Guides / Single audits
Single audit requirements.
An organization that spends enough federal money in a year has to have a single audit, a compliance audit under Uniform Guidance that goes well beyond an ordinary financial statement audit. The threshold changed recently, it is measured on expenditures rather than awards, and organizations regularly discover the requirement months after the fiscal year they should have been planning for it.
The threshold
When a single audit is required
The federal threshold is now $1 million
Under the 2024 revisions to Uniform Guidance, a non-federal entity that expends $1,000,000 or more in federal awards during its fiscal year must have a single audit. The threshold applies to fiscal years beginning on or after October 1, 2024. For earlier fiscal years the prior $750,000 threshold governs, so which figure applies depends on when your year began.
Expended, not awarded or received
The test counts what you actually spent during the year across all federal programs, including funds passed through from a state or another entity. A large multi-year grant received in one year but spent over three is measured by the spending in each year. Organizations that watch award letters rather than expenditures routinely misjudge this.
Pass-through funding still counts
Money received from a state agency, a county, or another nonprofit that originated federally is a federal award to you. Identifying it requires reading the award documents for the assistance listing number, and it is the most commonly missed component of the calculation.
A program-specific audit is sometimes an option
Where all federal spending relates to a single program and the program’s requirements do not mandate a financial statement audit, a program-specific audit may be performed instead of a full single audit. It is narrower and generally less costly.
Below the threshold, records still matter
An organization under the threshold is not exempt from the underlying compliance requirements or from the awarding agency’s right to review. It is exempt only from the audit. Grant agreements frequently impose their own audit or reporting conditions independently.
Preparation and deadlines
What the year requires
The reporting package has a firm deadline
The audit reporting package and data collection form go to the Federal Audit Clearinghouse by the earlier of 30 days after receipt of the auditor’s report or nine months after the end of the audit period. Late submission is visible to every current and prospective funder, because the clearinghouse is public.
The schedule of expenditures of federal awards drives everything
The SEFA lists each program, its assistance listing number, the pass-through entity and identifying number, and the amount expended. Major programs are selected from it on a risk-based basis, so an inaccurate SEFA leads directly to the wrong programs being tested. It is the auditee’s responsibility, not the auditor’s.
Compliance testing goes beyond the numbers
The auditor tests compliance requirements applicable to each major program, which can include allowable costs, eligibility, matching, period of performance, procurement and suspension and debarment, reporting, and subrecipient monitoring. Documentation of these is created during the year or not at all.
Findings carry forward
Audit findings require a corrective action plan, and prior findings are tracked in a summary schedule that follows the organization into the next audit. Repeat findings raise risk assessments and can affect future funding, which is why the response to a first finding matters more than its size suggests.
State thresholds apply separately
Florida’s Single Audit Act imposes its own audit requirement at $750,000 in state financial assistance expended, measured separately from federal funds. New York imposes audit and reporting conditions through agency contracts and, for registered charities, through the Charities Bureau’s own revenue-based review and audit thresholds. Meeting the federal test does not answer the state one.
This page is general information about how the rules work, not tax or legal advice for a specific situation. Facts change outcomes. Talk with the firm before acting on anything here.
Questions
Common questions
Is the threshold $750,000 or $1 million?
Both, depending on the year. $1,000,000 applies for fiscal years beginning on or after October 1, 2024. Fiscal years that began before that date use the previous $750,000 threshold. A June 30 year-end organization, for example, moved to the new threshold with its fiscal year beginning July 1, 2025.
We received $1.4 million but only spent $600,000. Do we need an audit?
Based on that fact alone, no. The test is expenditures during the fiscal year, so an organization holding unspent award funds may fall below the threshold in one year and exceed it in the next. Multi-year awards need to be tracked by spending rather than by award size.
Does state and local funding count toward the federal threshold?
Only if it originated federally and was passed through to you. Purely state or local money does not count federally, though Florida and New York have their own separate requirements that it may count toward.
How early should we start preparing?
Before the fiscal year ends, and ideally at the point the funding is accepted. The compliance documentation the audit tests, procurement records, time and effort documentation, subrecipient monitoring, has to be created contemporaneously. Nothing about a single audit can be assembled retroactively.
What happens if we should have had one and did not?
Funders can suspend or withhold payments, require the audit to be performed late, and treat the failure as a compliance finding affecting future awards. It is fixable, and the sooner it is addressed the less it costs in funding relationships.
The audit is easier if the year was.
We help organizations determine whether the threshold is met, build the schedule of expenditures of federal awards, and get the records and controls in shape before fieldwork begins.