Single Audit Requirements Explained

If your nonprofit spends federal award funds, you may need a Single Audit. A Single Audit covers your financial statements, and it also tests whether you followed the rules of your federal awards.

What a Single Audit is

A Single Audit is an organization-wide audit under 2 CFR Part 200, Subpart F. People sometimes call it an "A-133 audit," but OMB Circular A-133 has been replaced by Subpart F.

A non-federal entity that spends $1,000,000 or more in federal awards in a fiscal year that begins on or after October 1, 2024, must have a Single Audit. The exception is an entity that qualifies for and elects a program-specific audit under 2 CFR 200.501(c) or (d). Fiscal years that began before October 1, 2024, use the old $750,000 threshold.

A Single Audit examines three areas:

1. Your financial statements, as in a regular audit
2. Your compliance with federal award requirements
3. Your internal controls over compliance

The $1,000,000 threshold

You need a Single Audit if both of these statements are true:

• You are a non-federal entity, e.g., a nonprofit, a state or local government, an Indian Tribe, or an institution of higher education.
• You spend $1,000,000 or more in federal awards during a fiscal year that begins on or after October 1, 2024.

Keep these points in mind:

• 2 CFR 200.502 decides when federal awards count as expended. The amount is not always the same as cash spent or received, because loans, loan guarantees, noncash assistance, and endowment funds have special rules.
• You measure the threshold for each fiscal year.
• The threshold includes awards you receive directly from a federal agency and federal awards passed through to you by another organization.
• Purely state or local funds do not count, but federal funds passed through a state or local government do count.
• Payments you receive as a contractor for goods or services do not count toward the threshold.

Examples

Scenario	Federal expenditures	Single Audit required?
$500,000 federal and $300,000 state	$500,000	No
$400,000 direct federal and $400,000 federal pass-through	$800,000	No
$600,000 federal in year 1 and $800,000 in year 2	$800,000 in year 2	No
$600,000 direct federal and $450,000 federal pass-through	$1,050,000	Yes

Pass-through funding counts

Money that comes to you through a state agency or another nonprofit still counts as federal if it started as a federal award. To find out whether funding is federal, check the agreement for an Assistance Listing number (ALN) and federal terms and conditions, or ask the pass-through entity.

The Assistance Listing number used to be called the CFDA number. It identifies the federal program that funds the award.

What gets tested

Financial statement audit

The auditor audits your financial statements and the Schedule of Expenditures of Federal Awards (SEFA) under Government Auditing Standards. The financial statements must show your financial position, changes in net assets, and, where appropriate, cash flows for the fiscal year. See 2 CFR 200.510 and 2 CFR 200.514.

Schedule of Expenditures of Federal Awards

The SEFA lists each federal program, the amount you spent, and the pass-through entity for each pass-through award.

Compliance testing

The auditor tests compliance for your major programs. The OMB Compliance Supplement lists the types of requirements an auditor may test, including those in this table.

Compliance requirement	What the auditor checks
Allowable costs	Whether the costs are allowed under the award
Cash management	Whether you limited the time between drawing federal cash and paying costs
Eligibility	Whether participants or beneficiaries qualified
Period of performance	Whether costs fall within the award period
Procurement	Whether you followed the required purchasing procedures
Reporting	Whether your reports are accurate and on time
Subrecipient monitoring	Whether you oversee your subrecipients

Internal control testing

The auditor evaluates whether your controls are designed and working to prevent noncompliance.

Major program determination

The auditor tests compliance only for major programs, which the auditor selects under 2 CFR 200.518. First, the auditor labels the larger programs as Type A programs and the rest as Type B programs. For an entity that spends up to $34 million in federal awards, a Type A program is one with $1,000,000 or more in expenditures. Second, the auditor assesses the risk of each program, using factors such as prior audit findings, new programs, and complexity. High-risk Type A programs are audited as major programs.

The reporting package

Under 2 CFR 200.512, the reporting package includes:

1. The financial statements and the SEFA
2. The summary schedule of prior audit findings
3. The auditor's reports, including the opinions, the reports on internal control and compliance, and the schedule of findings and questioned costs
4. A corrective action plan, when there are findings

Filing requirements

You submit the reporting package and the data collection form to the Federal Audit Clearinghouse (FAC), which GSA operates. The due date is the earlier of 30 calendar days after you receive the auditor's reports or nine months after the end of the audit period. If the due date falls on a weekend or federal holiday, the package is due the next business day. Your cognizant or oversight agency for audit may approve an extension when the nine-month deadline would place an undue burden on you. See 2 CFR 200.512.

Late filing has consequences. For example, you cannot qualify as a low-risk auditee under 2 CFR 200.520 unless you filed on time for the two prior audit periods, and a low-risk auditee receives reduced audit coverage.

Common audit findings

Unallowable costs

Unallowable costs are expenses the award does not allow. Examples include entertainment, alcohol, costs outside the award period, and budget changes made without a required prior approval.

Inadequate documentation

Auditors often find missing or weak support for personnel costs, travel, and procurement. For personnel costs, you need records that meet 2 CFR 200.430, although no single timesheet or signature format is required. For travel, keep receipts and the business purpose, and for procurement, keep bids, quotes, and contracts.

Cash management issues

Cash management findings usually involve drawing federal funds too early. A non-state entity that receives advance payments must limit each draw to the minimum amount needed and time it as close as is administratively feasible to the actual payment of costs. States and reimbursement arrangements follow different rules. See 2 CFR 200.305.

Subrecipient monitoring failures

Subrecipient monitoring findings involve weak oversight of subrecipients, e.g., missing risk assessments, no review of subrecipient reports, or no check that required subrecipient audits were done.

Late or inaccurate reporting

Reporting findings involve federal reports, such as the Federal Financial Report (SF-425) or progress reports, that were late or contained errors.

Procurement violations

Procurement findings involve purchases that did not follow the required procedures. Examples include no competition when competition was required, missing conflict of interest records, and no price or cost analysis.

How to prepare

Throughout the year

Keep your documentation complete:

• Keep records as the work happens.
• Record the business purpose of each expense.
• Keep payroll records that accurately reflect the work performed and follow your internal controls. Signed timesheets for every employee are not a Uniform Guidance requirement.
• Keep complete procurement files.

Keep your policies current:

• Written accounting policies that follow the Uniform Guidance
• Written procurement procedures that use your documented thresholds and follow federal, state, local, tribal, and award rules
• A written travel policy that meets 2 CFR 200.475 and any award limits. The rule bases allowable lodging and subsistence on your written policy, so federal per diem rates are not required for every recipient.

Monitor your awards:

• Review grant budgets and compliance on a documented schedule that matches the risk.
• Monitor subrecipients in proportion to their risk.

Example workback plan for 60 to 90 days before fieldwork

Subpart F does not set the timing below. Set your own dates from your auditor's request list, the filing deadline, and how ready your books are.

• List all federal awards.
• Prepare a draft SEFA.
• Gather award agreements and amendments.
• Gather subrecipient monitoring records.
• Reconcile grant expenditures to the general ledger.
• Prepare the items on the auditor's request list, often called the PBC (prepared by client) list.
• Review prior findings and the status of corrective actions.

During the audit

• Name one main contact for the auditor.
• Respond to requests promptly.
• Tell the auditor about known problems.
• Put explanations in writing.

Audit costs

Audit fees depend on your organization, your programs, risk, and the local market. Under 2 CFR 200.425, a reasonably proportionate share of the cost of a Single Audit is allowable. Audit costs are unallowable when a required audit was not done or was not done according to Subpart F. If you spend less than $1,000,000 in federal awards and are exempt, the cost of auditing your organization is generally unallowable on federal awards, with limited exceptions in the rule. Allocate allowable audit costs using your normal allocation methods and award terms, not an equal charge to every award.

When you approach the threshold

If you expect to approach $1,000,000 in federal expenditures, follow these steps:

1. Improve documentation now, before you cross the threshold.
2. Strengthen internal controls, because problems are easier to fix before the audit.
3. Budget for the higher audit cost.
4. Choose an auditor with Single Audit experience.

Avoiding the threshold

Some organizations time projects across fiscal years or decline some grants for valid operational reasons. You must not delay valid charges or change how you recognize expenditures to avoid an audit. Follow the expenditure rules in 2 CFR 200.502, the period of performance, and the award terms. Ask your auditor before year-end how unusual or noncash awards count. You still have to follow the award rules when you are below the threshold.

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How GrantLink supports this today

GrantLink keeps grant allocations based on QuickBooks Online transactions, along with budget lines, fund receipts, funding shares, documents, reports, and activity history. You can use these records when you prepare for an audit. GrantLink does not replace funder guidance, your accounting policy, or review by your accountant or auditor.