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New Mexico and Mississippi Ease Audit Requirements
A majority of states require some charitable organizations to submit audited financial statements each year. These audits are needed in connection with charitable registration. Nonprofits who solicit in multiple states must comply with multiple state audit requirements. The specific threshold requiring a charitable organization's submission of an audit varies from state to state. Charitable organizations operating in Mississippi and New Mexico will soon find it easier to meet state audit requirements.
Changes to Audit Requirements
The change to New Mexico's audit requirement raises the state's audit threshold from $500,000 to $750,000. Now only charitable organizations with total expenses over $750,000 must be audited by an independent certified public accountant. New Mexico Senate Bill 240 is effective January 1, 2024.
The new Mississippi audit requirement raises the state's audit threshold from $500,000 to $750,000. Charitable organizations with total donations over $750,000 must have an audit by an independent certified public accountant. Charitable organizations with total donations between $250,000 and $750,000 must have a financial review by an independent certified public accountant. Mississippi Senate Bill 2077 is effective July 1, 2023.
Laws requiring independent financial audits for charitable organizations vary by state. Nonprofits must track changes to audit thresholds in states where they are soliciting. Failure to submit proper financial statements to states could result in delayed filings, fines, penalties, and even loss of the right to solicit.
Please contact us for help with your compliance.
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