What Nonprofit Auditors Request: A Full Audit Prep List

Knowing what auditors will request before they request it is the primary lever for audit efficiency. Every item on an auditor’s PBC list exists for a specific reason — it supports a specific audit procedure or helps auditors evaluate a specific risk area. Understanding the logic behind the request list helps organizations anticipate what is coming and maintain the relevant documentation throughout the year.

The Standard Audit Request Categories

General Ledger and Trial Balance

The general ledger is the foundational document for any financial audit. Auditors use it to:

• Identify large and unusual transactions for further testing
• Verify that all accounts are classified consistently
• Trace amounts from the financial statements to underlying transaction detail
• Search for journal entries that may indicate error or manipulation

Provide the full general ledger — every transaction for the audit period — in a format that can be sorted and filtered. Excel is preferable to PDF for detailed ledger export. The trial balance (the summary of all account balances as of year-end) should tie directly to the draft financial statements.

Bank and Investment Accounts

What auditors need:

• Bank statements for all accounts for every month of the audit period
• Bank reconciliations for every month, signed and dated
• Investment account statements (monthly or quarterly as available)
• Support for any unusual transactions identified in bank statements

Why: Cash and investment balances are confirmed through third-party bank confirmation (auditors send confirmation letters directly to banks) and through tracing between statements, reconciliations, and the general ledger. Reconciliations that are unsigned or undated, or that consistently have reconciling items that roll forward unresolved, require explanation.

Revenue and Contributions

What auditors need:

• Contribution listing showing donor name, date, amount, and restriction status for all contributions received
• Grant award letters and agreements for all active grants
• Pledge documentation for multi-year pledges
• Documentation of any programmatic revenue (program service fees, ticket sales)
• Acknowledgment letters sent to donors above $250

Why: Auditors test that contribution revenue is recorded in the correct period and at the correct amount, and that restricted contributions are properly classified. For grant-heavy organizations, the grant agreement is the source document that defines what was received and what restrictions apply.

Federal Grant Compliance (Single Audit)

What auditors need:

• SEFA draft for review and reconciliation
• Grant agreement and all amendments for each major program
• All SF-425 reports submitted during the audit year
• Budget-vs-actual report for each major program
• Procurement documentation for major contracts under each program
• Time and effort records for all employees charging time to federal programs
• Effort certifications
• Subrecipient agreements, monitoring records, and audit reports if applicable

Why: Single audit compliance testing requires auditors to evaluate whether the organization followed the specific requirements of each major federal program — not just whether the financial statements are accurate. The documentation they request supports testing of the specific compliance requirements in the OMB Compliance Supplement for each program.

Payroll and Personnel

What auditors need:

• Payroll registers for all pay periods in the audit year
• Annual payroll reconciliation showing gross pay per register ties to W-2 totals
• Quarterly 941 federal payroll tax returns
• Documentation of fringe benefit rates or actual fringe costs
• Time and effort records for federally funded employees
• Employee census with position titles, hire dates, and pay rates

Why: Payroll is typically the largest expense category for nonprofits. Auditors test that payroll amounts are supported by authorized pay rates, that payroll taxes are correct and remitted on time, and that time allocations to grants are supported by adequate time records.

Accounts Payable and Expense Testing

What auditors need:

• Accounts payable aging as of year-end
• Invoices or contracts for a sample of transactions selected by the auditor
• Documentation for any accrued liabilities
• Expense reports for executive travel and business expenses

Why: Expense testing verifies that expenditures are properly supported, appropriately classified, and within organizational policy. For grant-funded organizations, auditors also test that sampled expenditures are coded to the correct grants and meet the allowable cost standards.

Fixed Assets

What auditors need:

• Fixed asset schedule with beginning balance, additions, disposals, and ending balance by category
• Invoices or contracts supporting all additions above the capitalization threshold
• Depreciation calculation and schedule
• Appraisals or other support for donated assets recorded at fair value

Why: Fixed asset balances affect the balance sheet directly and depreciation affects the income statement. For federally funded organizations, equipment acquired with federal funds has additional compliance requirements (property management standards, disposition requirements).

Board and Governance

What auditors need:

• Board meeting minutes for all meetings during the audit year
• Committee meeting minutes for finance committee and audit committee if separate
• Approved budget for the audit year
• Conflict of interest disclosures signed by directors and officers
• List of related parties (individuals and entities with relationships to board members)

Why: Board minutes verify that significant transactions were properly authorized, that the budget was approved, that conflicts of interest were disclosed and managed, and that there are no undisclosed contingencies or commitments. Auditors use the related-party list to test transactions that may not have been conducted at arm’s length.

What “Audit-Ready” Means in Practice

Audit readiness is not a destination — it is an ongoing condition. An organization is audit-ready when:

• Every transaction in the general ledger has supporting documentation that can be located within minutes
• Bank reconciliations are current and signed
• Restricted fund balances reconcile to grant tracking records
• Time and effort records are current for all federally funded employees
• The fixed asset schedule is current and additions are supported
• Board minutes are approved and filed within 30 days of each meeting
• Key policies exist and are documented (procurement, time and effort, capitalization, conflict of interest)

An organization that maintains this state year-round can assemble the PBC response in 1–2 days. An organization that does not maintain this state spends 2–3 weeks assembling it — and still typically delivers an incomplete response.

Typical Audit Timeline

For single audits, add 2–4 weeks for compliance testing procedures and an additional 1–2 weeks for the single audit report package preparation. Federal single audits must be submitted to the Federal Audit Clearinghouse within nine months of fiscal year-end.

Organizations that deliver a complete PBC response on time, answer auditor questions promptly, and do not have undisclosed accounting issues typically experience the shortest end-to-end timelines. Delays compound — a late PBC response delays everything that follows.