The end of any company’s fiscal year requires additional financial labor as companies file necessary returns, reconcile the previous years’ accounts, and prepare for the upcoming year.
It’s an especially complicated time for nonprofit accounting departments, which have to tackle federal and state reporting requirements that for-profit companies don’t have to worry about.
If your nonprofit is nearing the end of its fiscal year, here are some things to keep in mind to ensure a smooth end-of-year transition.
How to Prepare for Year-End Auditing and Federal Fund Compliance
Depending on the size of your organization, your auditing process will look different.
Your nonprofit might need to submit a Single Audit, a form of audit required by the Office of Management and Budget. It ensures your organization is using federal funds correctly and meeting all relevant federal program requirements.
These generally take place shortly after the end of your organization’s fiscal year, which makes year-end a great time to plan for them.
Not every nonprofit will need to undertake a Single Audit — and the rules for who qualifies changed recently with updates from the Office of Management and Budget. Make sure you understand where your nonprofit falls.
What Is the New Single Audit Threshold for Federal Funds in 2026?
OBBBA brought a whole new compliance checklist for nonprofits and for-profit companies alike to worry about at fiscal year-end. One of the Act’s major changes was to Single Audit thresholds.
Previously, nonprofit organizations that spent at least $750,000 of federal funds were required to carry out a Single Audit. Now, only nonprofits that spend at least $1 million of federal funds are required to perform one.
If you meet that threshold, you’ll need to have an independent third party perform a Single Audit for you each year. The third party will audit your:
- Financial statements: The third party will audit your nonprofit’s financial statements, including a required Schedule of Expenditures of Federal Awards.
- Federal program compliance: The third party will ensure your organization met the requirements of major federal programs it was a part of.
To ensure your Single Audit goes well, make sure that your financial statements are complete and up to date.
State, Local, and Internal Audits
Even if your company isn’t required to fulfill a Single Audit federally, you might still be required to perform an independent audit. Every state agency has different rules on what organizations meet the threshold for an independent audit; many of them have lower thresholds than their federal counterparts.
If you are required to perform a Single Audit, your state agency also might require you to send your results to the state’s government.
Regardless of what other audits you have to perform, it might be a good idea to run internal audits to proactively ensure your company is meeting both state and federal compliance requirements.
For instance, you could check to ensure no one’s improperly benefitting from your nonprofit — also called private inurement. Private inurement can threaten your nonprofit’s tax-exempt status.
It might also be time to complete a going-concern evaluation to ensure your company is able to fulfill its function for the next fiscal year.
How and When to File Form 990
The deadline to file a Form 990 — an information return that shows both the IRS and the public how your nonprofit operates and whether it complies with governmental standards — is 5 ½ months after the end of your company’s fiscal year and can be extended an additional six months.
But it’s still important to prepare for your Form 990 at year-end, especially since it’s public-facing. Not only does the IRS use it to determine whether you can keep your tax-exempt status, but potential donors can and will use it to decide whether to donate to your organization.
Depending on the size of your organization, you might be able to file an abbreviated version of a Form 990. The thresholds are as follows:
- Gross receipts less than or equal to $50,000: Eligible for a Form 990-N. Also called an e-Postcard, this Form only requires basic information from your nonprofit.
- Gross receipts above $50,000 but below $200,000 with assets under $500,000: Eligible for a Form 990-EZ. This form is longer than a Form 990-N, but it’s still abbreviated compared to a full Form 990.
- Gross receipts equal to or above $200,000 or assets equal to or above $500,000: Must file a Form 990. This is the full, standard form.
- Private foundations must file Form 990-PF instead. This is a version of the Form 990 tailored to private foundations instead of public charities; it’s around the same length as a standard Form 990.
If you’re a public charity, you can still choose to file a full Form 990 even if the IRS doesn’t require you to.
To file, you’ll need to ensure you have complete information about your organization’s assets, donations and grants received, and board and leadership makeup. If your organization is required to undergo regular independent audits, you can use their reports to help file your Form 990.
Keeping Track of Your Nonprofit’s Finances Year-Round
Fiscal year-end is a great time to make plans for how to manage your finances year-round. In turn, actively managing your finances throughout the year can make year-end financial management much easier.
For example, using year-end to start succession planning for your nonprofit — even if you aren’t anticipating leadership changes — can make sure you’re prepared even in unexpected situations.
And, while not strictly financial in nature, disaster planning can help prevent financial consequences down the line for not having plans in place to deal with natural disasters, cyberattacks, or any other major unexpected issue your nonprofit could face.
On the flip side, making sure your bookkeeping is up-to-date and tracking things like receipts, donor gifts, and grant awards regularly as they appear can save you a headache when it comes time to report them.
How Landmark CPAs Can Help Your Nonprofit Grow
If fiscal end-of-year has your nonprofit feeling overwhelmed, Landmark CPAs is here to help.
Landmark has worked with nonprofit organizations for over 70 years. Its financial professionals can help you through everything from grant compliance to 990 filing and reporting requirements, making sure your organization is ready for yearly audits.
Contact Landmark CPAs today to make sure your nonprofit is ready for whatever comes next.
