Project Audit

FAQs

1. Who is required to submit an audit?
   Any project whose amount of tax credits issued to donors equals $25,000 or more must submit a compliance and financial audit of the NAP Fund.
2. When is the audit due?
   The audit deadline for all projects is six months after the Fund-Raising Period (FRP) expires as stated in the official Neighborhood Assistance Program (NAP) Agreement.
3. Can the audit deadline be extended?
   If you choose to include your NAP audit with your annual agency audit and the audit deadline cannot be met, you must notify the Department of Economic Development (DED) of the anticipated completion date and request an extension.
4. Who must conduct the audit?
   The audit must be performed by an independent Certified Public Accountant (CPA).
5. How will this audit be conducted?
   This audit will be conducted in accordance with generally accepted auditing standards. Each of the NAP Specific Requirements and Compliance Requirements outlined in the NAP Audit Guidelines must be addressed, including all statements and schedules.
6. What items will this audit cover?
   This audit addresses the deposit and expenditure of NAP cash donations as well as a review of any equipment, real property, or other assets donated for NAP credit. DED will continue to be responsible for monitoring compliance with other requirements such as donated services, signage, acknowledgment of NAP support, and building use/disposition.
7. Can the NAP audit be combined with our annual agency audit?
   Yes. However, the audit report must specifically address the NAP Specific Requirements outlined in the NAP Audit Guidelines. You may choose to have the NAP audit performed annually at the conclusion of the fundraising period. If the fundraising period is more than one year, you may choose to perform and audit annually during the fundraising period or have one overall audit performed at the end of the fundraising period.
8. What if all of the NAP Funds have not been spent?
   If the final audit deadline precedes the time when all NAP funds are spent, the statement of receipts and disbursements would show the balance of unspent funds as ending net assets. The organization being audited should include a letter describing the disposition of the remaining funds with the audit-reporting package. Quarterly Reports will continue to be due until all funds have been expended.
9. We have a small amount remaining in our NAP Fund. Is an escrow account still required?
   A waiver of the escrow requirement may be allowed at the discretion of DED. Written requests must be submitted to DED in advance.
10. How is earned interest on NAP Funds treated?
    Interest earned on NAP funds is not subject to NAP audit.
11. Can NAP credits be used to pay for the audit?
    Yes, the audit itself can be donated for credit or NAP cash contributions can be used to pay for the audit. To qualify for tax credits, the audit expense must be shown in the approved NAP Budget. Only the cost of the NAP portion of the audit is eligible for tax credit and approval is subject to the restrictions on NAP Donations.
12. How do we determine the NAP eligible portion of the cost of an overall agency audit?
    If the NAP audit is conducted as part of an overall agency audit, you may choose one of the following methods to determine the cost of the NAP portion:
    1. The auditor may submit an itemized invoice documenting actual hours spent performing the NAP audit, or
    2. You may divide the amount of the NAP Fund by the total amount of funds audited, and pro-rate the cost of the overall audit accordingly.
13. When an audit is performed as a donation, who earns the NAP credit?
    The individual accountant earns the credit only if he or she is in the accounting business as a sole proprietor (i.e. normally paid for providing accounting services). If the accountant belongs to a partnership, the partnership is technically making the donation and all partners share in the credit. The same would be true for accountants who are either part of an S-corporation or a Limited Liability Company. If the accountant is an employee of a company and is paid by his or her employer to perform the audit "on company time", the company will be the recipient of the credit. The donation is valued according to the employee's wages for time spent on the audit plus any related costs incurred by the company (i.e. fringe benefits, out-of-pocket costs reimbursed to the employee).
14. How many copies of the audit report must be submitted to DED?
    Only one copy of the NAP Audit Report is required. We suggest you mail the package by certified mail, which provides you with a written acknowledgment of receipt by DED. Mail the report to: NAP, P.O. Box 118, Jefferson City, MO 65102 Attn: NAP Compliance Officer.

Business and Community Services
301 W. High Street, Rooms 720, 770  Jefferson City, Missouri 65102
Tel: 1-866-647-3633    Fax: 1-573-751-7384    Email: missouridevelopment@ded.mo.gov