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Massachusetts moved its reporting thresholds in November 2024. An organization that filed an audit last year may need only a review this year, and a smaller one may need neither. Check the line before you commission audit services.
M.G.L. c.12 §8F
Changed November 20, 2024
Review threshold
Audit threshold
Applied by the Attorney General in the Charity Portal
01Thresholds
A public charity operating or soliciting in Massachusetts registers with the Attorney General's Non-Profit Organizations/Public Charities Division and files Form PC each year. On November 20, 2024, Massachusetts lawmakers changed the figures in M.G.L. c.12 §8F, and the Attorney General updated the Charity Portal (Massachusetts AGO).
| Gross support and revenue | What you file with Form PC |
|---|---|
| More than $1,000,000 | Audited financial statements |
| More than $500,000, up to $1,000,000 | A CPA review report |
| $500,000 or less | Neither an audit nor a review |
Massachusetts raised the review threshold from $200,000 and the audit threshold from $500,000. The Attorney General now applies the new figures in the Charity Portal. Check an older unfiled return in the portal before assuming the new thresholds apply to it.
Count contributions, grants, program service revenue, investment income and other revenue toward the figure. Massachusetts lawmakers excluded gains and losses from selling a capital asset, so an organization that sold property during the year may be on a different line than it expected.
The AGO exempts private foundations that file Form 990-PF with the IRS, trusts filing probate accounts with the Division, and certain trusts audited by state and federal agencies from the audit and review requirement (Massachusetts AGO). Those organizations still file Form PC.
A non-federal entity that expends $1 million or more in federal awards during its fiscal year must have a Single Audit or program-specific audit, for fiscal years beginning on or after October 1, 2024 (2 CFR 200.501). Calculate that test on federal awards expended, separately from the Form PC thresholds.
02Levels of assurance
CPAs provide three levels of assurance and charge different amounts for each engagement. The recipient decides which level you need.
In an audit we express an opinion on your financial statements at a high level of assurance.
In a review we reach a conclusion drawn mainly from inquiry and analysis, at a limited level of assurance.
In a compilation we present your statements with a compilation report and no assurance.
The Division does not accept compilations with Form PC (Massachusetts AGO), so you can use a compilation for a lender or a board but not for the Attorney General.
Ask the recipient which one it accepts, in writing, before you price anything. A lender and the Attorney General can set different levels for the same organization in the same year.
03Filing dates
Charities file Form PC four and a half months after fiscal year-end. The Division grants registered charities in compliance an automatic six-month extension and does not require a written request. Since September 1, 2023, the Division has required portal filings and no longer accepts paper (Charity Portal).
Finish the audit or review before filing Form PC, attach the required federal return and measure any extension from the original due date. Work backward from the filing deadline to choose the fieldwork date.
Bring the timetable to us before your fiscal year closes where you can. We need longer for a first engagement than for a recurring one, and December year-end charities compete for the same filing-season capacity.
The Form PC timetable
Fiscal year end
Plan fieldwork before the year closes
Audit or review complete
Finished before Form PC is filed
Form PC due
Four and a half months after year-end
Automatic extension
Six months, no written request
Portal filing only since September 1, 2023
04Independence
Massachusetts requires financial statements filed with Form PC to be audited by an independent certified public accountant (Massachusetts AGO). You need an auditor who meets a technical independence test. Check these points before you appoint anybody.
A firm may provide bookkeeping and audit services if the arrangement does not impair independence, so the practice that writes up your books must assess its position before signing the audit.
A firm that manages your investments or sells you financial products faces a separate independence question on the same engagement.
A board member or an employee cannot perform the engagement, whatever their credentials.
We assess this at acceptance and give you the answer before you commit. If we cannot meet the test, we say so and help you brief another firm.
05Our services
Choose the level the recipient will accept.
Statements for Form PC, and for the boards and funders who ask for them.
For companies with a lender, a buyer or a shareholder agreement requiring audited statements.
Bookkeeping, payroll and tax services you may need alongside an audit.
Send us the request you received and your latest statements so we can identify the engagement and build your document list.
06Readiness
Have these items ready before fieldwork. If any is missing, expect a later completion date.
Tell us before we agree a timetable if the books are behind. Cleanup is a separate engagement, and an auditor who cleans up the books must check independence first. Our bookkeeping service is available where independence rules allow.
Before fieldwork
07Pricing
We price audit services around your organization's size, record quality, reporting framework, locations and funds, prior audit history, and deadline. Send us the request and current financials so we can scope the work.
08Scope
Auditors work to a defined scope. These points fall outside it:
We cannot guarantee that an audit will find fraud. Auditors seek reasonable assurance, which is high but short of certainty.
We do not express an opinion on your internal controls. An opinion on controls is a separate engagement with its own report.
We do not prepare or file your tax return, and the IRS can still examine the return after a clean opinion (IRS guidance).
We do not value your organization or test every transaction.
If one of those is what somebody asked for, tell us and we will scope that instead.
09Multi-state
A charity soliciting outside Massachusetts may need to register and report in other states, and the thresholds differ. New York requires an audit above $1,000,000 in gross revenue and support (New York AGO). Texas has no general charity audit filing rule (Texas AGO). One set of audited statements may support several filings, but each state's rules still govern. We also handle multi-state payroll compliance for organizations working across New England.
Massachusetts AGO
Massachusetts
Review above $500,000, audit above $1,000,000
New York AGO
New York
Audit above $1,000,000 in gross revenue and support
Texas AGO
Texas
No general charity audit filing rule
Send us your gross support and revenue figure, your fiscal year end and the request itself. We will tell you which of our financial statement audit services you need before you commit.
