What Is a Single Audit?

If your nonprofit organization expends $1,000,000 or more in federal awards during a fiscal year, you are required by law to undergo a Single Audit (also known as an A-133 audit or federal grant audit) — also known as an A-133 audit, though that terminology was updated when OMB Circular A-133 was superseded by 2 CFR Part 200 (Uniform Guidance) in 2015. Understanding this requirement is essential for any nonprofit that receives federal funding, whether directly from a federal agency or as a pass-through recipient from a state or local government.

The $1,000,000 Threshold: What Counts?

The Single Audit threshold applies to the total federal awards expended during the fiscal year — not received, not drawn down, but expended. This is an important distinction. Federal awards include grants, cooperative agreements, contracts under the Federal Acquisition Regulations (FAR), loans, loan guarantees, property, food commodities, direct appropriations, and other financial assistance.

If your organization receives pass-through federal funds from a state agency, those still count toward the $1,000,000 threshold. You must track federal expenditures carefully across all programs, including indirect federal awards where the original source is a federal agency even if your grantor is a state or local government.

What Does a Single Audit Include?

A Single Audit is not just a financial statement audit. It combines two distinct elements:

  • Financial Statement Audit: An independent examination of the organization's financial statements under GAAS and GAAP, resulting in an auditor's report on whether the financial statements are fairly presented.
  • Federal Program Compliance: Testing of compliance with the requirements of each major federal program, along with an assessment of internal controls over compliance. The auditor issues separate reports on internal control over financial reporting and on compliance with federal program requirements.

Additionally, Single Audits require the preparation of a Schedule of Expenditures of Federal Awards (SEFA) — a detailed schedule listing all federal programs and the amount expended under each during the fiscal year.

What Are 'Major Programs' and Why Do They Matter?

Not every federal program your organization administers will receive detailed compliance testing in the Single Audit. Auditors use a risk-based approach defined in 2 CFR Part 200 to identify major programs — the programs that will receive compliance testing during the audit.

The identification of major programs considers the size of expenditures in each program, risk factors such as prior audit findings, and the nature of the program's compliance requirements. Larger programs with complex compliance requirements or prior findings are more likely to be selected as major programs.

Key point: If your organization has had prior audit findings in a specific program, that program is more likely to be classified as a major program and receive compliance testing again in future years.

What Happens After the Audit?

Once the Single Audit is complete, the audit package — including the financial statements, SEFA, auditor's reports, and any findings and corrective action plans — must be submitted to the Federal Audit Clearinghouse (FAC). The submission deadline is the earlier of 30 days after the auditor issues their reports, or 9 months after the end of the fiscal year being audited.

Federal agencies and pass-through entities monitor FAC submissions. Findings reported in the audit package may trigger follow-up from your granting agency and require formal corrective action. Unresolved prior findings can affect future grant awards and agency relationships.

Do We Need a Single Audit Even If We Have No Findings?

Yes. The Single Audit requirement is triggered by the $1,000,000 threshold — not by the existence of compliance problems. Even an organization with exemplary financial management and clean internal controls must undergo a Single Audit if federal expenditures meet the threshold.

That said, organizations with strong internal controls, clean financial records, and well-documented compliance procedures typically experience smoother, faster, and less expensive Single Audit engagements. Investing in audit readiness throughout the year pays dividends at audit time.