Single Audit: what changes when you spend $1 million in federal awards

What is a Single Audit?

A Single Audit is an organization-wide audit required by the Single Audit Act and Subpart F of the Uniform Guidance (2 CFR Part 200). Instead of each federal agency auditing its own grants, one audit covers both your financial statements and your compliance with federal program requirements. It is performed under generally accepted auditing standards and Government Auditing Standards (the "Yellow Book").

What is the Single Audit threshold?

The 2024 revisions to the Uniform Guidance raised the threshold from $750,000 to $1,000,000 in federal expenditures. The change was intended to reduce the audit burden on smaller recipients while keeping oversight focused on larger federal funding.

Which fiscal year does the $1,000,000 threshold apply to?

The new threshold applies to fiscal years beginning on or after October 1, 2024. Examples:

What counts toward the $1,000,000?

• Expenditures, not awards. A $3 million, three-year grant with $800,000 spent this year counts as $800,000.
• All federal programs combined. Several small awards from different agencies are added together.
• Pass-through funds. Money received from a state agency, county, city or another nonprofit counts if it's federal underneath. Look for an Assistance Listing number (formerly CFDA) in the award document.
• Non-cash assistance and loans. Federal loans, loan guarantees, donated commodities and other non-cash assistance can count, under specific rules.

Payments where you are a contractor (a vendor selling goods or services) rather than a subrecipient generally don't count. The distinction matters and depends on the substance of the relationship, not just the label on the agreement.

What gets tested in a Single Audit?

On top of the financial statement audit, the auditor:

1. Determines major programs. Programs are classified as Type A or Type B by size, then assessed for risk. Higher-risk programs, and enough programs to meet coverage requirements, are tested in depth.
2. Tests compliance requirements that are direct and material to each major program, following the OMB Compliance Supplement. Common areas include allowable costs, cash management, eligibility, period of performance, procurement and suspension and debarment, reporting, and subrecipient monitoring.
3. Tests internal controls over compliance. The auditor must plan and perform tests of controls to support a low assessed level of control risk for each major program.
4. Reports findings. Findings and any questioned costs appear in a schedule of findings and questioned costs. Management then prepares a corrective action plan and a summary of prior audit findings.

Organizations that qualify as low-risk auditees, based on clean prior audits and timely filing, can have a smaller portion of their federal spending tested as major programs.

What is a SEFA?

The Schedule of Expenditures of Federal Awards lists every federal program you spent money on during the year, by federal agency and Assistance Listing number, including pass-through entity names and identifying numbers. It shows amounts passed to subrecipients and must reconcile to your general ledger. The SEFA is management's responsibility, and errors in it are a common audit finding. Build it during the year, not after.

When is the Single Audit due?

The reporting package must be submitted to the Federal Audit Clearinghouse (FAC) by the earlier of:

• 30 calendar days after you receive the auditor's report, or
• nine months after the end of the fiscal year.

For a December 31 year-end, that's September 30 at the latest. The submission includes the financial statements, the SEFA, the auditor's reports, the findings schedule, the corrective action plan and the data collection form. Audit reports are publicly available on the FAC.

Other 2024 Uniform Guidance changes worth knowing

• De minimis indirect cost rate: raised from 10% to up to 15% of modified total direct costs.
• Equipment threshold: raised from $5,000 to $10,000 per unit.
• Subaward amount in MTDC: the portion of each subaward included in modified total direct costs increased from $25,000 to $50,000.

These changes generally apply to awards made or amended on or after October 1, 2024. Check each award's terms.

What if you're below $1,000,000?

You are exempt from the federal Single Audit for that year, but your records must still be available for review by federal agencies, pass-through entities and the GAO. Below the threshold:

• Pass-through entities may still require a financial statement audit or agreed-upon procedures under their own rules.
• State law or state grants may require an audit (see state thresholds).
• You still have to comply with the Uniform Guidance cost principles and award terms.

How to prepare for a Single Audit

1. Track federal spending monthly by award, so you know early if you'll cross $1,000,000.
2. Maintain award files: award letters, budgets, modifications, Assistance Listing numbers and pass-through identifying numbers.
3. Document written policies the Uniform Guidance requires, including procurement, financial management, allowable costs, conflicts of interest and travel.
4. Support time and effort: payroll charged to grants needs documentation that reflects actual work performed.
5. Monitor subrecipients and keep evidence of risk assessments and reviews.
6. Prepare a draft SEFA reconciled to the general ledger before fieldwork.
7. Engage your auditor early. The nine-month deadline is firm, and audit calendars fill up.

Frequently asked questions

GreyWood CPA PLLC is a licensed CPA firm headquartered in Richmond, Virginia (Virginia Board of Accountancy firm license #134961), serving nonprofits, community associations and businesses nationwide. This article is general information as of October 28, 2026, not legal or tax advice for a specific organization. Rules change, so confirm current requirements before acting.