Polish NGOs and foundations can face an audit obligation from two independent sources: the statutory size threshold under the Polish Accounting Act, and grant-specific requirements from funders. These obligations run in parallel — a small NGO running a large EU project may be exempt from the statutory audit but still required to have one by its funding agreement.
Statutory audit threshold (Article 64 UoR)
Polish associations, foundations and other non-profit legal entities that keep books in accordance with the Polish Accounting Act (UoR) are subject to the same statutory audit thresholds as commercial entities. An audit is required if, in the preceding financial year, the organisation met at least two of three conditions:
| Threshold | Value |
|---|---|
| Total assets at year-end | PLN 2,500,000 (approx. EUR 550,000) |
| Annual net revenue from sales and grants | PLN 5,000,000 (approx. EUR 1,100,000) |
| Average annual headcount | 50 full-time equivalents |
Note that "net revenue" for non-profits includes grant income and other operating income, not only earned income from economic activities. An NGO receiving significant EU grants may cross the revenue threshold without generating any commercial revenue.
Grant-driven audit obligations
Independent of the statutory threshold, the following funders typically require an audit as a condition of the grant:
| Funder / Programme | Typical audit trigger | Notes |
|---|---|---|
| EU structural funds (ERDF/ESF+, FEnIKS, FENG) | EUR 750,000 of eligible expenditure declared | Standard EU audit threshold; check funding agreement for exact wording |
| NCBiR (National Centre for R&D) | PLN 2,000,000 of eligible costs | Often required at mid-term and at project close |
| PFRON (State Fund for Rehabilitation) | Specified in the grant agreement | Varies by programme; check individual agreement |
| Corporate foundations and private donors | Often above PLN 500,000 – 1,000,000 | Requirements set in the grant letter or funding agreement |
NGO-specific accounting issues
The audit of a non-profit organisation focuses on areas that are specific to the sector:
- Restricted fund accounting: Grants designated for a specific purpose (restricted funds) must be tracked separately. The auditor verifies that expenditure charged to each grant is within the approved budget categories and eligible period, and that restricted income has not been used for other purposes.
- Activity classification: Polish law distinguishes between an NGO's statutory non-profit activities (działalność statutowa nieodpłatna), paid statutory activities (działalność statutowa odpłatna) and economic activities (działalność gospodarcza). These must be separately accounted for — mixing costs between categories is a common audit finding.
- Grant recognition and deferred income: Grants received in advance are deferred income (rozliczenia międzyokresowe przychodów) until the related expenditure is incurred. The auditor tests whether grants are recognised in the correct period.
- In-kind contributions: Volunteer time, donated goods or services that the NGO accounts for must be valued and presented consistently with the applicable accounting framework.
OPP additional requirements
Organisations holding OPP (Organizacja Pożytku Publicznego) status — which entitles them to receive 1.5% personal income tax donations — have additional transparency obligations:
- Annual activity report (sprawozdanie merytoryczne) and financial statements must be published on the NIW-CRSO portal
- If statutory audit thresholds are met, the audit report must be included in the published documents
- OPP status can be revoked if reporting obligations are not met — making accurate, timely financial statements a governance priority
Larger OPPs receiving 1.5% donations are subject to increased scrutiny from NIW (National Institute of Freedom) as the oversight body.
Pre-audit checklist for NGOs and foundations
- ☐ Separate accounting ledgers for each restricted grant (cost centre or project code)
- ☐ Reconciliation of grant income received to amounts recognised in the income statement
- ☐ Deferred income schedule for grants received but not yet spent
- ☐ Separation of statutory non-profit, paid statutory and economic activity costs
- ☐ All grant agreements and amendments accessible to the auditor
- ☐ Documentation of procurement procedures (competitiveness principle or PZP)
For Warsaw-based NGOs and foundations, see also: financial audit Warsaw.
Frequently asked questions
NGO or foundation audit?
JMFC carries out statutory audits and grant-driven project audits for Polish NGOs, foundations and associations — including restricted fund accounting review and OPP financial statement preparation.