Form 990 Review by Sherri Rose, CPA nonprofit auditor
Part of a nonprofit organization’s board of director’s and management’s fiscal responsibility is a review of the information return, form 990. The review ensures the organizations details and results of operations are informative and accurate.
Form 990 is a public document. Organizations like Guidestar publish forms 990 to help donors research nonprofits they wish to support. Thus, the board should ensure information about their organization is reflective of what they want to communicate to potential donors. As a nonprofit auditor, I often prepare the form 990 using information gained during the audit and from the Organization’s website. The mission statement, program descriptions, notes and checklist should be reviewed with a critical eye, not only for accuracy, but also for messaging. For instance; do the questions on Governance, found on page 6, reflect an organization that is well governed with appropriate policies and procedures in place?
The board will also want to look at the numbers not only for accuracy but also for appearance of a well-managed organization. Are administrative and general expenses reflective of an organization that uses it’s funding on it’s mission when those expenses are compared to program expenses? Consider the ratio of each to total expenses.
Clients using Sherri Rose, CPA as their nonprofit auditor receive a draft of the 990 for review. The 990 is filed with the IRS upon receipt of approval. Checklists for reviewing the 990 should be developed by the board so items of consideration are not overlooked due to deadline pressures.
Contact us, nonprofit auditors, to discuss your audit and reporting needs.