If your organization spent $750,000 or more in federal funds during its last fiscal year, a Single Audit is required by federal regulation.
Quick Fix Summary:
If your entity expended $750,000 or more in federal funds in a single fiscal year, you must complete a Single Audit under 2 CFR Part 200, Subpart F. Gather all federal award documentation, compile the Schedule of Expenditures of Federal Awards (SEFA), and engage a qualified auditor. Submit the audit report via the Federal Audit Clearinghouse within nine months after your fiscal year ends or risk penalties or loss of funding.
What happens when a Single Audit is required?
When a Single Audit kicks in, it’s not just another box to check. This federal requirement applies to non-federal entities—think nonprofits, state agencies, tribes, or universities—that blow past the $750,000 mark in federal awards during a single fiscal year. The threshold hasn’t budged since the Uniform Guidance (2 CFR Part 200, Subpart F) updates in 2014, and it’s staying put through at least 2026. The audit digs into two key areas: your financial statements and how well you followed the rules for major federal programs. The big questions? Were funds spent properly? Do your internal controls hold up? Did you follow federal laws and cost principles? Miss the mark, and you could face disallowed costs, repayment demands, or even lose future funding.
Here’s a quirk: CARES Act funds and PPP loans don’t count toward this threshold, even if your total federal spending tops $750,000. But all other federal awards—USDA, HUD, DOE, you name it—definitely do.
How do you prepare and execute a Single Audit?
Step 1: Double-check if you’re on the hook
First things first: tally up every federal dollar your organization received last fiscal year. Pull your general ledger and award agreements to confirm the total. If it’s $750,000 or more, you’re in the Single Audit zone.
Step 2: Round up all your federal award paperwork
- Dig up every award agreement and grant notification you’ve received.
- Find the Catalog of Federal Domestic Assistance (CFDA) number for each program.
- Pull together award amounts, performance periods, and any reporting requirements tied to those funds.
Step 3: Build the Schedule of Expenditures of Federal Awards (SEFA)
The SEFA is basically a ledger of every federal dollar that came in and where it went. Use 2 CFR §200.510 as your roadmap. Make sure every program is listed—yes, even the ones under $750,000—and that the numbers match your financial statements. Triple-check against your chart of accounts and bank records to avoid surprises.
Step 4: Find an auditor who knows the drill
You need an auditor fluent in government auditing standards—otherwise known as the Yellow Book. The Government Accountability Office (GAO) tweaks these standards regularly, so confirm your auditor is up to speed with the latest version. And independence matters: no conflicts of interest allowed.
Step 5: File your audit report—on time
You’ve got nine months after your fiscal year ends to submit the full audit package to the Federal Audit Clearinghouse. That package includes:
- Your financial statements
- The SEFA
- The auditor’s report (unqualified, qualified, adverse, or disclaimer)
- Any findings or questioned costs, if the auditor flagged anything
What if you miss the deadline or the audit gets rejected?
Let’s say the nine-month window slipped by, or the audit came back with major weaknesses. Don’t panic—there are still moves you can make.
- Ask for more time
Reach out to the cognizant agency—the one that gave you the biggest award—and request an extension. Explain why you’re late and propose a new timeline. No guarantees, but they might cut you some slack if your reasons are legit. - Try a program-specific audit (if you qualify)
Some funders will let you skip the full Single Audit if all your federal money comes from one program or agency. Check with your grant officer first to see if this route is open to you. - Bring in a compliance pro
If internal controls are a mess or the findings were brutal, a consultant who specializes in Uniform Guidance can help. They’ll guide you through fixing the issues and might even help you navigate a re-audit or corrective action plan from the feds.
How can you avoid needing a Single Audit down the road?
You can’t always control how much federal funding you receive, but you can stack the deck in your favor with solid financial habits.
| Action | How to Do It | Tools |
|---|---|---|
| Set up a grant management system | Keep everything in one place: award start/end dates, CFDA numbers, and how much you’ve drawn down. Centralized tracking saves headaches later. | QuickBooks Enterprise, Salesforce Nonprofit Cloud, or open-source solutions like OFBiz |
| Run quarterly internal reviews | Every three months, reconcile your SEFA drafts to spot discrepancies early. Automate where you can—flag unallowable costs like lobbying or entertainment before they become problems. | Excel with macros, Sage Intacct, or NetSuite |
| Train your team on the rules | Make sure your accounting and program staff know what’s allowed under 2 CFR Part 200. Schedule annual training using resources from CFO.gov or the OMB. | OMB Circular A-133 (archived) and Uniform Guidance docs |
| Keep an eye on subrecipients | If you’re passing federal funds to others, verify they’re following the rules too. Require proof of compliance before cutting checks and bake audit clauses into your subawards. | Subaward templates with compliance clauses |
| Set up a compliance calendar | Track every reporting deadline—SF-425, progress reports, you name it—with a shared calendar that sends reminders automatically. | Google Calendar, Microsoft Outlook, or project tools like Asana |
Bottom line? If your organization hits that $750,000 mark, a Single Audit isn’t optional. The best defense is a good offense: tight financial controls and consistent compliance tracking. Skip it, and you’re playing with fire—costly findings, reputational damage, and lost federal trust aren’t worth the gamble.
