Key Facts
- Threshold: $750,000 in federal expenditures in a single fiscal year triggers the Single Audit requirement (2 CFR 200.501). This counts all federal awards — grants, contracts, cooperative agreements, and pass-through awards.
- Who performs it: an independent CPA firm (not internal audit). The auditor must be licensed in the state and meet Government Auditing Standards (Yellow Book) requirements.
- Due date: submitted to the Federal Audit Clearinghouse within 30 days of the auditor's report issuance, or 9 months after the fiscal year end — whichever comes first.
- Core documents: Schedule of Expenditures of Federal Awards (SEFA), auditor's report on internal controls, auditor's report on compliance with major programs.
- Findings: classified as material weakness, significant deficiency (internal controls) or material noncompliance, qualified/adverse opinion (compliance). Each requires a written corrective action plan.
Summary
The Single Audit — formally the audit under 2 CFR Part 200 Subpart F — is a comprehensive annual audit required of any non-federal entity that expends $750,000 or more in federal awards during its fiscal year. It is not a program audit of any single grant; it is an organization-wide assessment of internal controls over federal programs and compliance with the terms of major federal awards. The audit is performed by an independent CPA, submitted to the Federal Audit Clearinghouse (FAC), and available to any awarding agency. Findings from Single Audits can trigger sanctions, repayment demands, and heightened oversight conditions on future awards.
Triggering the Requirement: What Counts Toward $750,000
The $750,000 threshold is measured in federal expenditures — amounts actually spent or obligated during the fiscal year — not in federal awards received. An organization that receives a $2 million multi-year award and spends $300,000 in its first fiscal year has not triggered the threshold in year one. An organization that receives three separate awards totaling $900,000 in expenditures across multiple agencies in a fiscal year has triggered the requirement, even if no single award exceeds $750,000.
Pass-through awards count. If your organization receives federal funds through a state agency or another nonprofit acting as a pass-through entity, those expenditures count toward your $750,000 threshold. The pass-through entity is required to communicate the federal award information to you (CFDA/ALN number, award amount, applicable regulations), and your independent auditor must include pass-through federal expenditures in the SEFA.
Subrecipients versus contractors: organizations that receive federal funds as subrecipients have all the compliance obligations of direct grantees, including Single Audit requirements if their total federal expenditures exceed $750,000. Organizations that receive federal funding as contractors (procurement) are not subject to Single Audit requirements — but the determination of whether a recipient is a subrecipient or a contractor is made based on the characteristics of the relationship, not the label used in the agreement.
The SEFA: What It Is and Why It's Critical
The Schedule of Expenditures of Federal Awards (SEFA) is a complete listing of all federal programs from which the auditee received or expended federal funds during the audit period. It identifies each program by Assistance Listing Number (ALN, formerly CFDA number), the name of the awarding agency, the pass-through entity if applicable, the total federal expenditures during the fiscal year, and any clusters of programs.
The SEFA drives the entire audit. Your auditor uses it to determine which programs are "major programs" — those subject to detailed compliance testing. A program is a major program if it exceeds a dollar threshold calculated as a percentage of total federal expenditures (the type A/type B threshold calculation under 2 CFR 200.518). Programs identified as high-risk through prior audit findings or other risk factors may also be classified as major. The accuracy of the SEFA directly determines which programs get audited.
Common SEFA errors: omitting pass-through federal expenditures; using incorrect ALN numbers; including non-federal funds in federal expenditure totals; or failing to identify related federal award clusters correctly. An incorrect SEFA can lead to the wrong programs being classified as major — either over-auditing low-risk programs or under-auditing high-risk ones.
GrantMetric Analysis
- The most consequential audit findings are not about money — they're about internal controls. A material weakness in internal controls over federal programs can result in mandatory corrective actions, increased oversight from awarding agencies, and conditions attached to future awards. The dollar finding (a disallowed cost requiring repayment) is often less damaging to an organization's federal funding relationships than a material weakness finding, which signals that the organization may not have adequate systems to manage federal funds at all. Organizations that invest in building strong internal controls — segregation of duties in financial processes, documented time and effort reporting for personnel, written procurement procedures — reduce both the likelihood of findings and the severity of auditor assessment.
- The corrective action plan (CAP) is read by awarding agencies — write it as a commitment, not a defense. When auditors issue findings, the auditee prepares a corrective action plan describing how each finding will be addressed. The CAP is included in the final audit report submitted to the Federal Audit Clearinghouse, where it is publicly accessible and searchable by federal agencies reviewing your organization for future awards. A CAP that is defensive ("the auditor misunderstood our procedures") looks worse to a program officer than a CAP that is direct and specific ("we will implement dual-signature authorization for all reimbursement requests over $5,000 by October 1, 2026, and document procedures in writing by September 1, 2026"). The CAP should read as evidence that leadership understands the finding and has a credible plan to prevent recurrence.
What Compliance Testing Covers for Major Programs
For each program identified as major, the auditor tests compliance with 12 types of compliance requirements identified in the OMB Compliance Supplement — an annual publication that specifies what the auditor must test for each federal program. The 12 types include: activities allowed or unallowed (were costs incurred for purposes permitted by the program?), allowable costs and cost principles, cash management, eligibility (did the program serve the populations required by statute?), equipment and real property, matching/level of effort, period of performance, procurement, reporting, subrecipient monitoring, and special tests and provisions specific to the program.
Not all 12 types apply to every program. The Compliance Supplement identifies which types are applicable and what specific procedures the auditor should perform. For many programs, eligibility and activities allowed/unallowed are the highest-risk areas. For programs with significant procurement activity, the procurement compliance requirement is frequently tested. For pass-through entities, subrecipient monitoring is almost always a tested compliance type.
Submitting to the Federal Audit Clearinghouse
Single Audit reports are submitted electronically to the Federal Audit Clearinghouse (FAC) at fac.gov. The submission must include: the financial statements and independent auditor's report; the SEFA and related auditor's report; the auditor's report on internal controls over financial reporting and over compliance; the Schedule of Findings and Questioned Costs; and the auditee's corrective action plan for any findings. The submission deadline is the earlier of: 30 calendar days after the auditor's report issuance date, or 9 months after the end of the fiscal year being audited. Late submissions are tracked in the FAC and visible to federal program offices.
Single Audit Preparation Checklist
- Verify total federal expenditures at fiscal year end — include all grants, contracts, cooperative agreements, and pass-through awards
- Prepare the SEFA with correct ALN numbers, pass-through entity names, and accurate expenditure totals for each program
- Engage an independent CPA firm with Government Auditing Standards experience before fiscal year end — late engagement delays the audit timeline
- Prepare time and effort documentation, procurement files, eligibility records, and financial transaction support for major programs
- If prior audit findings exist, prepare evidence that corrective actions were implemented
- Submit completed audit package to the Federal Audit Clearinghouse at fac.gov within the 30-day/9-month deadline