Prepare a single audit package with reconciled bank accounts, grant schedules, payroll records, fixed asset register, A/R and A/P aging, and supporting documentation. Organize files in a shared folder with consistent naming and a cover index to shorten audit time and reduce findings.
Why this matters
On the go? Listen on The Deep Dive — where we dig deeper into this topic: ‘The Bulletproof Nonprofit Audit Package—Shortcut Compliance, Slash Fees, and Eliminate Findings’. Listen or download.
Audits (funder, state, or external) can be time-consuming and costly. A prepared audit package reduces fieldwork time, lowers fees, and minimizes the chance of findings. Structured files and clear schedules make responses fast and demonstrate good stewardship to funders.
Real-world story
A child-services nonprofit faced a state audit mid-year with documents scattered across inboxes and laptops. Preparing a consolidated audit package in advance saved two weeks of staff time and prevented findings related to undocumented subgrantee payments. The nonprofit built a template for future audits and assigned an audit liaison to speed responses.
Audit package — what to include
- Cover index / table of contents — Single-page index listing all schedules and file paths (makes auditor navigation easy).
- Bank reconciliations — Month-end bank recs with supporting cleared transactions and explanation for uncleared items.
- Grant schedules — Award amount, period, revenue recognized, expenses charged, remaining balance, and deliverables.
- Payroll & benefits — Payroll registers, deposit confirmations, W-2 / W-3, and benefits provider statements.
- A/R & A/P aging — Aging reports with support for large or old balances.
- Fixed asset register — Purchases, invoice support, capitalization policy, and depreciation schedule.
- Contracts & subgrantee files — Signed contracts, invoices, and proof of payments for subgrants or contractors.
- Board minutes & approval evidence — Minutes showing authorization for significant transactions or policy changes.
- Expense backup — Invoices, receipts, and approval emails for sampled transactions.
- Tax filings & returns — Federal and state returns, tax-exempt documentation (if applicable).
Step-by-step audit prep process
- Create a folder structure and cover index: /Audit/YYYY/CoverIndex.pdf, /Audit/YYYY/BankRecs, /Audit/YYYY/Grants, etc.
- Run reconciliations and produce schedules with supporting docs attached or linked.
- Document explanations for large variances or reconciling items in a one-page narrative.
- Compile grant-by-grant backup: agreements, budgets, invoices, and deliverables.
- Prepare an A/P schedule and be ready to supply vendor invoices for any sampled items.
- Run a mock audit: have a non-finance staffer request a set of typical auditor items and measure response time.
- Assign an audit liaison with defined response responsibilities and a contact list.
Audit checklist (worksheet)
Copy this table into a spreadsheet and mark items as ready. Include links to files where possible.
| Document | Path / Link | Date Range | Ready (Y/N) | Notes |
| Cover index / TOC | Drive/Audit/2025/CoverIndex.pdf | 2025 | N | Prepare before auditor arrives |
| Bank reconciliations – Main checking | Drive/Audit/2025/BankRecs | Jan-Dec 2025 | N | Include cleared items |
| Grant schedules – all active awards | Drive/Audit/2025/Grants | Jan-Dec 2025 | N | Group by fund |
| Payroll registers & deposit confirmations | Drive/Audit/2025/Payroll | Jan-Dec 2025 | N | Include tax deposit receipts |
| Fixed asset register & invoices | Drive/Audit/2025/FixedAssets | All | N | Include capitalization policy |
CSV copy (paste into a sheet)
Document,Path / Link,Date Range,Ready (Y/N),Notes
Cover index / TOC,Drive/Audit/2025/CoverIndex.pdf,2025,N,Prepare before auditor arrives
Bank reconciliations – Main checking,Drive/Audit/2025/BankRecs,Jan-Dec 2025,N,Include cleared items
Grant schedules – all active awards,Drive/Audit/2025/Grants,Jan-Dec 2025,N,Group by fund
Payroll registers & deposit confirmations,Drive/Audit/2025/Payroll,Jan-Dec 2025,N,Include tax deposit receipts
Fixed asset register & invoices,Drive/Audit/2025/FixedAssets,All,N,Include capitalization policy
Here’s a ready-to-use CSV you can open in Google Sheets or Excel.
Download the CSV — NonProfit Audit Checklist
Tips to shorten audit fieldwork
- Be proactive with links — Provide direct links to files in the cover index to save auditors time.
- Prepare sample packs — Pre-assemble vendor/invoice packs for common audit samples.
- Narratives matter — A 1-page explanation for big variances reduces auditor questions.
- Centralize communication — Use a single email thread or shared doc for auditor Q&A to avoid lost replies.
Common audit findings & how to avoid them
- Undocumented expenses — Keep invoice, approval, and payment evidence together.
- Unreconciled bank or grant balances — Reconcile monthly and resolve uncleared items.
- Missing W-9s or contracts — Collect W-9s and signed contracts for vendors and subgrants.
- Improper restricted fund usage — Code expenses to the correct fund and track restrictions in a master schedule.
Next steps
- Copy the CSV ‘Audit checklist’ into a spreadsheet and complete the Ready (Y/N) column.
- Assemble a sample package for your top 3 grants and run a mock audit internally.
Audits don’t need to be painful — they reward good preparation. Use the audit checklist above, centralize your files, and run a sample request to test response times. Want a second pair of eyes? Upload a sample package or book a free 30-minute Audit-Readiness Call and we’ll return a prioritized remediation checklist so you can show funders clean, audit-ready records.
Giesler-Tran Bookkeeping • gieslertranbookkeeping.com • 971-200-5158