A Single Audit is required for organizations that spend $1,000,000 or more in federal funds during a fiscal year. (This threshold was previously $750,000.) The increase applies to fiscal years beginning on or after October 1, 2024—meaning it impacts audits for fiscal years ending September 30, 2025 or later.
Even if your organization currently spends less than $1 million, it’s important to understand what a Single Audit involves so you can stay compliant and prepare as your funding changes.
1. Understand the Compliance Supplement
The Office of Management and Budget (OMB) releases a Compliance Supplement each year. This document outlines the specific audit objectives and compliance requirements for federal programs. Familiarity with it helps your team stay ahead of changes and avoid unexpected audit findings.
2. Prepare and Maintain a Strong SEFA
The Schedule of Expenditures of Federal Awards (SEFA) is a critical piece of your audit package. It provides a detailed accounting of all federal funds spent by your organization, categorized by grantor and award. An accurate SEFA helps auditors identify major programs and scope the audit properly.
Reference: OMB Uniform Guidance
3. Maintain Accurate Records
Organized documentation of grant expenditures, internal controls, and allowable costs is essential to a smooth audit process. Poor recordkeeping is one of the most common causes of audit findings.
Reference: IRS – Recordkeeping for Small Business
4. Strengthen Internal Controls
A robust internal control system helps prevent mismanagement of funds and ensures compliance with grant terms. From segregation of duties to approval processes, a strong control environment builds trust with funders and reduces audit risk.
5. Engage Your Auditors Early
Open communication with your audit team early in the year allows you to align on expectations, timelines, and potential challenges. Proactive collaboration often leads to fewer surprises and a more efficient audit.
6. Prepare Corrective Action Plans
If findings occur, a thoughtful corrective action plan (CAP) demonstrates accountability and helps protect future funding. Addressing issues quickly and thoroughly can preserve your reputation and relationships with granting agencies.
Reference: OMB Uniform Guidance
Why This Matters Now
While the increased threshold offers relief to smaller organizations, expectations for transparency and proper fund management haven’t changed. Even if you’re no longer required to undergo a Single Audit, you’re still responsible for following all federal grant requirements—and your funders still expect clear, accurate reporting.
Supporting Compliance, Building Confidence
ClearPoint CPAs specializes in Single Audits for governments and nonprofits of all sizes. Whether you’re preparing for your first audit or adjusting to the new threshold, we’re here to support you with:
- SEFA preparation and federal grant tracking
- Internal control evaluation and improvement
- Audit coordination and timeline planning
- Post-audit corrective action support
We understand the importance of accuracy, accountability, and trust—especially when public funding is at stake. Let’s work together to strengthen your compliance today and build a foundation for tomorrow.
Have a question or ready to connect with our team?
Contact us or stop by one of our regional offices. We’re here to support your mission with clarity and care.
