Scrooge's Penny Pinching Audits

The Indiana Arts Commission and the Regional Arts Partners require a full, independent audit for application for the Artist Operating Support Level 2 Grant. The expense of this audit deters some organizations from applying at this level. The Operating Support Level 1 requires a minimum of a financial comp or review, which is less expensive to process but offers a smaller grant. Accounting firm Huth Thompson LLP put together a few tips on controlling your audit costs.

Pointers on reducing your audit costs

• CPA in bulk. Discuss with your CPA the possibility of performing a larger number of not-for-profit audits. The CPA might be willing to reduce fees if a large volume of not-for-profits engaged the same audit to perform annual audits.
• Create and prepare your own year-end financial statements and footnotes.
• Send a trail balance and general ledger in electronic format to the auditor.
• Continually update the accounting manual.
• Prepare workpapers with support for all statement of financial position accounts and meet information deadlines requested by the auditor.
• Consider a multi-year engagement with your auditor. This gained efficiency enables the auditor to take into account subsequent savings gained through efficiency. It also saves them internal costs of repeating the auditor selection process each year.
• Change from a calendar year-end to a fiscal year-end. Auditors are less busy in the summer months and tend to charge less at that time. Some organizations benefit to be on the same fiscal year as their primary grantor. Changes in year-ends are also made to allow sufficient time to align officer terms with the organization's fiscal year. Keep in mind when changing year-ends, your bylaws must be revised. The change is reported when filing Form 990. Indiana requires Form NP-20A be re-filed with a statement requesting a change in year-end.

Edited by Robyn Kelly, Web Publications Manager: rkelly@iac.in.gov.
The IAC, a public catalyst, partner, and investor in the arts, serves the citizens of Indiana by funding, promoting, and expanding the arts. Funding is provided by the State of Indiana and the National Endowment for the Arts.