What it is
Nonprofit audits are driven by donor restrictions and the timing of contribution revenue. The auditor traces each gift and grant to its terms, decides whether it is conditional or unconditional, and follows restricted money to the spending that releases it.
This checklist covers contributions and net assets, grants and government funding, functional expenses, liquidity disclosure and the other areas a nonprofit file usually needs. It points to the relevant ASC 958 topics.
When to use it
- Planning an audit of a charity, foundation, association or other not-for-profit.
- Reviewing a file for contribution and net asset classification.
- Deciding early whether federal award spending triggers a single audit.
What’s inside
- Revenue stream split between ASC 606 and ASC 958-605
- Conditional versus unconditional gifts, pledges and refundable advances
- Net assets with and without donor restrictions and releases
- Government grants, indirect rates and subrecipients
- Functional expense allocation, liquidity and cash flow presentation
Standard cited
This template follows ASC 958 / AU-C 330. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 330 explained.
Questions
How do I tell a conditional contribution from an unconditional one?
Look for a barrier that must be overcome before the recipient is entitled to the funds, plus a right of return of the asset or release of the promisor’s obligation. If both exist the contribution is conditional and revenue waits until the barrier is met (ASU 2018-08).
Is a board designation a donor restriction?
No. Only a donor can impose a donor restriction. A board designation stays in net assets without donor restrictions and is disclosed as designated.
When does a nonprofit need a single audit?
When it expends $1,000,000 or more in federal awards in a fiscal year (2 CFR 200.501; the threshold was $750,000 for fiscal years beginning before October 1, 2024). Count expenditures early in planning.
Related templates
- GAAP Disclosure Checklist (Private Company, Short Form)
- Communication With Those Charged With Governance (AU-C 260)
- Fraud Inquiry and Brainstorming Documentation (AU-C 240)
Last updated 11/05/2026. All free templates.