https://www.mca-cpa.co/blog-3-1 daily 0.75 2026-10-05 https://www.mca-cpa.co/blog-3-1/introduction-to-grant-accounting-series monthly 0.5 2026-10-05 https://images.squarespace-cdn.com/content/v1/67b5fd3bfcd8361c9040fd81/994e24a9-8fa0-44b3-af68-d9ee064acdb1/Stocky+the+Squirrel+-+Small.JPG Blog - Introduction to Grant Accounting Series - This series is for anyone interested in grant accounting: it contains information I would have liked to know before serving as a grant accountant or performing single audits as an auditor. It’s primarily formatted for small to midsized nonprofits who are using Quickbooks or a related software that is not fund accounting (Stay tuned for a blog on what is fund accounting). What makes me an expert? I’m a CPA who got into accounting to help nonprofits, and have spent most of the last 15 years doing just that. I was a grant accountant for a mid-sized nonprofit, tracking 30-40 contemporaneous grants in a Quickbooks environment. Before and after that, I was an auditor who has performed many single audits. I’m not the most “expertly” expert out there, but want to be! For now, I will settle for helping my dear audience learn these things the easy way, the way I wish I had learned. To that end, feel free to reach out on any tips, inconsistencies or questions – I will be keeping this blog series updated as much as possible, and I appreciate your help in doing so. So why are you here? Maybe it’s a new revenue stream for your nonprofit, or maybe you are new to a nonprofit with grants, either as an employee in a finance-related role, or an outsourced bookkeeper who hasn’t had much experience in this area. Or, maybe you are a new auditor who is staring down the business end of your first single audit. At any rate, it’s a new environment with its own concepts and challenges. Tracking grants can be tricky and is full of complicated context and grey areas – but ANAPF has some Best Practices in Grant Management that you should be aware of first. I hope I can shed some light on the complexity of the rest of it, through this series, although I can warn you in advance: you are going to get tired of me answering a lot of questions with “maybe.” This blog series contains following sections, which will be updated with links as I finish them (so feel free to check back): 1. The pre-award period 2. Recording the grant award 3. The mature grant: expenses and revenues 4. Closing the grant https://www.mca-cpa.co/blog-3-1/what-to-expect-from-your-auditor monthly 0.5 2026-10-05 https://images.squarespace-cdn.com/content/v1/67b5fd3bfcd8361c9040fd81/57e36640-36b4-418f-87fe-39d87722229d/Naomilibri+-+Small.JPG Blog - What to expect from your Auditor - One thing I encounter among my clients is that they don’t know what to expect. Accountants in general are terrible communicators; if you’ve worked with them in a client relationship, imagine what they must be like as bosses and coworkers! But seriously, my apologies. It is something I want to change in my small way. First, the selection of the auditor is the responsibility of the board, particularly the finance/audit committee, if applicable. See this excellent National Council of Nonprofits article for more. The ED, management or other employees may have a part in the selection (or manage that continuing relationship) only at the board’s discretion. That said, with most of my clients I work 99% with the ED or finance team. But if you have comments or questions about your organization’s relationship with the auditor, you should talk to your ED or board, as applicable. The selection process is once again best explained by a NCN article, we’re more concerned here with what you’ll be dealing with after that step. Let’s clear up some terminology: - Audit: technically there are audits and “attestation” engagements. Casually, they are collectively referred to as audits, which is confusing. We will use that term in the casual sense and specify when we are using “audit” as opposed to “attestation.” Likewise, the professional who performs attestations will generally be referred to as an auditor. - Financial statements: we generally refer to “formal financial statements” in respect to the final product of an audit, which are published financial statements with footnotes in an appropriate basis of accounting including the Independent Accountant’s Opinion Report. This is as opposed to the balance sheet and P&L you may get out of your bookkeeping software, which can also be referred to as financial statements. I am afraid there is no accepted terminology which makes this less confusing. - Certified Public Accountant (CPA): if you’re getting an Audit or “Review” (one of the aforementioned attestation engagements), there will a Certified Public Accountant at the top of the chain of command of the auditing team, even though you may not interact with them. Although accountants who are not CPAs can do the majority of your audit, and provide many other services, the CPA designation is still required to sign off on the opinion report on those formal financial statements. - Independence: Auditors must be independent in appearance and in fact. That’s why you can’t hire your uncle Chad, for starters (sorry, Chad), but it influences many aspects of the audit. https://www.mca-cpa.co/blog-3-1/how-much-does-a-nonprofit-audit-cost monthly 0.5 2026-10-05 https://images.squarespace-cdn.com/content/v1/67b5fd3bfcd8361c9040fd81/ba8cf3d8-f5bd-4d73-89f4-cd7650e146aa/Sparky+the+Bear+-+Small.jpeg Blog - How much does a Nonprofit Audit cost? - First of all, a note on our terminology: accountants and non-accountants alike tend to use the term “audits” as shorthand for “audits and attestations,” which also include Reviews, Compilations and other organizations, as you will see in a lot of my other blogs. However, here we will use the term “audit” in reference to financial statement audits, with a note at the end about Reviews and Compilations to help you consider alternatives when you use our Nonprofit Audit Estimate Calculator. Even from the inside of the accounting industry, with 15 years of auditing experience, pricing for new clients is a mystery. So if you are out there looking for answers, and not finding any, you are not alone. To that end, Making Change Accounting (MCA), spent a great deal of time working on a pricing model for our own purposes. Since our priority is community over profit, we are making that model available to you, with the option to consult with us if you are interested in a formal proposal. That said, my model comes with some caveats, which are listed in the Nonprofit Audit Estimate Calculator. · This is only an estimate, not a quote. · For a quote, the auditor will generally examine your most recent financial statements or records, and 990s. The auditor may anticipate extra costs for multiple locations, first-year audits, or complex areas such as (but not limited to) investments, leases, restricted net assets, pledges, benefit plans or endowment funds. · Most of our experience is with organizations with less than $5 million in annual revenues and fewer than 50 employees, with most of the remainder being under twice those thresholds. The more the organization exceeds these thresholds, the more the model seems to overprice the related estimate, in our experience. We would love to hear your feedback so we can improve this model. · In theory, an auditor audits an already existing set of financial statements and notes. In practice, auditors will frequently prepare these financial statements and notes, though it is considered a service that threatens our independence without adequate safeguards. This estimate included auditor-prepared formal financial statements and notes and the existence of those adequate safeguards. If you are capable of preparing your own financial statements, you may get a slightly lower price. https://www.mca-cpa.co/blog-3-1/cash-modified-cash-and-gaap-financial-statements-what-do-they-mean monthly 0.5 2026-10-05 https://images.squarespace-cdn.com/content/v1/67b5fd3bfcd8361c9040fd81/ac4cc4fd-c7e5-4bc5-8c5d-d0de40e19576/Quilly+-+Small.JPG Blog - Cash, Modified Cash and GAAP - In practice, the most common bases of financial statements in the US are these three options, though there are special frameworks for special situations. But let’s pretend that those don’t exist for now. Cash Basis – under this basis of accounting, all transactions are recorded on the timing of “cash receipts and disbursements,” and those terms will be used in lieu of “revenues and expenses.” What that means is that the nonprofit balance sheet will generally have only one asset (cash) and one equity/net assets line, which may be called “Net Cash Balances” or something similar. Since noncash transactions are not recognized, there will be no accounts payable or receivable, no prepaid or accrued expenses, no fixed assets or related depreciation, etc.: all of these are accrual-type accounts. The profit and loss may be called something like the “Statement of Cash Receipts and Disbursements,” for instance, and the Statement of Functional Expenses may be renamed the “Statement of Functional Cash Disbursements,” but the formats will be similar to what you are used to, if you have experience with financial statements. Obviously, there will not be a Statement of Cash Flows, since the Statement of Cash Receipts and Disbursements will already track the change in the cash accounts. Modified Cash Basis is just cash basis plus modifications, as the name suggests. Generally, these modifications selected should “provide a benefit or an obligation that covers multiple reporting periods,” such as the capitalization of certain fixed assets with the corresponding depreciation or investments in marketable securities acquired with cash. The idea is that without the modifications, the financial statements will be inconsistent, misleading or unreliable, but such exceptions should be chosen judiciously. Per an AICPA practice aid, “the preparer should be prepared to defend how the decision to modify or not modify is a logical and consistent application of the accounting policy and does not result in misleading financial statements for the purposes for which they are intended,” and they make some clear exceptions, as well warning against a “free-for-all” method of preparing such financial statements that end up looking like GAAP accounting except for the titles of the financial statements and the explanations in the footnotes. For instance, let’s say your nonprofit has a large note payable in this year, but traditionally reports on a cash basis. That note payable may be an appropriate item to modify the cash basis, but that does not mean that you should also be adding accounts payable and accrued payroll liabilities, unless their absence also makes the financial statements inconsistent, unreliable or misleading. Depending on the modifications made, the statements may have titles similar to those of cash or GAAP statements, and they could include a statement of cash flows. https://www.mca-cpa.co/blog-3-1/single-audits monthly 0.5 2026-10-05 https://images.squarespace-cdn.com/content/v1/67b5fd3bfcd8361c9040fd81/1788197575410-6I1S3WEETV9SLTW7V4Q2/OctoEfra+-+Small.JPG Blog - Single Audits - Single Audits are compliance audits required by law for recipients of federal grants that expend more than a certain amount of grant funds in a given fiscal year - currently $1 million. Note that “expend” is just a fancy word for ‘spend’ which has some extra technical meaning in this context which I hope you never have to learn, and I wish I could afford to forget. Although single audits are complicated, before the Single Audit Act, each grant was tested separately; the “History” section of this Wikipedia entry can tell the story better than I can. Since the passage of that act, Single Audit procedures examine the whole landscape of grants that a grantee receives, selecting a sample of those grants to test and testing each of those grants according to complicated mix of rules that are both general and specific. The “how to” of that could fill many books; in fact, the latest OMB Compliance Supplement (which details specific compliance requirements and audit procedures for testing federal programs during a Single Audit) released by the OMB was 2,208 pages long. And one more thing: it’s always published extremely late. Not every auditing firm will perform them, and fewer will perform them well.‍ ‍ Since single audits are very specialized, complex, and context-heavy audits in a constantly changing regulatory environment, a lot of CPA firms will steer clear of them. A lot of the firms may be doing them only for a handful of legacy clients, and not keeping up with changes. For instance, I often hear accountants still refer to OMB Circular A-133; that circular was replaced in 2014 by Title 2 of the Code of Federal Regulations (CFR), part 200 (“2 CFR 200”), which also referred to as “Uniform Guidance.” Since then, the rules have changed considerably. It would be fair to ask any prospective auditors about their knowledge of single audits, how many they have performed and how many of them they perform each year, or give them bonus points if they have ever audited your specific grants. https://www.mca-cpa.co/blog-3-1/ww3t9dhpv2la866gavimcdqimrjvr3 monthly 0.5 2026-10-05 https://images.squarespace-cdn.com/content/v1/67b5fd3bfcd8361c9040fd81/a9248060-cbc2-4d04-b2cc-f44c18d2a590/Loony+Marissa+-+small.JPG Blog - Communication as the Soul of Community - In my opinion, using AI to craft client written communications in this day in age is all bad and no good. Your donors, clients or customers are hungry for authenticity, and as AI is becoming the default in communication, that authenticity is getting harder to find. This loon doesn’t want to be angry, but you know how it is. https://www.mca-cpa.co/blog-3-1/an-accountant-is-born monthly 0.5 2026-10-05 https://images.squarespace-cdn.com/content/v1/67b5fd3bfcd8361c9040fd81/dcffb6cf-da5c-42fc-83b3-03393f6c2ea4/Cptn+Fiscal+Furr+-+Small.JPG Blog - An Accountant is Born - I enjoyed building and launching my business because it reminded me all the time how grateful and lucky I am to have found my calling in this world. It seems like an accident at times that I became an accountant in the first place, but I certainly didn’t become a nonprofit accountant by accident. But let me start from the beginning. 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