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As charitable organizations grow, additional financial reporting responsibilities often follow. In Illinois, a major reporting milestone occurs when a qualifying charitable organization receives more than $300,000 but not more than $500,000 in annual contributions and its fundraising functions are carried on solely by staff and volunteers.

Under the Illinois Solicitation for Charity Act (225 ILCS 460/4), qualifying organizations that receive more than $300,000 but not more than $500,000 in contributions and are not otherwise subject to the audit requirement must submit reviewed financial statements prepared by an independent CPA. Organizations receiving contributions in excess of $500,000 generally must submit audited financial statements instead. The current thresholds took effect January 1, 2024.

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 Chicago, Aurora, Rockford, Joliet, Naperville, Springfield, Peoria, or communities throughout Illinois, planning ahead for your required financial review can simplify the annual reporting process and help avoid unnecessary delays.

Illinois Financial Review Requirements at a Glance

Quick Answer

If your Illinois charitable organization receives more than $300,000 but not more than $500,000 in annual contributions and its fundraising is conducted solely by staff and volunteers, Illinois generally requires the annual report to include reviewed financial statements prepared by an independent CPA. Contributions in excess of $500,000 generally trigger an audit requirement. The Illinois Attorney General threshold notice summarizes the current thresholds.

When Is a Financial Review Required in Illinois?

Illinois bases its reporting requirements on annual contributions and the organization’s fundraising methods. The Illinois Attorney General Charity Registration page provides current filing forms, annual-report information, and the Attorney General’s notice regarding the 2024 audit and review thresholds.

Organizations receiving more than $300,000 but not more than $500,000 in annual contributions, whose fundraising functions are carried on solely by staff and volunteers, generally must include reviewed financial statements with the annual report. Contributions in excess of $500,000 generally require audited financial statements. These requirements appear in 225 ILCS 460/4.

Annual reports are generally due by June 30 for calendar-year organizations or within six months after the close of the fiscal year for fiscal-year organizations. The statute permits the Attorney General to grant an extension of up to 60 days for good cause upon timely written request. Organizations using a paid professional fundraiser should also review the separate audit threshold described in the Attorney General threshold notice.

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 AICPA Preparation, Compilation, and Review Standards, which include the Statements on Standards for Accounting and Review Services (SSARS).

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 involve the same extent of testing and provides limited assurance rather than reasonable assurance.

For many Illinois charitable organizations, a financial review satisfies the applicable state reporting requirement while providing donors, grantmakers, and governing boards with additional confidence in the organization’s financial reporting.

Illinois Law at a Glance

Illinois requires more than simply attaching reviewed financial statements to the annual report. The statutory report also calls for financial information such as gross receipts from contributions, charitable and educational program expenses, management expenses, fundraising expenses, and the disposition of net proceeds. The current requirements appear in 225 ILCS 460/4. The 2024 threshold changes are currently operative, but the statute states that those changes become inoperative on January 1, 2029, so future reporting periods should be rechecked.

Financial Review vs. Financial Audit

Although both engagements 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
• For qualifying organizations, required when contributions are more than $300,000 but not more than $500,000 and fundraising is conducted solely by staff and volunteers.

Financial Audit

A financial audit generally includes:

• Detailed testing of financial records
• Confirmation procedures
• Evaluation of internal controls
• Reasonable assurance
• Generally required when annual contributions exceed $500,000; separate rules can apply when a paid professional fundraiser is used.

Preparing for Your Financial Review

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

Your CPA will commonly request:

• Statement of Financial Position
• Statement of Activities
• General ledger
• Trial balance
• Bank reconciliations
• Contribution records
• Program expense schedules
• Fundraising expense records
• Board meeting minutes
• Investment schedules
• Federal Form 990

Preparing these documents before the engagement begins can reduce delays and help ensure your annual report is filed on time.

Benefits Beyond Compliance

Although Illinois requires a financial review once the applicable statutory threshold has been exceeded, organizations often realize additional benefits from the engagement.

A professionally completed financial review can help:

• Improve donor confidence
• Demonstrate financial transparency
• Strengthen grant applications
• Enhance board oversight
• Identify accounting issues before they become significant
• Improve internal financial reporting processes

Why Choose ELT CPA LLC?

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

Our team understands nonprofit financial reporting requirements and works closely with organizations of all sizes 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 service throughout Illinois
• 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 Illinois?

Qualifying charitable organizations receiving more than $300,000 but not more than $500,000 in annual contributions generally must submit reviewed financial statements when fundraising is carried on solely by staff and volunteers. See 225 ILCS 460/4(b)(3).

When is an audit required?

Organizations generally must submit audited financial statements when annual contributions exceed $500,000. A separate lower audit threshold can apply when a charitable organization uses a paid professional fundraiser. See the Illinois Attorney General threshold notice for the current distinction.

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.

When is the annual report due?

For calendar-year organizations, the annual report is generally due by June 30. For organizations using a fiscal year, the report is generally due within six months after the close of the fiscal year.