Single Audit

What is a single audit?

A single audit is an expanded annual audit required of organizations that spend $750,000 or more in federal funds in a fiscal year. It covers both the financial statements and compliance with the rules attached to each federal program. The threshold is based on money spent, not money received or awarded, so an organization can cross it in a year when no new grants arrived. Falling under it changes the scope, cost, and timeline of your audit substantially.

What the auditor examines beyond the numbers

The compliance portion tests whether you followed the requirements of your major programs: allowable costs, eligibility determinations, procurement procedures, subrecipient monitoring, reporting deadlines, and matching requirements. The auditor selects major programs using a risk-based approach, so the programs tested change year to year. Findings are published in a public reporting package, and repeat findings in the same area flag your organization as higher risk for the following cycle.

Preparing before the threshold arrives

Track federal expenditures across all programs during the year, not at year end, because crossing $750,000 is often discovered too late to prepare. Keep a schedule of expenditures of federal awards current as you go. Make sure time allocation records, procurement documentation, and subrecipient monitoring files exist contemporaneously, since reconstructing them during fieldwork rarely satisfies an auditor. Budget for the cost and the extra weeks, and tell your board before the engagement letter arrives.