What Is a Single Audit and Which Organizations Have to Get One?

What Is a Single Audit and Which Organizations Have to Get One?

A single audit is a combined financial and compliance audit required of any non-federal entity that spends more than a set amount of federal award money in one fiscal year. It covers the organization's financial statements and, separately, whether it followed the rules attached to the federal funds it spent. Nonprofits, states, local governments, tribes, and institutions of higher education are all subject to it.

The requirement now lives in the federal Uniform Guidance at 2 CFR Part 200, which consolidated the older OMB circulars that governed it. The idea itself is older: the Single Audit Act of 1984 replaced a system where each federal agency audited its own grants separately. Hence the name, one audit covering everything instead of several.

Single audit requirements catch new grantees off guard more than almost any other compliance obligation, and usually for one reason, which is worth understanding before anything else.

Spending Triggers It, Not Receiving

The threshold is based on federal awards expended during your fiscal year, not awards received or awarded.

This distinction decides real cases. An organization that receives a $2 million multi-year grant and spends $300,000 of it in year one has not necessarily crossed the threshold in year one. An organization that receives nothing new but spends down a large balance of prior-year awards may have crossed it. The obligation follows the outflow.

The threshold has been raised over time. The 2024 revisions to the Uniform Guidance set it at $1 million in federal awards expended, up from the long-standing $750,000, effective for fiscal years beginning on or after October 1, 2024. Because the figure has moved and applies by fiscal year, confirm the amount for your specific year rather than assuming it, especially if you sit anywhere near the line.

Two other things count toward the total and are frequently missed. Federal money that reaches you through a state or another nonprofit as a subaward still counts as a federal award expended by you. And non-cash assistance such as donated federal property or certain loan programs can count, depending on the program, even though no cash moved through your bank account.

What the Auditor Actually Tests

A single audit has two parts, and the second is the one organizations underestimate.

The first part is a standard audit of your financial statements, resulting in the opinion your board is used to seeing.

The second part is a compliance audit of your major federal programs, selected using a risk-based process set out in the Uniform Guidance rather than by your choice. For each major program, the auditor tests compliance with the applicable requirements and evaluates your internal controls over them. In practice that means:

• Allowable costs. Whether what you charged to the grant is permitted, properly documented, and correctly allocated between programs.
• Time and effort documentation. Whether salary charged to a federal program is supported by records of what people actually worked on. Auditors who do this work routinely will tell you it is a frequent source of findings, and it is the area organizations most often underestimate.
• Procurement. Whether purchases followed required methods, competition standards, and conflict-of-interest rules.
• Subrecipient monitoring. If you pass funds through to others, whether you evaluated their risk and monitored their use of the money.
• Reporting. Whether the financial and performance reports you submitted match your accounting records.
• Eligibility. Whether the people or entities you served actually qualified under program rules.

The output includes a schedule of expenditures of federal awards, an opinion on compliance for each major program, and a schedule of findings and questioned costs. Findings are not fatal, but they follow you: they must be tracked in a corrective action plan, and prior findings affect the risk assessment that determines which programs get tested next time.

The Timeline, and the Deadline That Bites

Plan for a longer engagement than a standard audit, since the compliance testing is additional work with its own document requests.

The submission deadline is the earlier of thirty days after you receive the auditor's report, or nine months after the end of the audit period. The reporting package goes to the Federal Audit Clearinghouse, and the submission is a public filing. Late submission is itself a compliance problem, and it can affect an agency's risk assessment of your organization and, in some cases, your access to future awards.

The practical consequence is that a June 30 fiscal year end means a spring deadline, and it arrives while the same finance staff are handling everything else. Organizations that cross the threshold for the first time routinely underestimate this.

How It Differs From a Standard Financial Statement Audit

	Standard financial statement audit	Single audit
What is examined	Financial statements	Financial statements plus compliance with federal program rules
Who requires it	Board policy, lenders, state charity regulators, or funders	Federal requirement once expenditure threshold is crossed
Scope of testing	Balances, transactions, and internal controls over reporting	Adds testing of allowable costs, procurement, eligibility, reporting, and subrecipient monitoring
Output	Opinion on the financial statements	Opinion plus schedule of federal expenditures, compliance opinions, and findings
Where it is filed	Usually with your board and specific funders	Publicly, with the Federal Audit Clearinghouse

If You Are Approaching the Threshold

The useful work happens before the fiscal year ends, not after.

Track federal expenditures continuously rather than calculating them at year end, and include subawards received through intermediaries. Get your time and effort documentation working while the year is in progress, because it cannot be recreated credibly afterward and it is where most findings originate. Confirm your written procurement and conflict-of-interest policies exist and are actually followed, since the auditor tests the practice rather than the document. And ask your current auditor whether they perform single audits, because not every firm does, and the ones that do are booked well in advance.

A first single audit is genuinely more work than a standard one, and no amount of preparation makes it routine in year one. What preparation changes is whether the findings are about documentation you could have kept or about decisions you cannot undo. If your organization is nearing the threshold, that is worth a conversation with an accountant who works with federally funded entities. You can compare firms on the Sam's List accountant directory and ask directly how many single audits they have completed and for which programs.

Frequently Asked Questions

What triggers a single audit requirement? Spending more than the applicable Uniform Guidance threshold in federal award money during one fiscal year, set at $1 million for fiscal years beginning on or after October 1, 2024, up from $750,000 previously. The test is based on federal funds expended, not received or awarded, and it includes federal money passed through to you as a subaward from a state or another organization. Confirm the figure for your fiscal year, since it has been updated over time.

Does a single audit replace our regular financial statement audit? It includes one. A single audit covers your financial statements and adds compliance testing on your major federal programs, so a separate financial statement audit for the same period is generally not needed, though a state charity regulator or an individual funder can still impose its own requirement, so check your other obligations. The engagement is larger, longer, and more expensive than a standard audit because of the added compliance work.

What happens if we get a finding? You prepare a corrective action plan describing how the issue will be fixed and by when. Findings are reported publicly and are considered in the risk assessment for future audits, and repeat findings draw more scrutiny. A finding is not a determination of wrongdoing, but unresolved or repeated findings can affect an agency's view of your organization.

When is the single audit report due? The earlier of thirty days after you receive the auditor's report or nine months after the end of the audit period, submitted to the Federal Audit Clearinghouse. Because the package is a public filing and late submission is itself a compliance issue, organizations with a June 30 year end should be scheduling the audit well before the calendar year closes.

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About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.