At Douglas County CASA, we are committed to transparency, accountability, and responsible stewardship of the resources entrusted to us by donors, private foundations, and taxpayers. As part of that commitment, every year we undergo a Financial Statement Audit (we will use the word audit through out this article, this is the specific audit we are referring to) to ensure our practices meet the highest standards. While these audits play a crucial role in building trust with donors, grantors, and the community, the annual review process comes with challenges—particularly for organizations like CASA that operate with limited time, budgets, and staff.
A Financial Statement Audit provides an independent review of an organization’s financial position. It verifies that funds are being documented appropriately, financial statements are accurate, and internal controls are in place to prevent fraud or mismanagement. For nonprofits, this is especially critical because we rely on public trust. A Financial Statement Audit can reassure donors, funders, and stakeholders that their contributions are making a real impact and that our organization is fulfilling its mission.
Additionally, a majority of grant funders and government agencies require audited financial statements as part of their funding criteria. A clean audit can open doors to new funding opportunities, allowing us to expand our programs and serve more children in need.
While the benefits of a Financial Statement Audit are clear, the process itself can be demanding, especially for a nonprofit with a small administrative team. Key challenges include:
Audits require days, sometimes weeks of preparation by our staff, bookkeepers, and board members to gather documentation and answer auditor inquiries. For a nonprofit like CASA, where our staff members wear multiple hats, dedicating time to fulfill an audit can detract attention and human resources from advocating for children in the court system.
For an organization of CASA’s budget size, the fee is about $12,000 to retain a reputable CPA firm to conduct a Financial Statement Audit. The expense of a Financial Statement Audit adds to the financial strain of funding a nonprofit. Furthermore, every dollar spent on the audit is a dollar that could have gone toward recruiting and training more CASA volunteers to serve vulnerable children.
Financial Statement Audits are designed to ensure financial compliance and accountability — but sometimes the auditing firm’s recommendations extend to a nonprofit’s operations. While well-intentioned, those recommendations may not align with the unique realities of a nonprofit’s work. Balancing compliance with the flexibility needed to operate effectively can be a challenge.
At Douglas County CASA, we accept the importance of the Financial Statement Audit and embrace it. At the same time, we recognize potential advantages of a review process that achieves greater balance between a nonprofit’s accountability and its constraints. It would save nonprofits significant time and money if grantors considered requiring an independent financial statement compilation for each grant source annually, and a more comprehensive or full financial audit every three years instead of annually. Reimagining the process and developing a simpler mechanism to meet the need for transparency would allow nonprofits to focus more of its resources on their mission.
We are so grateful to our donors, volunteers, and community partners who provide general operating support to CASA year round. Your contributions help us keep the lights on, offset the costs of the annual review process, and, most importantly, recruit and train volunteers to advocate for the best interests of children in need. If you would like to support our mission, I invite you to learn more.
Together, we can continue making a lasting impact — one child at a time.
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