Single Audit Requirements for Nonprofits ($1M Threshold)

Important note: This article is general educational information, not legal, tax, or accounting advice. Confirm any requirement with your federal awarding agency, your pass-through entity, or a qualified auditor before you rely on it.

Maybe a new federal grant just came through, or a state agency started passing federal money to your program, and someone on the board asked whether this means a “Single Audit.” Maybe a funder’s agreement mentions 2 CFR 200 Subpart F and you are trying to work out whether that sentence is about you, and what the single audit requirements actually ask of your organization.

The question is fair, and the answers you find online do not always agree. Part of that is timing: the federal threshold changed recently, and plenty of pages still show the old number. The other part is a misunderstanding about what the threshold measures.

It does not measure how big your grants are. It measures what you spend in one fiscal year, in one particular role. Once that is clear, most of the rest is planning.

On this page

• What a Single Audit is, and why it is called single
• The single audit threshold: $1,000,000, and which fiscal year it applies to
• Expended, not awarded: how federal awards are counted
• Subrecipient or contractor: money that counts and money that does not
• Below the threshold: what still applies
• Single audit requirements: what your organization prepares
• Choosing the auditor
• When the Single Audit is due and where it goes
• What to settle before your fiscal year closes
• Getting help with audit preparation
• Sources reviewed
• Frequently asked questions
• Related NPO Resources guides

What a Single Audit is, and why it is called single

A Single Audit is the annual audit a nonprofit must have when it expends $1,000,000 or more in federal awards in a fiscal year. The single audit requirements are set out in 2 CFR Part 200, Subpart F, the federal rules that implement the Single Audit Act. The audit is conducted under Government Auditing Standards, and it covers more than an ordinary financial statement audit. Under section 200.514, the auditor gives an opinion on your financial statements, reports on whether your schedule of federal spending is fairly stated in relation to them, and tests internal control and compliance for the programs the rules classify as major programs.

The word “single” is the useful part. Think of a home inspection that every lender on a loan agrees to read, instead of each lender sending its own inspector. Section 200.503 says an audit under these rules is done “in lieu of any financial audit of Federal awards” that another federal rule would require, and that a federal agency or pass-through entity must review the clearinghouse for your existing audit before starting another one. One audit, read by every federal funder.

It is also an annual obligation. Section 200.504 requires the audit every year you cross the threshold. The only biennial option for nonprofits is reserved for organizations that had biennial audits for all biennial periods ending between July 1, 1992 and January 1, 1995.

The single audit threshold: $1,000,000, and which fiscal year it applies to

Section 200.501(a) sets the rule: a non-Federal entity that “expends $1,000,000 or more during the non-Federal entity’s fiscal year in Federal awards must have a single or program-specific audit conducted for that year.” A program-specific audit is an option only when all your federal spending is under a single program and that program does not require a financial statement audit.

The number used to be $750,000. OMB raised it in its April 2024 revision of the Uniform Guidance, which took effect October 1, 2024. The Federal Audit Clearinghouse states how that plays out by fiscal year in its submission guide: $750,000 or more for fiscal years starting before October 1, 2024, and $1,000,000 or more for fiscal years starting on or after that date. The start date of the fiscal year decides it, not the date of the audit.

Expended, not awarded: how federal awards are counted

A common misreading starts here. A three-year federal grant worth $1.5 million can feel like a Single Audit on day one. It may not be. Section 200.502(a) says when an award is expended “must be based on when the activity related to the Federal award occurs.”

The threshold works like a water meter, not a tank gauge. It reads what flowed through your program this fiscal year, not how much the tank holds. The rule lists the kinds of activity that count, including:

• expenses you incur under grants, cooperative agreements and cost-reimbursement contracts;
• federal money you pass on to your own subrecipients;
• the receipt of federal property, and the receipt or use of program income;
• the use of loan proceeds under federal loan programs, which are valued under their own rules in section 200.502(b).

The same section also excludes some payments. Medicare payments for patient care are not counted, and Medicaid payments to a subrecipient for patient care generally are not either, unless the state requires them to be treated as federal awards expended.

Take a hypothetical organization with a $1.5 million federal grant spread evenly over three years. It spends about $500,000 of that grant a year, so the grant alone stays under the threshold. Now add a $600,000 subaward from a state agency that passes through federal funds, spent in the same year. The year’s federal expenditures reach about $1.1 million, and that fiscal year needs a Single Audit, though neither award looked large enough on its own.

The practical habit follows from this: track federal spending by fiscal year, by award, from the start of the year, not just award totals. The same numbers become your schedule of federal expenditures if you cross the line.

Subrecipient or contractor: money that counts and money that does not

Federal money often reaches a nonprofit second-hand, through a state agency, a county, or a larger nonprofit. How that money counts depends on the role you play. Section 200.501(g) is direct: awards expended “as a recipient or a subrecipient are subject to audit,” while payments “for goods or services provided as a contractor under a Federal award” are not.

One organization can be all three at once: a recipient on one award, a subrecipient on another, and a contractor on a third. Picture an event. The host decides who is invited and is judged on whether the event achieved its purpose. The caterer is paid to deliver food. A subrecipient is the host of part of a federal program; a contractor is the caterer.

You do not make this call alone. Under section 200.331, the pass-through entity decides case by case, and “the substance of the relationship is more important than the form of the agreement.” Not every characteristic has to be present, and no single factor decides it. Read the agreement for the words “subaward” and “subrecipient,” and look for an Assistance Listing number. If it is unclear, ask the pass-through entity in writing which it considers you to be.

Below the threshold: what still applies

Under section 200.501(e), an organization that expends less than $1,000,000 is exempt from federal audit requirements for that year, except that section 200.503 still lets federal agencies arrange additional audits. The same paragraph adds that “in all instances” your records must be available for review or audit by the federal agency, the pass-through entity, and the Government Accountability Office. Being under the line means no Single Audit, not no scrutiny.

Other rules can still require an audit of your financial statements:

• State charity laws. Several states tie audits to revenue or contributions. Our guides cover California, Illinois, New York and Pennsylvania.
• Funders and lenders. A grant agreement, a pass-through entity’s terms, or a loan covenant can require an audit at any size.
• Your own bylaws or board policy.

Those audits are not Single Audits. They do not go to the Federal Audit Clearinghouse unless the federal rules require it.

Single audit requirements: what your organization prepares

The auditor examines; your organization prepares. Section 200.508 lists what falls on the auditee:

1. Arrange the audit and make sure it is performed and submitted on time.
2. Prepare the financial statements for the fiscal year being audited.
3. Prepare the schedule of expenditures of federal awards. Under section 200.510(b) it covers the same period as the financial statements, totals the awards expended, and lists each program by federal agency with its Assistance Listing number.
4. Give the auditor access to staff, accounts, books, records and supporting documents.
5. Follow up on findings. Under section 200.511 you prepare a summary schedule of prior audit findings and a corrective action plan for the current ones.

Most of this is easier if it is built during the year. A schedule assembled from twelve months of tidy award-by-award records is far quicker to finish than one rebuilt from bank statements after year end.

Choosing the auditor

Hiring the auditor is itself covered by the rules. Section 200.509(a) says you follow the federal procurement standards when you buy audit services, state the objectives and scope clearly when you ask for proposals, and “must request a copy of the audit organization’s peer review report.” The factors it names for comparing proposals are responsiveness, relevant experience, qualified staff, peer and external quality review results, and price.

Two practical points follow. First, ask each firm how many Single Audits it performed recently and for what kinds of programs. Second, check one restriction: the same section bars an auditor who prepared your indirect cost proposal or cost allocation plan from performing the audit when indirect costs recovered in the prior year exceeded $1 million.

If you are starting a search, our list of nonprofit audit firms shows CPA firms that work only or mostly with nonprofits. Confirm that any firm you hire can practice in your state and performs Single Audits.

When the Single Audit is due and where it goes

Section 200.512(a) sets the clock: the audit, the data collection form and the reporting package are due “within 30 calendar days after the auditee receives the auditor’s report(s) or nine months after the end of the audit period (whichever is earlier).” For a December 31 year end, the outside date is September 30. If the auditor delivers the report in June, the 30 days run from the day you receive it.

Everything goes to the Federal Audit Clearinghouse, which the rules call the repository of record. Federal agencies and pass-through entities get your audit from there rather than from you. Under the same section 200.512, if a due date falls on a weekend or federal holiday, it moves to the next business day. Your cognizant agency for audit, or your oversight agency for audit if there is no cognizant agency, may extend the nine-month deadline when it would place an undue burden on you.

What to settle before your fiscal year closes

Start with these, and add to them as the organization grows. A short list you actually run each year beats a perfect one you avoid.

• Note the first day of your fiscal year and confirm which threshold applies to it.
• List every agreement that involves federal money, with its Assistance Listing number and whether you are the recipient, a subrecipient or a contractor.
• Track federal expenditures by award each month, so you see the threshold coming instead of finding it after year end.
• Book the auditor early if you expect to cross the line, and ask for the firm’s peer review report.
• Put the submission date on the calendar next to your Form 990 date — our nonprofit compliance calendar checklist has room for both.

Getting help with audit preparation

To find an independent auditor, see our list of nonprofit audit firms. For federal and state filing pages in one place, our filing requirements by state page lists official sources with the date each was last checked.

Sources reviewed

Every federal rule and figure above was read on the pages below on 3 October 2026. State rules are covered in the linked state guides. Federal rules and thresholds change; check the source before relying on any figure here.

• 2 CFR Part 200, Subpart F — Audit Requirements (eCFR) — the full subpart.
• 2 CFR 200.501 — Audit requirements — the threshold, program-specific audits, the exemption below the threshold, subrecipients and contractors.
• 2 CFR 200.502 — Basis for determining Federal awards expended — when an award counts as expended.
• 2 CFR 200.503 — Relation to other audit requirements — one audit in lieu of others.
• 2 CFR 200.504 — Frequency of audits — annual audits and the biennial exception.
• 2 CFR 200.508 — Auditee responsibilities — what the organization prepares.
• 2 CFR 200.509 — Auditor selection — procurement, peer review report, independence.
• 2 CFR 200.510 — Financial statements — the schedule of expenditures of federal awards.
• 2 CFR 200.511 — Audit findings follow-up — summary schedule and corrective action plan.
• 2 CFR 200.512 — Report submission — due date, certification, public availability.
• 2 CFR 200.514 — Standards and scope of audit — what the audit covers.
• 2 CFR 200.331 — Subrecipient and contractor determinations — who decides and how.
• Federal Register, 89 FR 30046 (April 22, 2024) — Guidance for Federal Financial Assistance — the threshold increase and its October 1, 2024 effective date.
• Federal Audit Clearinghouse — Audit submission guide — which threshold applies by fiscal year start date.

Frequently asked questions

Related NPO Resources guides

• Form 990 filing requirements — the federal return every year, Single Audit or not.
• Nonprofit compliance calendar checklist — putting audit, 990 and state dates on one calendar.
• Charitable solicitation registration — the state filings where audit requirements often appear.
• Form RRF-1: California charity registration renewal — California’s audit rule for registered charities.
• Nonprofit audit firms — CPA firms that work only or mostly with nonprofits.