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As charitable organizations grow, so do their financial reporting responsibilities. In Connecticut, one of the most significant compliance milestones occurs when an organization’s gross revenue exceeds $500,000 during the fiscal year covered by its annual charitable registration.

Under Connecticut General Statutes § 21a-190c, charitable organizations with more than $500,000 but not more than $1,000,000 in gross revenue are generally required to submit either reviewed financial statements or audited financial statements prepared by an independent Certified Public Accountant (CPA). Organizations with gross revenue exceeding $1,000,000 are generally required to submit an independent financial statement audit. (Connecticut General Statutes § 21a-190c).

Understanding these requirements before your annual filing deadline can help your organization remain compliant while demonstrating financial transparency to donors, grantmakers, board members, and the public.

Whether your nonprofit serves Hartford, New Haven, Stamford, Bridgeport, Waterbury, Norwalk, Danbury, or communities throughout Connecticut, planning ahead for your financial reporting engagement can help avoid unnecessary delays and ensure your annual filing is completed on time.

Connecticut Financial Review Requirements at a Glance

Quick Answer

If your Connecticut charitable organization reports more than $500,000 but not more than $1,000,000 in gross revenue, Connecticut generally requires your organization to submit either reviewed financial statements or audited financial statements prepared by an independent CPA as part of its annual charitable registration. Organizations reporting more than $1,000,000 in gross revenue generally must submit audited financial statements instead. Connecticut also excludes certain revenue, including government grants and trust funds, when calculating gross revenue for these reporting thresholds. (Connecticut DCP – Audit and Review Reports).

When Is a Financial Review Required in Connecticut?

Unlike many states that base reporting requirements on charitable contributions, Connecticut uses gross revenue to determine the level of financial reporting required.

Organizations reporting more than $500,000 but not more than $1,000,000 in gross revenue generally must provide either a CPA review or CPA audit with their annual charitable registration. Once gross revenue exceeds $1,000,000, an audit is generally required. (Connecticut DCP – Audit and Review Reports).

An important distinction under Connecticut law is that gross revenue excludes grants or fees received from government agencies and revenue derived from funds held in trust for the benefit of the organization. Organizations approaching the reporting threshold should work closely with their CPA to determine whether these exclusions affect their reporting requirements. (Connecticut General Statutes § 21a-190c).

The Connecticut Department of Consumer Protection administers the state’s charitable registration program and provides guidance regarding annual filing requirements for charitable organizations. (Connecticut DCP – Public Charities).

What Is a Financial Statement Review?

A financial statement review is an accounting service performed by an independent Certified Public Accountant in accordance with the Statements on Standards for Accounting and Review Services (SSARS) issued by the American Institute of Certified Public Accountants (AICPA). (AICPA – Preparation, Compilation and Review Standards).

During a review engagement, the CPA performs analytical procedures and inquiries of management to determine whether any material modifications should be made to the organization’s financial statements. Unlike an audit, a review does not include extensive testing of transactions or internal controls and provides limited assurance rather than reasonable assurance. (Connecticut DCP – Audit and Review Reports).

For many Connecticut charitable organizations, a review offers an efficient way to satisfy state reporting requirements while enhancing financial transparency and accountability.

Connecticut Law at a Glance

One feature that makes Connecticut different from many other states is that organizations within this reporting threshold may satisfy the annual filing requirement with either a financial review or a financial audit completed by an independent CPA.

Connecticut also calculates the reporting threshold using gross revenue rather than charitable contributions, while excluding certain government funding and trust revenue from that calculation. These distinctions can significantly affect an organization’s reporting obligations, making it important to evaluate annual revenue carefully before filing. (Connecticut General Statutes § 21a-190c).

Financial Review vs. Financial Audit

Although both services are performed by independent Certified Public Accountants, they provide different levels of assurance.

Financial Review

A financial review generally includes:

• Analytical procedures
• Inquiries of management
• Limited assurance
• Lower overall cost than an audit
• Accepted by Connecticut for organizations reporting more than $500,000 but not more than $1,000,000 in gross revenue.  (Connecticut DCP – Audit and Review Reports).

Financial Audit

A financial audit generally includes:

• Detailed testing of financial records
• Confirmation procedures
• Evaluation of internal controls
• Reasonable assurance
• Generally required once gross revenue exceeds $1,000,000.  (Connecticut DCP – Audit and Review Reports).

Preparing for Your Financial Review

Maintaining organized financial records throughout the year can significantly streamline your review engagement.

Your CPA will commonly request:

• Statement of Financial Position
• Statement of Activities
• General ledger
• Trial balance
• Bank reconciliations
• Revenue schedules
• Grant documentation
• Board meeting minutes
• Investment schedules
• Significant contracts

Preparing these records before the engagement begins can reduce delays and help ensure your reporting deadlines are met.

Benefits Beyond Compliance

Although Connecticut’s reporting requirements are designed to promote accountability, an independent financial review can provide additional value by helping organizations:

• Improve donor confidence
• Strengthen grant applications
• Enhance financial transparency
• Support effective board oversight
• Identify accounting issues before they become larger concerns
• Improve financial reporting practices

Why Choose ELT CPA LLC?

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

Our team understands nonprofit financial reporting requirements and works with organizations across the state to complete review engagements efficiently while minimizing disruption to daily operations.

Our services include:

• Independent financial statement reviews
• Nonprofit accounting guidance
• GAAP financial statement assistance
• Annual reporting support
• Remote services throughout Connecticut
• Responsive communication throughout the engagement

Whether your organization is preparing for its first financial review or has completed reviews previously, ELT CPA LLC is ready to help.

Frequently Asked Questions

What triggers a financial review in Connecticut?

Organizations reporting more than $500,000 but not more than $1,000,000 in gross revenue generally must submit either reviewed or audited financial statements prepared by an independent CPA as part of their annual charitable registration. (Connecticut DCP – Audit and Review Reports).

Does Connecticut use revenue or contributions?

Connecticut bases its reporting requirements on gross revenue, not charitable contributions. Certain government grants, government fees, and trust revenue are excluded when determining gross revenue. (Connecticut General Statutes § 21a-190c).

Is a financial review less extensive than an audit?

Yes. A financial review provides limited assurance through analytical procedures and inquiries, while an audit includes substantially more testing and provides a higher level of assurance. (AICPA – Preparation, Compilation and Review Standards).

When should our organization begin planning?

Organizations should contact their CPA several months before annual filing deadlines to allow sufficient time for planning, preparation, and completion of the engagement.