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A management letter is a document from auditors that outlines findings and recommendations after an audit, often highlighting areas for improvement in financial processes.
It shows that management is taking auditors' recommendations seriously, planning corrective actions, and committing to better governance and compliance.
The organization's management team, often led by the executive director or finance director, prepares the response for review by the board or audit committee.
Nonprofits should document responses in writing, outline specific actions and timelines, and store them in their accounting platform, such as Aplos, for tracking and reference.
Yes, future auditors review prior responses to assess whether recommendations were addressed and improvements were made.