Does your health nonprofit need a Single Audit?

Add up every federal dollar you spent during the fiscal year, whether it came directly from a federal agency or passed through a state, county or another nonprofit. If the total is $1,000,000 or more, you need a Single Audit for that year.

• Count expenditures, not awards. A three-year $2M grant spent at $600,000 a year doesn't trigger it on its own.
• Pass-through money counts. Federal block grant funds a state passes to you are federal awards.
• Loans and some non-cash assistance count too, depending on the program.

Spending under $1,000,000? You are exempt from the federal audit requirement that year, but your grant agreements, state rules or lenders may still require a financial statement audit.

Federal health programs that commonly trigger a Single Audit

Each program has its own compliance rules, published by the federal government in the annual Compliance Supplement. Those rules decide what we test.

How auditors choose which programs to test

Not every federal program is tested in depth. The auditor selects major programs using a risk-based process:

• Type A programs are the larger ones. For organizations spending up to $34 million in federal awards, any program with $1,000,000 or more in expenditures is Type A.
• Type B programs are the smaller ones. Some are selected based on risk.
• Programs with prior audit findings or new, complex rules are more likely to be selected.

Organizations that qualify as low-risk auditees get fewer programs tested. To qualify, you need two years in a row of timely Single Audits, clean opinions, no material weaknesses, no going-concern doubt, and no significant findings on Type A programs.

What a Single Audit tests

For each major program, we test the compliance requirements that the Compliance Supplement marks as applicable. In health programs the ones that most often produce findings are:

• Allowable costs and cost principles, including how shared costs are allocated across grants
• Eligibility, such as sliding-fee discount programs and patient eligibility for funded services
• Reporting, meaning federal financial reports that match your books
• Procurement, with written procurement policies followed for purchases
• Subrecipient monitoring if you pass funds on to other organizations
• Period of performance, with costs charged to the right grant year

We also report on internal control over compliance, and on your financial statements under Government Auditing Standards.

The SEFA, the reporting package and the Clearinghouse

The Schedule of Expenditures of Federal Awards (SEFA) lists every federal program you spent money on, with its Assistance Listing number and amount. It is the starting point of the audit, and errors in it are a common finding.

After the audit, the reporting package (financial statements, SEFA, auditor's reports, findings and your corrective action plan) and a data collection form are submitted to the Federal Audit Clearinghouse. We support you through that submission.

How a Single Audit engagement works

1. Scoping callDay 1

   A 30-minute call about your organization, who needs the report and your deadline.

2. Fixed-fee proposalWithin 1–3 business days

   Scope, report type, timeline and one fixed fee, in writing.

3. One request listWeek 1

   Everything we need, uploaded through a secure portal.

4. Fieldwork and draftSet in your proposal

   Remote testing, then a draft for your review.

5. Signed reportOn or before the agreed date

   A CPA partner signs, and we walk you or your board through the results.

Why health nonprofits choose Greywood CPA

• Fixed fee, agreed first. No hourly billing and no surprise invoices.
• Senior people on your file. Every engagement is led by a senior professional and signed off by a CPA partner. Meet the team.
• Licensed and registered. Virginia Board of Accountancy firm license #134961, AICPA member, with out-of-state registrations where required. See our credentials.

Related

Health nonprofit Single Audit FAQs