Preparing for an NGO audit becomes much easier when the records are organised before the auditor starts reviewing them.

Whether your organisation is a Trust, Society or Section 8 company, the audit file will usually need more than just financial statements. Registration records, books of accounts, bank statements, donation details, grant documents, expense vouchers, asset records and applicable tax or FCRA records may all need to be reviewed.

The exact documents depend on the NGO's legal structure, activities, funding sources and applicable registrations.

This NGO Audit Checklist brings the major documents and records together in one place so your team can identify missing information before the audit begins.

Quick answer: An NGO should generally keep its legal and registration documents, books of accounts, bank records, donation and grant records, expense vouchers, asset records, payroll information, previous audit records and applicable tax/FCRA compliance documents ready for audit.

NGO Audit Checklist at a Glance

Important: Not every document in this checklist applies to every NGO. Use the sections relevant to your organisation.

1. Legal & Registration Documents

Start the audit file with documents that establish the identity and legal structure of the organisation.

Trust

Keep:

• Trust deed

• Registration certificate, where applicable

• Amendments to the trust deed

• Details of trustees

• Relevant trustee resolutions

Society

Keep:

• Society registration certificate

• Memorandum/constitution and rules or bylaws

• Amendments

• Details of governing body members

• Relevant resolutions and minutes

Section 8 Company

Keep:

• Certificate of Incorporation

• Memorandum of Association

• Articles of Association

• Applicable MCA/company records

• Board resolutions and relevant minutes

Also keep the NGO's PAN and applicable registration or approval documents together with these records.

The purpose is simple: the auditor should be able to establish that the organisation's legal identity, governing documents and accounting records relate to the same entity.

2. PAN, 12AB, 80G & Other Tax Records

Keep copies of the tax and charitable-status documents applicable to the NGO.

Depending on the organisation, this may include:

• PAN

• 12AB registration/approval documents

• 80G approval documents

• Applicable Section 10(23C) approval

• Previous income-tax returns

• Previous audit reports

• Relevant Income Tax forms and acknowledgements

• Notices or correspondence from the Income Tax Department, where relevant

Do not assume that every NGO has the same tax registrations.

The audit file should clearly show which registrations apply to the organisation and whether the records used during the year are consistent with those registrations.

3. Books of Accounts

The books of accounts form the core of an NGO audit.

Keep the records maintained for the complete financial year, including:

• Cash book

• Bank book

• General ledger

• Journal, where maintained

• Trial balance

• Receipts and payments account

• Income and expenditure account

• Balance sheet

• Supporting schedules

• Relevant accounting workings

Before handing over the books, check whether:

• The books cover the entire financial year.

• Opening balances agree with the previous year's closing figures.

• Ledger balances agree with the trial balance.

• The trial balance agrees with the financial statements.

• Major balances have supporting documents.

• Old or unusual entries have been reviewed.

A technically prepared balance sheet is not enough if the supporting records behind it are incomplete.

4. Bank Statements & Bank Reconciliation

Collect bank statements for all relevant bank accounts operated during the year.

This may include:

• Savings accounts

• Current accounts

• Project-specific accounts

• Grant-related accounts

• FCRA accounts, where applicable

• Other accounts used by the organisation

Also keep:

• Bank reconciliation statements

• Details of unreconciled transactions

• Bank charges

• Interest records

• Cheque/payment records, where relevant

Before the audit, check:

☐ Every bank account has been included
☐ Statements cover the complete financial year
☐ Closing bank balances agree with the books
☐ Old unreconciled entries have been reviewed
☐ Unidentified receipts/payments have been investigated

Bank reconciliation is particularly useful because it can reveal transactions recorded in the books but not yet reflected in the bank, or transactions appearing in the bank that have not been properly recorded.

5. Donation Records

Donation records deserve special attention because the amount received should be traceable from the donor record to the accounting records and, where relevant, the bank statement.

Keep:

• Donation register

• Donation receipts

• Donor details

• Date of donation

• Amount received

• Mode of receipt

• Bank/payment evidence

• Corpus donation records, where applicable

• Restricted-purpose donation records, where applicable

• Relevant donor correspondence

If the NGO is approved under Section 80G, records connected with Form 10BD and Form 10BE should also be maintained where applicable.

The Income Tax Department states that Form 10BD is the statement of donations received for the relevant financial year, and Form 10BE is the donation certificate issued to donors. The stated due date is 31 May following the financial year.

Donation reconciliation

Before the audit, compare:

Donation register → Accounting records → Bank records → Applicable Form 10BD records

Any unexplained difference should be investigated before the auditor raises the question.

6. Grant & Project Documents

If your NGO receives grants, do not keep only the bank credit entry.

Maintain the complete grant trail.

Keep:

• Grant approval/sanction letter

• Grant agreement

• Project proposal

• Approved budget

• Funds received

• Project-wise expenditure

• Utilisation records

• Utilisation certificate, where applicable

• Project reports

• Funder correspondence

• Bills and vouchers supporting project expenses

A good audit file should make it possible to answer:

How much was received?

For which project?

How much was spent?

Where was it spent?

What supporting evidence is available?

This is particularly important when the grant has restrictions on how the money can be used.

7. Expense Bills, Invoices & Vouchers

Every significant expense should have an appropriate supporting trail.

Depending on the expense, this may include:

• Supplier invoice

• Bill

• Payment receipt

• Expense voucher

• Bank payment proof

• Approval record

• Agreement or work order, where relevant

Common expense categories include:

• Office rent

• Electricity

• Travel

• Professional fees

• Programme expenses

• Training expenses

• Communication

• Repairs and maintenance

• Office supplies

• Beneficiary-related expenditure

• Administrative expenses

Before the audit

Do not wait for the auditor to identify missing bills.

Review your expense ledger and ask:

Can we produce supporting evidence for this transaction if the auditor asks for it?

If the answer is no, identify the issue early.

8. Fixed Assets & Asset Records

If the NGO owns computers, furniture, vehicles, equipment, buildings or other assets, maintain an updated fixed asset record.

Keep:

• Fixed asset register

• Purchase invoices

• Payment proofs

• Asset addition records

• Asset disposal records

• Transfer records, where applicable

• Depreciation workings, where applicable

The asset register should be capable of explaining the movement from the opening balance to the closing balance.

For example:

Opening assets + additions − disposals = closing assets

The supporting records should make those movements traceable.

9. Investment & Financial Asset Records

Where the NGO has investments or other financial assets, keep the relevant supporting records.

These may include:

• Investment statements

• Bank deposit records

• Interest certificates

• Investment confirmations

• Supporting purchase/sale records

• Relevant compliance documentation

Where charitable-tax provisions impose conditions on investments or application of income, the supporting records should be reviewed with the applicable tax requirements.

10. Employee & Salary Records

If the NGO has employees, maintain:

• Salary register

• Payroll records

• Employment-related records

• Salary payment proofs

• TDS records, where applicable

• Form 16/other applicable certificates

• PF/ESI records, where applicable

• Other applicable statutory payroll records

Also reconcile the salary expense recorded in the books with payroll records and payments.

11. Tax Deducted at Source (TDS) Records

Where TDS provisions apply, keep the relevant records together.

This can include:

• TDS workings

• TDS returns

• Challans

• Deductee details

• TDS certificates

• Form 16/16A, where applicable

• Supporting invoices for professional or contractual payments

The auditor may need to trace the expense from the ledger to the underlying invoice, payment and applicable TDS treatment.

12. GST & Other Statutory Records

GST applicability varies by the organisation's activities and transactions.

Where GST applies, keep relevant:

• GST registration

• GST returns

• Tax invoices

• Input/output tax records

• Payment challans

• Reconciliation workings

Other statutory records should also be maintained where applicable to the NGO's activities, employees or establishment.

The important point is:

Do not add a compliance item simply because another NGO has it. Check whether it actually applies to your organisation.

13. FCRA Documents — Where Applicable

If the NGO receives foreign contribution, maintain a separate and well-organised FCRA file.

This may include:

• FCRA registration/prior permission records

• FCRA bank account records

• Foreign contribution receipts

• Foreign donor details

• Foreign contribution ledger

• Utilisation records

• Project/activity-wise expenditure

• Administrative expenditure records

• Bank statements

• Supporting vouchers

• Previous FC-4 filings

• Related financial statements and certification records

FCRA annual returns are filed online in Form FC-4. The FCRA FAQ states that the annual return is filed for each financial year within nine months of year-end, i.e. by 31 December, and that a NIL return is also required where there was no foreign contribution receipt/utilisation during the year.

FCRA records therefore should not simply be mixed into the NGO's general domestic accounting file.

Create a separate folder and reconcile the foreign contribution records independently.

14. Previous-Year Audit Documents

The previous audit file can help the auditor understand the current year's opening position.

Keep:

• Previous audit report

• Previous audited financial statements

• Previous-year trial balance

• Auditor observations

• Adjustments made

• Pending issues

• Previous-year closing balances

Before starting the new audit, compare the current year's opening balances with the previous year's audited closing figures.

If they do not agree, resolve the difference before the audit progresses.

15. Board, Trustee & Governance Records

Financial transactions do not always exist in isolation.

Relevant governance records may include:

• Board meeting minutes

• Trustee meeting minutes

• General body minutes, where applicable

• Resolutions

• Approval records

• Changes in trustees/directors/office bearers

• Authorisation records

• Important policy decisions

The auditor may need relevant governance records where they help explain significant transactions, changes in management or important financial decisions.

What Does an Auditor Actually Check?

An audit is not simply a process of collecting documents.

The auditor may need to connect the financial figure with its supporting evidence.

For example:

Donation

Donor → Receipt → Bank → Books → Applicable reporting

Expense

Approval → Invoice → Voucher → Payment → Ledger

Grant

Grant agreement → Funds received → Project expenditure → Supporting bills → Utilisation/reporting

Asset

Purchase → Invoice → Payment → Asset register → Financial statements

This is why keeping documents in separate folders without reconciliation is not enough.

The records should tell a consistent story.

NGO Audit Preparation Checklist

Before the auditor begins, use this final review:

Legal & Tax

☐ Registration documents collected
☐ PAN available
☐ 12AB records checked, where applicable
☐ 80G records checked, where applicable
☐ Previous income-tax return available
☐ Previous audit report available

Accounts

☐ Cash book updated
☐ Ledgers updated
☐ Trial balance prepared
☐ Financial statements prepared
☐ Opening balances checked

Banking

☐ All bank statements collected
☐ Bank reconciliation completed
☐ Unreconciled entries reviewed
☐ Closing bank balances checked

Donations

☐ Donation register updated
☐ Donation receipts organised
☐ Donor details available
☐ Corpus/restricted donations identified
☐ Applicable 10BD/10BE records checked

Grants & Projects

☐ Grant agreements available
☐ Project budgets available
☐ Project-wise expenditure reconciled
☐ Utilisation records available
☐ Supporting bills organised

Expenses

☐ Major invoices available
☐ Payment proofs available
☐ Expense vouchers checked
☐ Missing documents identified

Assets

☐ Fixed asset register updated
☐ Asset purchases supported
☐ Disposals recorded
☐ Depreciation workings checked, where applicable

FCRA

☐ FCRA records separated
☐ Foreign contribution bank records available
☐ Donor details available
☐ Utilisation records available
☐ Previous FC-4 records available
☐ Current-year FC-4 information reconciled, where applicable

Common NGO Audit Problems

Most audit preparation problems are not caused by complicated accounting.

They are often caused by simple gaps such as:

1. Missing supporting bills

An expense appears in the ledger, but the original invoice or payment proof cannot be found.

2. Bank reconciliation is incomplete

Old unreconciled transactions remain open for months.

3. Donation records do not match

The donation register, bank statement and accounting records show different figures.

4. Grant expenses are not tracked project-wise

The NGO knows how much it spent but cannot easily demonstrate how the expenditure relates to the relevant grant or project.

5. Old balances remain unexplained

Advances, receivables, liabilities or other balances continue year after year without proper reconciliation.

6. FCRA records are mixed with domestic records

Foreign contribution transactions become difficult to trace when there is no separate accounting trail.

7. Previous audit observations are ignored

Issues identified in the previous audit are carried forward without resolution.

How to Organise NGO Audit Documents

A simple digital folder structure can save significant time.

NGO AUDIT – FY 2025-26

01 – Legal & Registration
02 – PAN & Tax
03 – Books of Accounts
04 – Bank Records
05 – Donations
06 – Grants & Projects
07 – Expenses & Vouchers
08 – Fixed Assets
09 – Investments
10 – Payroll & Employees
11 – TDS & GST
12 – FCRA
13 – Previous Audit
14 – Governance
15 – Final Financial Statements

Keep documents named consistently.

For example:

Bank_Statement_HDFC_April_2025.pdf

is much easier to locate than:

scan00045.pdf

Good document management is not just about making the auditor's job easier. It also helps the NGO answer donor, management and compliance queries throughout the year.

When Should an NGO Start Preparing for an Audit?

Ideally, audit preparation should not begin one week before the auditor's visit.

A better approach is to maintain records throughout the year.

Monthly

• Update books

• Reconcile banks

• File bills and vouchers

• Record donations

• Track grants/projects

Quarterly

• Review major balances

• Check compliance records

• Review project-wise expenditure

• Identify missing documentation

Before the annual audit

• Finalise books

• Reconcile balances

• Prepare financial statements

• Review previous audit observations

• Organise supporting documents

This turns audit preparation into a routine process rather than a last-minute exercise.

Are Form 10B and Form 10BB Required for Every NGO?

No.

The applicable audit report depends on the organisation's circumstances and the relevant provisions.

For AY 2026-27, the Income Tax Department states that Form 10B applies where the specified conditions are met, including where total income exceeds ₹5 crore, where the trust/institution receives foreign contribution, or where income is applied outside India. Form 10BB applies in other applicable cases.

Therefore, an NGO should not select Form 10B or Form 10BB merely because another organisation used that form.

The applicability should be determined from the organisation's actual facts and the current provisions.

What If Your NGO Has Received No Donations?

Do not automatically assume that every donation-related compliance form is required.

For example, the Income Tax Department's current FAQ states that if no donation is received during the financial year, Form 10BD is not needed.

The important principle is to determine applicability from the actual transactions during the year.

Download the NGO Audit Checklist PDF

Want a printable version?

Download the EasyTax NGO Audit Checklist PDF and use it to organise your records before the audit.

The checklist covers:

• Registration documents

• Books of accounts

• Bank records

• Donations

• Grants and projects

• Expenses

• Assets

• Payroll

• Tax records

• FCRA records

• Previous audit records

• Final pre-audit checks

Need Help With Your NGO Audit?

Preparing documents is only one part of an NGO audit.

If your NGO needs assistance with reviewing accounts, organising audit records, reconciling financial information or handling applicable audit and compliance requirements, professional support can make the process more structured.

Explore EasyTax NGO Audit Services for assistance based on your organisation's structure, activities and compliance requirements.

Frequently Asked Questions

What documents are required for an NGO audit?

Common documents include registration records, PAN and applicable tax registrations, books of accounts, bank statements, bank reconciliation, donation records, grant documents, expense vouchers, fixed asset records, payroll records, previous audit records and applicable FCRA documents.

The exact requirements depend on the NGO's structure and activities.

What financial records are needed for an NGO audit?

The auditor may need the cash book, bank book, ledgers, trial balance, receipts and payments account, income and expenditure account, balance sheet and supporting schedules.

Does an NGO need bank statements for an audit?

Bank statements for relevant accounts are generally important supporting records because they help reconcile transactions and closing balances with the books.

What documents are required for donation verification?

Donation records may include the donation register, receipts, donor details, bank/payment evidence and applicable reporting records such as Form 10BD/10BE.

What documents are required for an FCRA audit?

Where FCRA applies, the NGO should maintain foreign contribution bank records, donor details, foreign contribution ledger, utilisation records, project/activity records, supporting vouchers and relevant FC-4 records.

How should NGO audit documents be organised?

Use separate folders for legal records, tax records, accounts, banking, donations, grants, expenses, assets, payroll, FCRA and previous audits. Within each folder, arrange documents chronologically and use consistent file names.

How can an NGO avoid last-minute audit problems?

Update books regularly, reconcile bank accounts, maintain donation and grant records, preserve supporting bills and vouchers, review old balances and resolve previous audit observations throughout the year.

Is an NGO audit checklist the same for every organisation?

No. A Trust, Society and Section 8 company can have different legal and governance records. FCRA, GST, 80G, 12AB, grant and other requirements also depend on the NGO's circumstances.

Final Takeaway

A smooth NGO audit starts long before the auditor reviews the financial statements.

The goal is not simply to have a large collection of documents. Your records should be complete, organised, traceable and consistent with the books of accounts.

Before the audit begins, make sure you can trace important transactions from the original document to the accounting record and, where relevant, to the bank statement and applicable compliance filing.

Use this NGO audit checklist as a practical starting point, identify missing records early and confirm any organisation-specific requirements with your auditor or tax professional.

Need professional assistance? Explore EasyTax NGO Audit Services.