Nonprofit CPA in San Jose, CA
Audits, restricted-gift accounting, Form 990 and fractional CFO support for San Jose nonprofits whose boards need to know what can actually be spent.
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Nonprofit CPA work in San Jose starts with the restrictions
A San Jose nonprofit can close the year with a large restricted gift and still have trouble meeting the next payroll. The gift is real, but the cash may be committed to a building, a future program year or a specific project, and it cannot simply be moved to cover salaries. That gap between revenue on paper and money available for operations is where useful nonprofit accounting begins.
RTN CPA, a certified public accounting firm, serves nonprofit organizations, government agencies and districts, and small businesses. As a nonprofit CPA for San Jose and Silicon Valley organizations, we focus on the link between what a donor or funder agreed to, what the general ledger shows, and what the board needs to decide. That covers nonprofit accounting, independent audits, Form 990 and California filings, and part-time financial leadership.
Principal Roman Richardson, CPA, leads audit work. He has over 20 years of experience focused on nonprofit organizations and governmental districts in California and Washington. Tax engagements are led by principal Paul J. Stroub, CPA.
Nonprofit audits and independent assurance in San Jose
Boards, foundations and lenders may ask for an audit, and California sets a floor of its own. Under Government Code section 12586(e), a charity registered with the Attorney General that receives or accrues $2 million or more in gross revenue in a fiscal year (excluding government grants and contracts that require an accounting to the agency) must have its financial statements audited by an independent CPA and make them available to the Attorney General and the public within nine months after year end.
Voluntary audits are public too. Under section 12586(f), audited statements a registered charity obtains below the threshold, for example at a foundation's request, must also be made available to the Attorney General and the public.
- annual financial statement audits
- Uniform Guidance (Single) audits when federal spending requires one
- compliance audits required by a grant or contract
- reviews and compilations where the requesting party accepts them
- internal control observations for management and the audit committee
Audit preparation starts with three questions: which period, which reporting framework, and what deadline the requesting party has set. Then comes support for the balances auditors test most closely in a contribution-funded organization: pledges receivable, restricted net assets and their releases, expense allocations, and investments, including donated stock.
Independence comes first. If RTN CPA keeps your books, prepares your statements or acts in a finance role, we assess the AICPA independence rules before accepting your audit, and sometimes the right answer is a different audit firm. For charities covered by the $2 million rule, California law also applies the Yellow Book independence standards to any nonaudit services the audit firm provides.
Accounting for restricted contributions and foundation awards
San Jose nonprofits are often funded by a mix of individual gifts, family and corporate foundation awards, sponsorships and program revenue, and Silicon Valley giving can also arrive as employer matching gifts, donor-advised fund grants or shares of stock. The accounting has to separate donor restrictions from money the board has chosen to set aside: a board designation is the board's to change, while a donor restriction is released only when its purpose or time requirement is met.
A development-team spreadsheet of pledges and release dates tends to drift away from the general ledger. Sound fund accounting records each gift's terms when it arrives, the date a restriction is met, and how the gift is presented. Donated stock is recorded at fair value on the date of the gift, even if it is sold the next week. If any funding is federal, including money passed through a county or city agreement, a Single Audit applies once federal award expenditures reach $1,000,000 in a fiscal year beginning on or after October 1, 2024 ($750,000 for earlier fiscal years).
- donor-restriction and release schedules
- gift and grant recognition, including conditional awards
- reconciling development records to the general ledger
- recording donated stock and other noncash gifts
- separating board-designated funds from donor-restricted funds
Form 990, gifts of stock & California compliance
Form 990 tells donors, regulators and the public what a nonprofit does, how it is governed and how it spends, so revenue classification and the split of expenses among programs, management and fundraising matter. Gifts of stock add a schedule: an organization reporting more than $25,000 of noncash contributions for the year completes Schedule M, which lists publicly traded securities and closely held stock separately.
California adds its own annual filings, and which ones apply depends on registration status and revenue. Charities registered with the Attorney General's Registry of Charities and Fundraisers renew on Form RRF-1, with a copy of the IRS Form 990, 990-EZ or 990-PF, within four months and fifteen days after year end (the Registry follows an IRS extension). Most exempt organizations also file Form 199 with the Franchise Tax Board, or the 199N e-Postcard if gross receipts are normally $50,000 or less. Our nonprofit tax services cover the federal return and state filings together.
- federal Form 990, 990-EZ or 990-PF returns
- revenue classification and functional expense reporting
- Schedule M for donated stock and other noncash gifts
- Attorney General RRF-1 renewal support
- Franchise Tax Board Form 199 or 199N
Accounting that keeps pace with a growing nonprofit
The accounting a nonprofit needs changes as it grows. A part-time bookkeeper may be enough while there is one program and a handful of funders. Add several awards with different reporting dates, a larger staff and a board finance committee, and the organization needs a formal monthly close, review checkpoints and someone responsible for controller-level oversight.
We help organizations make that step without rebuilding everything at once: a chart of accounts that tracks programs and restrictions, reconciliations reviewed by someone other than the preparer, and a close calendar that produces statements while they are still useful. When the books are behind, cleanup comes first.
- bookkeeping cleanup and catch-up work
- monthly close with reviewed reconciliations
- fund accounting by program and restriction
- functional expense allocation
- controls sized to a small finance team
- year-end schedules ready for the auditor
Board reporting that explains the financial position
Good board reporting answers the questions directors actually ask. How much cash is available for operations? Which programs are ahead of or behind budget? Which restricted commitments will draw on cash in the next six months? Are the forecasts built on tested assumptions? A fractional CFO or controller can build a reporting package that separates operating results from donor-restricted activity.
California adds a governance step for larger charities: a nonprofit corporation covered by the $2 million audit rule must have an audit committee appointed by the board. Staff members, including the chief executive and the treasurer or CFO, cannot serve on it, and finance committee members must make up less than half of it. The committee recommends retaining or replacing the auditor, meets with the auditor and decides whether to accept the audit.
- program-level budget-to-actual reports
- cash-flow forecasts that show restricted cash separately
- monthly reporting packages for the board and finance committee
- reporting for the audit committee
- internal control improvements as the team grows
Signs the books have fallen behind the organization
Most of these start small. They usually surface when a board member, a funder or an auditor asks a direct question.
- Restricted gifts reported to the board as cash available for operations
- Development records and the general ledger showing different totals for the same gifts
- Donated stock recorded at the sale price, or not recorded until it was sold
- Crossing the $2 million audit threshold without an audit committee in place
- One person receiving, recording and reconciling cash
Each of these can be fixed, and each is easier to fix during the year than at audit time.
Starting with the obligation in front of you
A first conversation sorts out what you actually need: an audit, tax reporting, cleanup work, recurring accounting or financial leadership. We ask about your funding, your records, who is asking for what, and the deadlines.
The scope is then set out in a written engagement letter. Assurance work and management services are kept appropriately independent, so if you need both we explain which ones we can provide together. Firm-wide, RTN CPA has 25+ years of experience and more than 100 completed audits.
- a call to review your funding sources and deadlines
- a written engagement letter that names the service
- a request list matched to the engagement
- plain-language findings for management and the board
We cannot promise an audit result or a filing outcome. We can tell you early what your records will and will not support.
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Working with nonprofits in San Jose and Silicon Valley
We serve nonprofits based in San Jose and elsewhere in Santa Clara County and Silicon Valley, working remotely through secure file upload and scheduled video or phone meetings. RTN CPA also offers its services to nonprofits in these markets:
Start a conversation about your nonprofit's next step
Whether an audit is coming up, restricted gifts are hard to track, the bookkeeping is behind or the Form 990 is due, start with the records you have and the obligation in front of you.
Tell us about your funding, annual revenue and deadlines. We will discuss the appropriate next step and whether RTN CPA can provide the service you need.
FAQs for San Jose nonprofits
Do you have an office in San Jose?
No. RTN CPA is based in California, with addresses in Los Angeles and Roseville. We serve San Jose and Silicon Valley organizations remotely, through our secure file upload and scheduled phone or video meetings, and if part of an engagement needs to happen on site, we raise it when we agree on the scope.
How should we account for donor-restricted gifts, including gifts of stock?
Record each restriction when the gift arrives, document when its purpose or time requirement is met, and release it in that period. Stock is recorded at fair value on the gift date, whether you hold it or sell it, and noncash gifts over $25,000 for the year bring Schedule M into the Form 990.
There are plenty of accountants in Silicon Valley. Do we need one who focuses on nonprofits?
Nonprofit work turns on different questions: whether a gift is restricted or conditional, how expenses are allocated by function, how the Form 990 and California filings fit together, and what an auditor will test. A CPA who handles those questions regularly is better placed to answer them.
Our revenue is approaching $2 million. What changes in California?
A registered charity with $2 million or more in gross revenue for the fiscal year, excluding government grants and contracts that require an accounting, needs an independent CPA audit and, if it is a corporation, a board-appointed audit committee. Funders can require an audit at lower revenue, and a Single Audit applies once federal award expenditures reach $1,000,000 in a fiscal year beginning on or after October 1, 2024.
Is Form 990 only a tax filing?
No. It is a required information return for many exempt organizations and a public record of their programs, governance and finances. Donors and foundations read it, and charities registered in California attach a copy to their annual RRF-1 renewal with the Attorney General.
What does fractional CFO support look like for a nonprofit?
Senior financial help on a part-time basis: cash forecasting, budget development, board and committee reporting, and decision support. The scope fits the organization and can change as it grows.
Call (888) 616-8070 or schedule a consultation to get started.
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