Single Audit Requirements Explained

If your nonprofit receives federal funding, you may be subject to Single Audit requirements. This comprehensive audit goes beyond standard financial statements to examine your compliance with federal grant requirements.

Here's what you need to know.

What is a Single Audit?

A Single Audit is an organization-wide audit under 2 CFR Part 200, Subpart F. The former “A-133 audit” label refers to superseded guidance. A non-federal entity that expends $1,000,000 or more in federal awards during a fiscal year beginning on or after October 1, 2024 must have a Single Audit, except when it elects a program-specific audit and meets 2 CFR 200.501(c). Fiscal years beginning before that date remain subject to the $750,000 threshold.

It examines:

1. Financial statements — Like a regular audit
2. Federal award compliance — Did you follow grant rules?
3. Internal controls — Are your processes adequate?

The audit is governed by 2 CFR 200, Subpart F (the Uniform Guidance).

The $1,000,000 Threshold

You need a Single Audit if:

• You're a non-federal entity (nonprofit, state, local government, tribe)
• You expend $1,000,000 or more in federal awards during your fiscal year (for fiscal years beginning on or after October 1, 2024)

Key points:

• “Federal awards expended” is determined under 2 CFR 200.502; it is not always identical to cash spent or received (for example, loans, loan guarantees, noncash assistance, and endowment funds have special rules)
• The threshold is per fiscal year
• It includes direct federal awards AND pass-through (subgrants)
• Purely state or local funds do not count, but federal funds passed through a state or local government do count

Example Scenarios

Scenario	Federal Expenditures	Single Audit Required?
$500K federal + $300K state	$500,000	No
$400K federal direct + $400K federal pass-through	$800,000 (below $1M)	No
$600K federal in Year 1, $800K in Year 2	$800,000 in Year 2 (below $1M)	No
$600K federal direct + $450K federal pass-through	$1,050,000	Yes

Pass-Through Funding Counts

Money that flows through a state agency or another nonprofit still counts as federal if it originated from the federal government.

How to know if it's federal:

• Check the grant agreement for an Assistance Listing number (ALN)
• Look for federal terms and conditions
• Ask the pass-through entity

The Assistance Listing number was formerly called the CFDA number. An ALN in the award documents identifies the federal assistance program.

What Gets Tested

The Single Audit has several components:

1. Financial Statement Audit

An audit of the financial statements and SEFA under GAGAS. The financial statements must reflect the financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year; they may be organization-wide or department-, agency-, or program-specific. See 2 CFR 200.510 and 2 CFR 200.514.

2. Schedule of Expenditures of Federal Awards (SEFA)

A required schedule listing all federal programs, expenditures, and pass-through information.

3. Compliance Testing

For "major programs" (selected based on risk and dollar amount), auditors test compliance with:

Compliance Requirement	What's Tested
Allowable Costs	Are expenses eligible for the grant?
Cash Management	Are you minimizing time between drawdown and disbursement?
Eligibility	Do participants/beneficiaries qualify?
Period of Performance	Are costs within the grant period?
Procurement	Did you follow required purchasing procedures?
Reporting	Are reports accurate and timely?
Subrecipient Monitoring	Are you overseeing your subgrantees?

4. Internal Control Testing

Auditors evaluate whether your controls are designed to prevent non-compliance.

Major Program Determination

Not every federal program gets compliance testing—only "major programs." The auditor determines major programs based on:

1. Risk assessment — Prior audit findings, new programs, complexity
2. Dollar threshold — Based on Uniform Guidance Type A/Type B program thresholds and risk

Type A programs (larger) are more likely to be tested than Type B (smaller).

The Audit Report Package

A Single Audit produces these deliverables:

1. Financial statements and auditor's opinion
2. Schedule of Expenditures of Federal Awards (SEFA)
3. Auditor's reports on:
   • Internal control over financial reporting
   • Compliance with federal requirements
   • Internal control over compliance
4. Schedule of Findings and Questioned Costs
5. Summary Schedule of Prior Audit Findings
6. Corrective Action Plan (if findings exist)

Filing Requirements

Single Audit reports must be submitted to the Federal Audit Clearinghouse within:

• 30 days after receipt of the auditor's report, or
• 9 months after fiscal year-end

Whichever is earlier. Late submission can affect future funding.

Submit through the GSA-operated Federal Audit Clearinghouse. The due date is the earlier of 30 calendar days after receipt of the auditor's reports or nine months after the audit period; authorized extensions can apply in significant and unavoidable circumstances. See 2 CFR 200.512.

Common Audit Findings

Finding 1: Unallowable Costs

Charging expenses that aren't eligible under the grant. Examples:

• Entertainment expenses
• Alcohol
• Costs outside the grant period
• Costs not in the approved budget

Finding 2: Inadequate Documentation

Missing or insufficient support for:

• Personnel costs (records meeting 2 CFR 200.430; a particular timesheet or signature format is not universally mandated)
• Travel expenses (receipts, purpose)
• Procurement (bids, contracts)

Finding 3: Cash Management Issues

Drawing federal funds too early. For non-state entities paid in advance, draws must be limited to minimum amounts needed and timed as closely as administratively feasible to actual, immediate cash requirements. Different rules govern states and reimbursement arrangements. See 2 CFR 200.305.

Finding 4: Subrecipient Monitoring Failures

Not adequately overseeing subgrantees:

• Missing risk assessments
• No monitoring visits or reviews
• Not verifying subrecipient audits

Finding 5: Late or Inaccurate Reporting

Federal reports (FFR, progress reports) submitted late or with errors.

Finding 6: Procurement Violations

Not following required purchasing procedures:

• No competitive bidding when required
• Missing conflict of interest documentation
• No price analysis

How to Prepare

Year-Round Preparation

Documentation:

• Keep contemporaneous records
• Document purpose for every expense
• Maintain payroll support that accurately reflects work performed and complies with the organization's internal controls; signed timesheets for every employee are not a universal Uniform Guidance requirement
• Keep procurement documentation complete

Policies:

• Written accounting policies aligned with Uniform Guidance
• Documented procurement procedures using the organization's properly selected thresholds and applicable federal, state, local, tribal, and award rules
• Travel policy that meets 2 CFR 200.475 and any award-specific limits; federal per diem rates are not a universal recipient reimbursement mandate

Monitoring:

• Grant budget and compliance reviews on a documented cadence proportionate to risk
• Required, risk-responsive subrecipient oversight activities

Example Pre-Audit Workback (60–90 Days Before)

This lead time is an internal planning example, not a deadline established by Subpart F. Set it from the auditor's PBC schedule, filing deadline, close readiness, and complexity.

• Compile list of all federal awards
• Prepare draft SEFA
• Gather grant agreements and modifications
• Compile subrecipient monitoring documentation
• Reconcile grant expenditures to GL
• Prepare PBC (Prepared by Client) list items
• Review prior year findings and corrective actions

During the Audit

• Designate a primary audit contact
• Respond promptly to auditor requests
• Be transparent about challenges
• Document explanations in writing

Audit Costs

Fees vary by organization, program mix, risk, and market. Under 2 CFR 200.425, the proportionate cost of an audit required by and performed under the Single Audit Act is generally allowable. Costs of an otherwise unnecessary non-federal audit are not automatically allowable, although a limited share may qualify as indirect cost in the circumstances stated in the rule. Apply normal allocability rules and award terms rather than charging every award equally.

When You Cross the Threshold

If you're approaching $1,000,000 in federal spending:

1. Improve documentation now — Don't wait until you're over the threshold
2. Strengthen internal controls — Easier to fix before the audit
3. Budget for audit costs — Plan for the higher expense
4. Choose an experienced auditor — Single Audits require specialized expertise

Avoiding the Threshold

Organizations may manage project timing for legitimate operational reasons, but should not manipulate recognition or delay valid charges to evade an audit. Compliance duties apply below the audit threshold.

Some organizations consider:

• Timing expenditures across fiscal years
• Declining certain grants

Caution: Follow the expenditure-recognition rules, period of performance, and award terms. Ask the auditor how unusual or noncash awards count before year-end.

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