In this episode, hosts Tricia and Yev take a practical look at the nonprofit statement of functional expenses and share what auditors commonly see during the audit process. They cover best practices for expense classifications, allocation methodologies, and year‑over‑year consistency, along with guidance on breaking out major program services and avoiding oversized miscellaneous categories. Tricia and Yev also explain how the statement of functional expenses connects to the statement of activities and Form 990 reporting, offering helpful insights for nonprofit finance teams, leaders, and board members focused on clarity, transparency, and audit readiness.