Smaller charitable organizations with less than $500,000 in revenue no longer will be required to have annual audits done by a certified public accountant (CPA), which cost an estimated $5,000 to $10,000 or more, consuming much of the agencies’ funds.
That is the result of legislation sponsored by state Rep. Marilyn Giuliano and developed collaboratively with the office of the state Attorney General and the Department of Consumer Protection. Prior to this legislation, non-profit agencies with as little as $200,000 in revenues were required to pay for expensive annual audits performed by certified public accountants.
By law, all charitable organizations that solicit funds must register and file annual financial reports with the Department of Consumer Protection. Organizations above the gross revenue threshold must also file an audit report prepared by a certified public accountant.
The CPA audit threshold of $200,000 was set many years ago, and has not been adjusted for inflation.
Rep. Giuliano said, “There are more than a thousand charitable groups in Connecticut, performing important community services, helping people who are sick, needy or with mental illness. Many small groups raise funds for schools, libraries or arts organizations.”
“Relieving the financial burden of a CPA audit is one small step in encouraging these smaller charities to continue with the good work that they do, especially in hard economic times,” Rep. Giuliano added.
Rep. Giuliano noted that charities in Shoreline and lower Connecticut River towns provide community services at little or no cost to the municipalities and thereby help hold down taxes for local property taxpayers.
The bill also authorizes the commissioner of consumer protection to waive the audit requirement and waive or reduce late fees by written request showing good cause. Under current law, he may grant a 180-day extension to late filers; the bill allows him to grant up to six months. By law, the $ 25 per month late fee is not due in extension months.