Nearly all NPOs request an external audit at some point in their operations. Healthy nonprofits will seek out an audit in order to ensure that the operations of the business are both legal and contributing to the primary mission of the organization.
Some states require external audits for larger NPOs to maintain nonprofit status. Almost all audits find that some number of changes should be made to an organization. Because non-interested parties are completing the inspection, it is most often best for an NPO to follow the advice of the auditing company.
Furthermore, all Form 990 filings are subject to the Freedom of Information Act (FOIA) and must be made available to anyone who requests them. Photocopies are required to be made available at “a reasonable price.” If a request for information comes in writing, the NPO has 30 days to produce the requested information. As such, pertinent financial records should always be kept on-site to deal with the occasional audit and information request.
