One of the calls I remember clearly came from the new Executive Director of a national nonprofit. She had taken over an organization that had grown steadily over several years, from a scrappy volunteer-run operation into something with a budget that demanded professional management. She was the first ED hired specifically to lead the organization through that next chapter.
She called me a few weeks before her first 990 filing. “I want the board to actually review this before we file,” she said. “Not just nod through it at the end of a meeting.”
That call told me a lot. Most importantly it told me that this was a relationship I wanted to invest in. And that this was going to be a good client.
Why the Board Is Responsible for the 990
The 990 requires an officer to sign under penalty of perjury. That is the specific legal obligation. But the compliance picture is broader than a single signature.
Board members of nonprofit organizations carry fiduciary responsibilities under state nonprofit corporation law. The specifics vary by state, and frankly, the details are a conversation for your nonprofit attorney rather than your CPA. What I can tell you is that those responsibilities are real, they are enforceable, and the 990 sits squarely within their scope. If you want to understand what your state requires, these are good starting points: the IRS has published Publication 4221-PC on governance practices for public charities. The Colorado Secretary of State has a nonprofit board education course that is useful. The California Attorney General’s Guide for Charities covers board duties in detail. The New York Attorney General’s Charities Bureau governance page is similarly thorough. Illinois has guidance through the Attorney General’s Charitable Trust Bureau.
Part VI of the 990 asks directly about board oversight processes, conflict of interest policies, and how the organization makes its governing documents available to the public. From this we might understand that the IRS sees governance and compliance as connected, and that Part VI is not just a formality to get through.
For the new ED on that call, this framing mattered. Her board had been used to a lighter touch when the organization was smaller and volunteer-run. The return had been filed, someone had signed it, and the work had moved on. That approach made a certain kind of sense when the stakes were lower. It did not make sense anymore.
What the 990 Is Actually Asking the Board to Confirm
Before getting to the mechanics of a review process, it helps to understand what the board is actually being asked to confirm when it approves the 990.
The return covers a lot of ground. But for board members who are not accounting specialists, there are specific sections that deserve their attention above all others.
Part III: Program Service Accomplishments. This is the organization’s public description of what it did this year. Board members are uniquely positioned to confirm whether these descriptions are accurate and whether they reflect the organization’s actual work. If the descriptions feel generic, recycled from prior years, or inconsistent with what the board has been hearing in program updates, that is worth a conversation before the return is filed.
Part VI: Governance. This section asks about board meeting frequency, independence, document retention policies, conflict of interest policies, and whistleblower policies. Board members should be able to confirm that the answers match their own understanding of how the organization operates. Discrepancies between what is reported here and what the board actually does are a governance problem.
Part VII: Compensation. All officers, directors, and trustees are listed by name regardless of their compensation level. Board members should confirm that the roster is accurate and complete, and that any compensation figures align with what the board approved.
Related party transactions in Part IV. If any boxes are checked regarding business relationships between the organization and a board member, those deserve specific attention. These transactions are not automatically problematic, but they must be disclosed accurately and managed through the conflict of interest policy.
Schedule O. This is where narrative context is added to many of the yes/no questions throughout the return. Board members who read Schedule O carefully often get the clearest picture of how the organization is representing itself to the public, and whether that representation is accurate.
Schedule J. If detailed compensation is being disclosed for high earners, the board should know what is in it before it becomes public. Surprises at filing time are avoidable.
A Checklist for a Meaningful Board Review
In our experience, a meaningful board review does not require the board to become 990 experts. It requires them to engage with the return as the informed fiduciaries they are supposed to be. Here is what that looks like in practice.
Before the review meeting:
- The return is distributed to board members at least one week in advance
- A brief cover memo from the preparer or ED flags any new schedules, material changes from the prior year, or items requiring specific board attention
- Board members are encouraged to submit questions in advance
During the review:
- Financial totals are gut-checked against the internal financial reports the board has been reviewing throughout the year
- Part III program descriptions are confirmed as accurate and current
- Part VI governance responses are confirmed as consistent with actual practice
- Part VII compensation roster is reviewed for accuracy and completeness
- Any checked boxes in Part IV related-party transactions are discussed and understood
- Schedule O narrative explanations are reviewed
- Schedule J, if applicable, is reviewed before it becomes public
- Any new schedules from the prior year are explained and understood
After the review:
- Questions and comments are documented in board minutes
- Any corrections are made before filing
- The officer signing does a final review and makes sure the wishes of the board are implemented
This process does not have to take more than one focused meeting. For boards that are new to it, a little extra support from the preparer makes a significant difference. We often join the board meeting when a client is going through this process for the first time, to walk through the return and answer questions in real time.
Building It Into the Calendar
The most common reason board reviews fall short is not that board members are not willing. It is that the review is not built into the organizational calendar with enough lead time.
A 990 that lands in a board member’s inbox two days before the filing deadline is almost impossible to review meaningfully. A 990 that is distributed three to four weeks before the deadline, with a dedicated agenda item at the next board meeting, is a different experience entirely.
For calendar-year organizations, the May 15 filing deadline means the board review should be calendared no later than mid-April. For organizations filing on extension, the November 15 deadline means the review should be on the October calendar. Building these dates into the annual board calendar at the start of the year, alongside audit review, budget approval, and strategic planning, signals that the 990 review is a governance responsibility, not an administrative afterthought.
One marker of success we use at Beancount is whether a client needs an extension for structural reasons — a complex transaction, a late audit, or a genuine capacity constraint — or whether they need one because the preparation calendar was not set up correctly. For most organizations, a timely filing is achievable.
Pulling It Together
At the start of this post I mentioned the new ED who called wanting the board to actually engage with the 990. What she was really asking for was a governance culture that matched the size and maturity of the organization she had been hired to lead. The 990 review process was one expression of that.
The board members of that organization were not bad fiduciaries. They had built something real over many years, mostly as volunteers, and they cared about the mission. What they needed was a process that helped them engage with the return as the public document it had become, and a preparer who treated the review as part of the service, not an afterthought to the filing.
Do not treat your accountant as someone you call once a year at filing time. Whether it is Beancount or someone else, work with a partner who wants to understand your organization, stays close to what you are building, and genuinely wants to see nonprofits thrive.If you would like to talk through what that looks like for your organization, you can reach us via contact form or email.
This article is for general informational purposes only and does not constitute professional accounting, tax, or legal advice. Tax laws, regulations, and accounting standards change frequently, and the application of rules can vary based on your organization’s specific facts and circumstances. Before acting on anything you read here, consult a qualified professional who can advise you based on your situation.
