If you’re managing federal funds for a non-federal entity in 2026, knowing when and how to perform a Single Audit (formerly OMB Circular A-133) is critical. The threshold for triggering this audit is $750,000 in federal expenditures during a fiscal year, as established under 2 CFR part 200, subpart F since 2014 White House OMB.
Quick Fix Summary: If your organization expends $750,000 or more in federal funds in a fiscal year, a Single Audit is required. This audit consolidates all federal award compliance into one comprehensive review. Use 2 CFR part 200, subpart F as the governing framework. Ensure your auditor is GAGAS-compliant and follows Uniform Guidance (UG) standards.
What’s happening: Why a Single Audit is required
This isn’t just another financial checkup—it’s a federal requirement for any non-federal entity (states, local governments, universities, nonprofits) that blows past the $750,000 mark in federal spending during a single fiscal year GAO Yellow Book. The Single Audit Act of 1984 streamlined this process, replacing the old system where each federal agency ran its own separate audits. Now, one audit covers everything.
For-profit outfits usually dodge this bullet—unless they’re getting federal funds through a pass-through entity and hit that spending threshold. The audit digs into both your financial statements and whether you’re playing by the federal award rules. At the end, you’ll get one of four possible opinions: unqualified (clean bill of health), qualified (minor issues), adverse (serious problems), or disclaimer (can’t even finish the job) AICPA.
How to actually pull off a Single Audit in 2026
- Check if you even need one: Tally up all your federal award spending for the year. If it’s $750,000 or more, you’re in the audit zone. Pull numbers from your general ledger—don’t forget any funds that came in through pass-through entities eCFR 2 CFR 200.501.
- Find the right auditor: You need an independent auditor who’s up to speed with Generally Accepted Government Auditing Standards (GAGAS). Double-check they’re familiar with the 2024 Yellow Book updates GAO Green Book.
- Let the auditor do their thing under Uniform Guidance: They’ll poke around your internal controls, make sure you’re following federal rules and award terms, and then zero in on your major programs—picked based on risk and size. Each one gets a compliance test OMB Uniform Guidance.
- Round up your paperwork: Hand over everything—financial statements, award agreements, subrecipient files, past audit findings. Make sure every federal dollar drawn down or spent lines up perfectly Treasury Department.
- Give feedback on the draft report: The auditor will hand you a report with any red flags—weak internal controls, compliance slips, questionable costs. You’ve got 30 days to respond before it becomes final GAO Single Audit Resources.
When the standard approach falls short: Alternative routes
- Program-specific audit: If you’re only spending federal money on one program and qualify under 2 CFR 200.503, you might skip the full Single Audit and do a program-specific one instead. It’s less work—just zeroes in on that single program OMB Uniform Guidance.
- Fix what’s broken ASAP: If the audit uncovers problems, don’t wait. Roll out corrective actions immediately and send your plan to the overseeing agency within 30 days. Drag your feet, and you could kiss future funding goodbye Catalog of Federal Domestic Assistance.
- Get help from the feds: Stuck on a tricky audit or high-risk scenario? Reach out to the cognizant or oversight agency tied to your federal funds. They can clarify confusing rules and help sort out disputes over findings USAID Audit Resolution.
How to stay off the audit radar entirely
Want to avoid the whole mess? Here’s how:
- Keep a running tab of federal spending: Use accounting software like QuickBooks, Sage, or Workday to watch your federal awards like a hawk. Flag anything that pushes you close to $750,000 IRS Audit Guide.
- Train your team on the rules: Make sure your finance and grants folks know 2 CFR part 200 inside out—especially the parts about allowable costs, procurement rules, and keeping tabs on subrecipients. Mess these up, and auditors will notice CDFI Fund Compliance.
- Run a mock audit each year: Pretend you’re doing a real Single Audit using the latest OMB Compliance Supplement. Spot issues early and fix them before the real deal Federal Funds Information for States.
- Hire (or assign) a compliance pro: If your org lives on federal funds, a dedicated compliance officer keeps everything audit-ready. They manage files, coordinate with auditors, and keep the chaos in check Council of State Governments.
Heads up: The $750,000 threshold’s been locked in since 2014 and applies to fiscal years starting December 26, 2014 or later. OMB Circular A-133? Fully replaced by 2 CFR part 200, subpart F. Always double-check your fiscal year start date to be sure you’re on the right side of the rules OMB Circulars Archive.
