Author Archives:
Erin Carter

Nonprofit organizations that receive federal funding often take on added financial and compliance responsibilities. For nonprofits, state and local governments, and other federal award recipients, those responsibilities may include undergoing a single audit. Being prepared for a single audit is a year-round process, and organizations that take a proactive approach are generally better positioned when the audit begins.

Employee benefit plans (EBP) are important tools for employee recruitment and retention. They also come with clear requirements and government regulations under ERISA. Many plans must undergo an annual independent audit that depends on information from human resources, finance, payroll, and several outside service providers. Plan sponsors can take a more proactive, year-round approach to these EBP audits. This can make it easier to respond to the auditor as well as allow more time for remediation when necessary.

The IRS has recently clarified that plan sponsors will have additional time to adopt certain required plan amendments under the SECURE Act and SECURE 2.0 Act. Although previous guidance established a general December 31, 2026, deadline for many SECURE-related amendments, some required changes. It is important to note; the clarification does not eliminate the 2026 deadline. Discretionary amendments for optional provisions a plan sponsor chose to implement generally remain due December 31, 2026. As year-end approaches, plan sponsors should understand which amendments require action now and which will have more time.

Nonprofits often manage several programs at the same time. Each may have its own funding sources, expenses, restrictions, and reporting requirements. Nonprofit leaders need to understand the financials of each program. What does each major program cost? How is it funded? Is spending consistent with the budget and funding requirements? And what does the organization accomplish with that investment?

A thriving nonprofit can have grants awarded, pledges committed, and revenue reflected in its financial statements and still be short on cash. The issue is often not whether funding exists, but whether it is available when the organization needs it. Cash flow management helps nonprofit leaders understand what cash is available today and what cash flow looks like on the horizon. Several strategies can help nonprofits manage cash flow more effectively.

Americans donated an estimated $617.2 billion to charitable organizations in 2025, according to a recent report by Giving USA. The increase reflects continued support for the nonprofit sector, but many organizations are still managing rising operating costs, greater demand for services, and ongoing funding uncertainty. In that environment, timely financial information is critical to the mission. Leadership needs to know how the organization is performing while there is still time to respond, not weeks after the month has ended. That starts with an effective month-end close.

Federal grants are divided into different budget categories, and each one comes with its own compliance requirements. Participant support costs are one of those categories. The Uniform Guidance includes rules about which costs qualify, what activities they can support, and who can be treated as a participant (2 CFR 200.456). Not every federal award includes participant support costs, but when they do, auditors usually spend time reviewing them during a Single Audit. Organizations that understand the requirements before the audit are generally in a much better position to show that the funds were used appropriately.

Many nonprofits have enough funding to support the mission. The challenge is that funding doesn’t always arrive when it’s needed, and it isn’t always ready to pay day-to-day operating expenses. This can create unexpected and unwanted complications and underscores the importance of proper cash flow management. A complete assessment of when expenses need to be paid along with expected revenue can set management up to better understand when cash needs to be available to meet obligations. Managing these timing differences will help the organization serve its community without interruption.

In February, the Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) tariffs enacted in early 2025 could not remain in effect. That ruling did not automatically trigger refunds. However, the Court of International Trade (CIT) later ordered that eligible importers receive refunds of those duties plus interest, setting off one of the largest customs refund efforts in recent history. 

Employee benefit plan audits are an annual requirement for many organizations that sponsor retirement or benefit plans and meet certain size thresholds. These audits exist to help protect plan participants and ensure that assets are handled in accordance with regulations. The audit is performed by an independent CPA firm, separate from the organization’s internal accounting function, and understanding what auditors look for is the first step to maintaining compliance.