Any organization that spent $1 million or more in federal awards during its fiscal year needs a Single Audit. That threshold moved in 2024, up from $750,000, and it’s the first change in a decade. A lot of nonprofits, higher education institutions, and government entities are rechecking their status because of it. This article covers what a Single Audit is, who it applies to, what counts toward the threshold, what the audit covers, how the process works, and where organizations tend to run into trouble. What Is a Single Audit? A Single Audit is an organization-wide audit that combines a financial statement audit with a compliance audit of federal award spending. Instead of a separate audit for each grant, one audit covers all of an organization’s federal programs at once. The requirement traces back to the Single Audit Act of 1984, amended in 1996. The Office of Management and Budget (OMB) Uniform Guidance, codified at 2 CFR Part 200, Subpart F, governs it today. The idea behind it is efficiency: one audit in place of program-by-program reviews saves both the recipient organization and the federal government time and cost. The table below compares a Single Audit to a standard financial statement audit: Standard financial statement audit Single Audit Scope Financial statements only Financial statements plus federal compliance Testing depth Focused on material misstatement risk Adds testing of program-specific compliance requirements Internal controls Assessed to plan audit procedures Separately tested and reported on for each major program Who Needs a Single Audit Based on the 2024 revision, the threshold for Single Audit requirement is now $1 million in federal awards expended in a fiscal year. The change applies to fiscal years beginning on or after 1 October 2024, so the earliest audits affected cover fiscal years ending 30 September 2025 or later. An organization with a calendar-year fiscal year sees the new threshold apply starting 1 January 2025. One with a fiscal year that starts 1 July sees it apply starting 1 July 2025. The requirement applies to: Nonprofits Higher education institutions State and local governments Tribal governments For-profit entities follow different rules under 2 CFR 200.501, generally a program-specific audit rather than a full Single Audit. What Counts as a Federal Award for the Threshold Federal awards expended include: Grants Cooperative agreements Loans and loan guarantees, counted based on the outstanding balance at the start of the audit period Donated property Food commodities Insurance Medicare and Medicaid payments for patient care generally don’t count toward the threshold. Medicare patient-care payments are excluded outright. Medicaid patient-care payments are excluded too, unless a state requires them to be treated as federal awards because reimbursement runs on a cost-reimbursement basis. What a Single Audit Covers Financial statement audit. A GAAP-based audit of the organization’s financial statements, the same core work as a standard audit. Schedule of Expenditures of Federal Awards (SEFA). The organization prepares this schedule itself. It lists every federal program by Assistance Listing Number (formerly CFDA number), program name, amount expended, and any amounts passed through to subrecipients. Major program determination. Not every federal program gets tested the same way. Auditors sort programs into Type A (larger dollar programs) and Type B (smaller ones) and apply a risk-based approach to decide which ones to audit as “major.” For organizations with $1 million to $34 million in total federal expenditures, the Type A threshold is $1 million. Auditors also have to hit a coverage minimum across all major programs combined: at least 20% of total federal expenditures for a low-risk auditee, or 40% for any other auditee. Internal controls testing. Auditors test the controls over compliance for each major program, separate from the controls testing done for the financial statement audit. Compliance testing. Auditors test whether the organization followed the specific requirements attached to each major program, covering allowable costs, eligibility, procurement, reporting, and more. The Audit and Reporting Process, Step by Step The auditee, the organization receiving the funds, is responsible for: Arranging the audit with a qualified CPA firm Preparing the SEFA Giving the auditor access to records and supporting documentation Responding to any findings with a corrective action plan The auditor is responsible for: Testing internal controls over compliance Testing compliance with program requirements Determining major programs Issuing opinions on the financial statements and on compliance for major programs Once the audit wraps up, the organization submits the full reporting package, including the Data Collection Form, to the Federal Audit Clearinghouse (FAC). The deadline is the earlier of 30 days after receiving the auditor’s report or nine months after the fiscal year ends. Missing that deadline is itself treated as a compliance issue and can affect how federal agencies assess the organization’s risk on future awards. Staying Consistent Most Single Audit findings involve documentation and consistency problems, not fraud. The issues are usually preventable with better record-keeping. Common issues: An incomplete or inaccurate SEFA. Missing awards, wrong Assistance Listing Numbers, or missing subrecipient detail. Weak documentation trails. Auditors can’t connect an expenditure back to the award, the framework that governed it, and the internal policy that applied. Late FAC submissions. Usually the result of evidence-gathering that starts too close to the deadline instead of running alongside the year. Inconsistent treatment. Similar transactions get handled differently across periods or programs because there’s no shared reference point for how they were treated last time. How to Prepare (and Stay Ready Year-Round) Organizations that handle Single Audits well don’t treat them as a year-end scramble. A few habits make the difference: Start SEFA preparation early and reconcile it against the general ledger continuously, not in the weeks before the audit. Keep a clear system of record that connects each expenditure to the specific award, the framework that governs it, and the internal policy behind it. Maintain one source of truth for standards, methodology, and prior-year treatment, so testing goes faster and conclusions stay consistent from one audit to the next. That last point is where audit teams tend to lose time. When guidance, prior-year work papers, and internal policy live in separate places, every question means another search through email threads or shared drives. A connected system of record makes precedent easy to find and treatment easy to defend, which matters just as much to the auditor as it does to the finance team preparing for the visit. Moving Forward With Confidence Trullion helps accounting and audit teams keep federal award data, standards, and prior-year work connected, so Single Audit prep doesn’t start from a blank spreadsheet each year. See how Trullion supports faster, error-free audits. FAQs What is a Single Audit? A Single Audit is a combined financial statement and compliance audit required for organizations that spend $1 million or more in federal awards in a fiscal year. OMB’s Uniform Guidance at 2 CFR Part 200, Subpart F governs the requirement. What is the Single Audit threshold in 2025? The threshold is $1 million in federal awards expended in a fiscal year. OMB raised it from $750,000 as part of its 2024 revisions to the Uniform Guidance, effective for fiscal years beginning on or after 1 October 2024. Who is required to have a Single Audit? Nonprofits, higher education institutions, state and local governments, and tribal governments that expend $1 million or more in federal awards during their fiscal year need one. For-profit entities generally fall under different audit rules. What is the difference between a Single Audit and a financial statement audit? A financial statement audit only covers whether an organization’s financial statements are presented fairly. A Single Audit adds a compliance audit of federal award spending, testing internal controls and program requirements for major federal programs on top of the financial statement work. What is a SEFA and who prepares it? A Schedule of Expenditures of Federal Awards (SEFA) lists every federal program an organization received, including the Assistance Listing Number, program name, and amount expended. The organization being audited prepares the SEFA, and the auditor tests it as part of the Single Audit. What happens if an organization misses the Single Audit deadline? A late submission is treated as a compliance issue on its own. It can affect an organization’s risk assessment on current and future federal awards and may keep it from qualifying as a low-risk auditee in future audits.