and independent certified public accountant). Organizations that received or collected more than $500,000 but not more than $1 million generally must file financial statements reviewed by an independent CPA.

For organizations below those thresholds, financial statements may still be required, but they may not need to be audited or reviewed by an independent CPA.

This means a Georgia nonprofit’s audit requirement may depend not only on total revenue, but on the amount of contributions received or collected during the relevant fiscal year. Nonprofit leaders should review the applicable Georgia rules carefully and confirm whether their organization is required to register, renew, file financial statements, or submit CPA-reviewed or CPA-audited financial statements.

Federal Single Audit Requirements for Nonprofits

A separate audit requirement may apply to nonprofits that expend federal awards.

For fiscal years subject to the updated Uniform Guidance, the Single Audit threshold has increased from $750,000 to $1 million in federal awards expended during the fiscal year. This means that a nonprofit that expends $1 million or more in federal awards may be required to undergo a Single Audit.

A Single Audit is different from a standard financial statement audit. It includes both an audit of the financial statements and an audit of compliance with federal award requirements. These requirements can involve areas such as allowable costs, reporting, procurement, internal controls, eligibility, and other program-specific compliance rules.

Nonprofits that receive federal funding should track federal expenditures carefully throughout the year. The threshold is based on federal awards expended, not simply awarded, received, or budgeted. Organizations that are close to the $1 million threshold should review their Schedule of Expenditures of Federal Awards and grant documentation before year-end to determine whether a Single Audit may be required.

Georgia Department of Audits and Accounts Requirements

Some Georgia nonprofits may also have reporting requirements tied to state funding.

The Georgia Department of Audits and Accounts indicates that organizations expending $100,000 or more in state funds may be required to submit annual audited financial statements. Organizations that meet the federal Single Audit threshold may also need to submit Single Audit reporting packages.

For nonprofits that receive state funds, pass-through funds, or government grants, this is an important distinction. Even if the organization does not meet Georgia’s charitable solicitation audit threshold, it may still have an audit requirement tied to state funding or grant compliance.

Other Reasons a Nonprofit May Need an Audit

Even when an audit is not legally required, a nonprofit may still need one for practical or strategic reasons.

Common examples include:

Grant Requirements – Many foundations, government agencies, and institutional funders require audited financial statements before awarding or renewing grants. Some may require an audit once an organization reaches a certain revenue level, while others may request one regardless of size.

Board Governance – A nonprofit board may choose to require an audit as part of its fiduciary oversight responsibilities. This can be especially important for organizations experiencing rapid growth, leadership transition, major program expansion, or increased donor scrutiny.

Bylaws or Internal Policies – Some nonprofits have bylaws, board policies, or finance committee charters that require an annual audit. These requirements may apply even if state or federal law does not otherwise require one.

Lender or Financing Requirements – If a nonprofit has debt, a line of credit, or a major financing arrangement, the lender may require audited or reviewed financial statements.

Donor Confidence – Audited financial statements can support transparency and credibility, especially for organizations that rely on major gifts, public fundraising campaigns, or institutional donors. Performing an audit even if not required is one way to boost donor’s confidence that their donations are being handled with care and trustworthiness.

IRS Form 990 vs Nonprofit Audit

Most tax-exempt organizations must file an annual return or notice with the IRS, but IRS Form 990 filing requirements are separate from audit requirements- they are not one in the same.

For 2026 planning purposes, nonprofits should generally understand the Form 990 series as follows:

• • Organizations with gross receipts normally $50,000 or less may be eligible to file Form 990-N, also known as the e-Postcard.
  • Organizations with gross receipts under $200,000 and total assets under $500,000 may generally file Form 990-EZ or Form 990.
  • Organizations with gross receipts of $200,000 or more, or total assets of $500,000 or more, generally file Form 990.
  • Private foundations generally file Form 990-PF.

Form 990 is typically due on the 15th day of the fifth month after the end of the organization’s taxable year. For calendar-year organizations, that deadline is generally May 15.

While Form 990 is not an audit, it is still an important public-facing compliance document. Donors, watchdog organizations, grantors, and members of the public may review it. For that reason, nonprofits should make sure their financial records, governance disclosures, compensation reporting, and program service descriptions are accurate and consistent with their audited or reviewed financial statements, when applicable.

How Nonprofits Can Prepare for an Audit

Audit preparation should not begin after the fiscal year closes. As mentioned in previous articles, audit readiness is a marathon, not a sprint; the strongest audit outcomes usually come from consistent financial processes throughout the year. Most audit issues are preventable by addressing discrepancies like lack of documentation, unclear tracking, or weak segregation of duties

Georgia nonprofits (or any nonprofit!) can prepare by focusing on the following areas:

1. Maintain Accurate, Timely Financial Records

Monthly reconciliations, clean general ledger activity, and properly categorized revenue and expenses can make the audit process smoother and reduce the risk of delays.

2. Track Restricted Funds Carefully

Nonprofits often receive donor-restricted or grant-restricted funds. Organizations should be able to show how restricted funds were received, tracked, spent, and reported.

3. Keep Grant Documentation Organized

For organizations receiving federal, state, or foundation funding, grant agreements, award letters, budgets, reimbursement requests, and compliance documentation should be retained and easy to access.

4. Review Internal Controls

Auditors often evaluate processes related to cash receipts, disbursements, payroll, approvals, segregation of duties, and financial reporting. Smaller nonprofits may have limited staff, but they should still have documented controls and oversight procedures.

5. Reconcile Contributions and Fundraising Records

Contribution records should align with donor reports, bank deposits, pledge records, and financial statements. This is especially important for organizations close to Georgia’s charitable solicitation reporting thresholds.

6. Prepare Board Minutes and Governance Records

Auditors may request board minutes, finance committee minutes, conflict-of-interest policies, approval documentation, and other governance materials (which are often used to prove that internal controls are in place).

7. Identify Related-Party Transactions

Nonprofits should document transactions involving board members, officers, key employees, related organizations, or other related parties.

8. Confirm Whether a Single Audit Applies

Organizations receiving federal funds should review federal expenditures before year-end. If federal expenditures approach or exceed the Single Audit threshold, additional preparation may be needed.

9. Track and Document In-Kind Contributions

As part of the annual audit process, ensure that all significant in-kind contributions of goods and services are included in the accounting. Examples of in-kind contributions include donated professional services, facilities, food, supplies, equipment, transportation, and other non-cash support received by the organization. Be sure to include in your supporting documentation the nature of the contribution, valuation methodology, donor information, and the related program or functional area benefiting.

10. Maintain Program-Level Finance Reporting

The accounting records should be maintained and reported on a program basis. Instead of recording revenues/expenses at the organization-wide level, program-basis accounting tracks and assigns revenues/expenses to the specific programs, services, or activities carried out by the organization. This allows for evaluation of the financial performance and cost of each program and facilitates the preparation of required functional expense and programmatic reporting disclosures.

Audit Planning Checklist for Georgia Nonprofits

Georgia nonprofit leaders should consider the following questions {to be added as a downloadable list – see other attachment}:

• • Did the organization solicit charitable contributions in Georgia?
  • Did the organization receive or collect more than $500,000 in contributions during the preceding fiscal year?
  • Did the organization receive or collect more than $1 million in contributions during the preceding fiscal year?
  • Did the organization expend $1 million or more in federal awards?
  • Did the organization expend $100,000 or more in funds that may trigger Georgia Department of Audits and Accounts reporting?
  • Do any grant agreements require audited or reviewed financial statements?
  • Do the bylaws or board policies require an audit?
  • Does a lender, donor, or funding agency require an audit?
  • Are restricted funds properly tracked?
  • Are monthly reconciliations current?
  • Are board minutes, approvals, and governance documents organized?
  • Is the organization’s Form 990 consistent with its financial statements?

If the answer to any of these questions is yes, the organization should review its audit requirements with a qualified CPA before the filing or reporting deadline approaches.

When Should a Nonprofit Contact an Auditor?

Nonprofits should contact an auditor as early as possible, ideally before the fiscal year ends or shortly after year-end close. If you are aware of audit requirements, particularly those that may occur annually, waiting until a grantor, regulator, or board member requests audited financial statements can create unnecessary pressure.

Early planning is essential to give the organization time to understand documentation requests, clean up accounting records, review internal controls, and prepare schedules and reconciliations. It also gives you ample time to meet filing, grant or reporting timelines as well as timelines from board or finance committees.

For nonprofits with federal or state funding, early planning is especially important because compliance testing may require additional documentation beyond standard financial statement audit procedures.

Conclusion

Georgia nonprofit audit requirements can come from several places, including state charitable solicitation rules, federal award requirements, state funding rules, grant agreements, and internal governance documents. Because these requirements are not interchangeable, nonprofit leaders should review their obligations annually and avoid assuming that IRS filing compliance alone is enough.

For 2026, the most important steps are to understand which thresholds apply, track contributions and federal expenditures carefully, organize financial records throughout the year, and speak with a CPA before deadlines become urgent.

A well-prepared audit process does more than satisfy a requirement. It can strengthen financial transparency, support donor confidence, improve internal controls, and help nonprofit leaders make better decisions for the organization’s future.

Looking for A Georgia Nonprofit Audit Firm?

CKH Group provides audit and assurance services for nonprofit organizations, helping leadership teams understand their reporting requirements, prepare for audit procedures, and meet compliance expectations with confidence.

If your nonprofit is unsure whether it needs an audit, review, compilation, or Single Audit, our team can help you evaluate your requirements and prepare for the next step. Reach out to CKH Group for more details.

The above article only intends to provide general financial information and is based on open-source facts, it is not designed to provide specific advice or recommendations for any individual. It does not give personalized tax, financial, or other business and professional advice. Before taking any form of action, you should consult a financial professional who understands your particular situation. CKH Group will not be held liable for any harm/errors/claims arising from the articles. Whilst every effort has been taken to ensure the accuracy of the contents, we will not be held accountable for any changes that are beyond our control.