TLDR
The single audit threshold is $1,000,000 in federal expenditures in a fiscal year — updated from $750,000, effective for fiscal years ending September 30, 2025 or later. If your organization crosses that line, you need an independent audit of both your financial statements and your compliance with federal program requirements. The audit results are publicly filed with the Federal Audit Clearinghouse and reviewed by every federal funder.
The single audit is the federal government’s primary accountability mechanism for nonprofit organizations receiving federal funds. It is not a financial statement audit with a federal component added — it is a dual-purpose engagement that examines both the organization’s finances and its compliance with federal program requirements simultaneously.
The $1,000,000 Threshold
The current threshold is $1,000,000 in federal awards expended in a fiscal year. This figure was updated from the prior $750,000 threshold in the 2024 revisions to 2 CFR Part 200, effective for fiscal years ending September 30, 2025 or later.
Organizations tracking their federal expenditures against the old $750,000 threshold should update their monitoring — and confirm whether their fiscal year end date means the new threshold applies to their next audit.
The threshold applies to total federal expenditures, not to any single award. An organization with four federal grants of $250,000 each, all active in the same fiscal year, meets the threshold. So does an organization receiving $1.1 million in state pass-through funding where the state funds originated from a federal program — because those are federal awards expended, even though the immediate funder is the state.
The Two-Part Structure
The single audit consists of two simultaneous engagements conducted by the same auditor.
Financial statement audit. The auditor examines the organization’s financial statements and issues an opinion on whether they are presented fairly in accordance with generally accepted accounting principles. This is the same as any standard financial statement audit.
Federal program compliance audit. The auditor identifies the organization’s major federal programs, tests compliance with the requirements applicable to each major program (as specified in the OMB Compliance Supplement), and reports on any findings. This component produces the additional reports on internal control over financial reporting, internal control over compliance, and compliance with requirements applicable to major programs that are unique to the single audit.
What Findings Mean
Single audit findings create a compliance record that persists. They appear in the Federal Audit Clearinghouse, where they are visible to every federal funder and pass-through entity. They require a corrective action plan. They trigger a management decision process. And they appear on subsequent single audits as prior-year findings until resolved.
Organizations that receive findings are not automatically barred from future federal funding. But findings affect risk assessments for future awards, can trigger enhanced monitoring conditions, and in serious cases can result in cost disallowance or award termination.
The most effective response to any finding is a substantive corrective action plan with a realistic timeline — and then demonstrably implementing it before the next audit.
See Also
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Get the Single Audit Prep Timeline
A 90-day countdown timeline for single audit preparation — working backward from fiscal year end with specific tasks at each milestone. Delivered by email.
Source: 2 CFR 200.501, 2024 OMB revisions to the Uniform Guidance
Q&A
What is the single audit expenditure threshold?
The threshold is $1,000,000 in federal awards expended in a fiscal year. This was updated from the prior threshold of $750,000 under the 2024 revisions to 2 CFR Part 200, effective for fiscal years ending September 30, 2025 or later. Organizations should verify which threshold applies to their specific audit period based on their fiscal year end date.
Q&A
What is the difference between a single audit and a financial statement audit?
A financial statement audit examines whether the organization's financial statements are presented fairly in accordance with generally accepted accounting principles. A single audit includes the financial statement audit but also adds a compliance audit of the organization's federal programs — testing whether expenditures and activities complied with applicable federal laws, regulations, and award terms. The single audit produces additional reports (on internal control and compliance) that are not part of a standard financial statement audit.
Q&A
What federal awards count toward the $1,000,000 threshold?
All federal awards expended during the fiscal year count, including: direct federal grants and cooperative agreements, federal awards received as sub-awards from pass-through entities (state agencies, other nonprofits), and awards of federal property or services where the value is expended. Loans guaranteed by the federal government may also count. The SEFA documents all federal expenditures and is used to determine whether the threshold is met.
Q&A
How are major programs selected for testing in a single audit?
Auditors use the risk-based approach in 2 CFR 200.518. Programs are classified as Type A (larger programs, above a size threshold) or Type B (all others). Type A programs with no prior year findings are generally considered low-risk; those with prior findings are high-risk. A percentage of high-risk and low-risk programs are selected as major programs for compliance testing. The auditor may deviate from this approach with appropriate justification.
Frequently asked