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For many Connecticut nonprofits, reaching $1 million in gross annual revenue represents an important milestone. Along with organizational growth comes a higher level of financial reporting required under Connecticut’s charitable solicitation laws.

Connecticut requires charitable organizations with at least $1 million in qualifying gross annual revenue to submit an audit report prepared by an independent Certified Public Accountant (CPA). The audit is filed as part of the organization’s annual charitable registration requirements with the Connecticut Department of Consumer Protection (DCP). (Conn. Gen. Stat. § 21a-190c(b))

Unlike several other states, Connecticut calculates this reporting threshold using gross revenue, while excluding grants or fees from government agencies and revenue derived from funds held in trust for the benefit of the charitable organization. Organizations approaching the audit threshold should understand how these exclusions affect their reporting obligations before preparing their annual filing. (Conn. Gen. Stat. § 21a-190c(b); Connecticut DCP, Gross Revenue for CT Charities)

Whether your nonprofit serves Hartford, New Haven, Stamford, Bridgeport, Waterbury, Norwalk, Danbury, or communities throughout Connecticut, early audit planning can help ensure a smooth compliance process.

Connecticut Audit Requirements at a Glance

Quick Answer

If your Connecticut charitable organization reports at least $1 million in qualifying gross annual revenue, Connecticut requires an audit report prepared by an independent CPA as part of the organization’s annual charitable registration filing. Government grants or fees and revenue derived from qualifying trust funds are excluded when determining whether the statutory threshold has been reached. (Conn. Gen. Stat. § 21a-190c(b))

When Does Connecticut Require a Nonprofit Audit?

Connecticut bases its financial reporting requirements on gross annual revenue, not charitable contributions.

Organizations reporting at least $1 million in qualifying gross revenue must submit an audit report prepared by an independent CPA. (Conn. Gen. Stat. § 21a-190c(b))

Organizations with gross revenue greater than $500,000 but less than $1 million may submit either an independent CPA audit report or review report. At $1 million or more, the statute requires an audit report. (Conn. Gen. Stat. § 21a-190c(b))

Annual charitable registrations are administered by the Connecticut Department of Consumer Protection, which provides current filing guidance for registered charities. (Connecticut DCP, Audit and Review Reports for CT Charities)

Why Connecticut Calculates Revenue Differently

Connecticut’s reporting law differs from many other states because not every dollar received by a nonprofit counts toward the audit threshold.

When determining whether the organization has reached the audit threshold, Connecticut excludes the following categories from gross revenue: (Conn. Gen. Stat. § 21a-190c(b))

• Government grants
• Government fees
• Revenue held in trust for others

These exclusions can significantly affect whether an organization must obtain an audit during a particular fiscal year. Nonprofits receiving substantial governmental funding or administering funds held in trust for their benefit should carefully evaluate the statutory calculation before concluding that the audit threshold has been met. (Connecticut DCP, Gross Revenue for CT Charities)

This approach makes Connecticut’s reporting law more nuanced than states that simply measure total contributions or total revenue.

Connecticut Law at a Glance

Connecticut administers charitable registrations through the Department of Consumer Protection, and its financial reporting requirements increase as nonprofit organizations grow. (Connecticut DCP, Audit and Review Reports for CT Charities)

One feature that distinguishes Connecticut from many states is the intermediate reporting level. Organizations with gross revenue greater than $500,000 but less than $1 million may file either a CPA review report or audit report. Organizations with at least $1 million in qualifying gross revenue must file an audit report. (Conn. Gen. Stat. § 21a-190c(b))

Organizations experiencing rapid revenue growth should review their annual financial results before preparing the state’s charitable registration renewal to determine which reporting level applies.

Preparing for a Connecticut Nonprofit Audit

Organizations approaching Connecticut’s audit threshold should begin preparing well before the end of the fiscal year.

In addition to standard accounting records, nonprofits should be prepared to document which revenue sources are excluded from the statutory calculation.

Your CPA will commonly request:

• General ledger
• Trial balance
• Revenue schedules
• Government grant schedules
• Government fee documentation
• Trust fund schedules
• Bank reconciliations
• Board meeting minutes
• Investment statements
• Internal control documentation
• IRS Form 990
• Prior-year financial statements

Properly organizing these records can help streamline both the audit engagement and the annual charitable registration process.

Beyond Compliance: The Value of an Independent Audit

Although Connecticut law requires an audit report once qualifying gross revenue reaches the statutory threshold, many organizations also realize broader organizational benefits from an independent audit conducted under professional auditing standards. (Conn. Gen. Stat. § 21a-190c(b); AICPA, Statements on Auditing Standards)

A financial statement audit can help:

• Demonstrate accountability to donors
• Improve board oversight
• Strengthen internal controls
• Increase confidence among grantmakers
• Improve financial reporting practices
• Enhance public trust
• Support long-term organizational growth

Why Choose ELT CPA LLC?

ELT CPA LLC provides independent nonprofit financial statement audit services for charitable organizations throughout Connecticut.

Our professionals understand nonprofit accounting standards, charitable registration requirements, and Connecticut’s unique revenue calculations. We work with nonprofit leadership to complete efficient audit engagements while minimizing disruption to daily operations and helping organizations prepare for annual regulatory filings.

Whether your organization is preparing for its first required audit or has completed audits for many years, ELT CPA LLC can help you navigate Connecticut’s nonprofit reporting requirements with confidence.

Frequently Asked Questions

Does Connecticut use revenue or contributions?

Connecticut bases its reporting requirements on gross annual revenue, not charitable contributions. (Connecticut DCP, Gross Revenue for CT Charities)

Are government grants included in the $1 million threshold?

Not for purposes of the statutory threshold when they fall within the exclusions in Connecticut law. Grants or fees from government agencies and revenue derived from qualifying trust funds are excluded from gross revenue for this calculation. (Conn. Gen. Stat. § 21a-190c(b))

What happens between $500,000 and $1 million?

Organizations with gross revenue greater than $500,000 but less than $1 million may generally submit either a CPA review report or a CPA audit report. (Conn. Gen. Stat. § 21a-190c(b); AICPA, Preparation, Compilation, and Review Standards)

Who oversees charitable audit filings?

Annual charitable registrations and related filing guidance are administered by the Connecticut Department of Consumer Protection. (Connecticut DCP, Audit and Review Reports for CT Charities)