During a nonprofit audit, your auditors will request certain information from your organization. This list of requests is commonly known as a “Provided By Client” or “PBC” list. In other words, this is the list of items that you (the client) will need to provide.
Your audit firm may share this list in many different ways. It may be a simple spreadsheet or checklist. Or you may be invited to an interactive audit management platform where you can upload documents, add comments or questions, or reassign responsibilities to other members of your organization. No matter how the PBC list is shared, it will be your responsibility to meet all of your auditor’s requests.
The PBC list may grow over the course of the audit as new information comes to light. For example, you may receive a preliminary list of requests at the beginning of the audit, followed by additional follow-up requests as the audit team begins to review your documentation. It’s normal to receive additional requests, so keep your records close to hand until the audit is completely finished.
In most cases, a first-time audit will require more documentation than subsequent audits, especially if you retain the same audit firm. Your auditors will always ask about any changes or updates to your fiscal policies or internal controls.
The items included on your specific PBC list will vary depending on your organization’s size, structure, financial environment, and audit history. Until you receive your PBC list, you won’t know exactly what the auditors will need. However, a nonprofit audit PBC list typically includes at least some of the following items:
Your internal control policy, fiscal manual, or other accounting narrative describing your organization’s fiscal procedures and segregation of duties
Your organization’s bylaws
Board meeting minutes
Bank and investment statements
Lease agreements
Payroll records
Grant documentation
Donation records
Invoices, receipts, and other A/P records
A trial balance from your bookkeeping system
Year-end balance sheet account reconciliations
A detailed listing of all prepaid expenses
A detailed listing of all property and equipment
Your actual PBC list may contain some or all of the above items, as well as additional items related to your unique organization. Some of these items may need to be provided by your accountant, your board, your program managers, or other department heads, so it’s important to determine each person’s responsibilities early on.
If you have a question about an item on your PBC list, don’t hesitate to ask your auditors! The number-one cause of audit delays is an incomplete PBC list. Your auditors cannot move forward until every request on the PBC list has been fulfilled. If you’re unsure what a request means or what kind of documentation is acceptable, ask your audit team right away so they can provide clarification.