Single Audits & Uniform Guidance compliance for nonprofits.
For nonprofits expending $1 million or more in federal awards, the Single Audit is where nonprofit-exclusive depth matters most.
18+
years of nonprofit-exclusive practice
500+
nonprofit clients served
60+
nonprofit professionals
95%+
client retention rate
The full Single Audit lifecycle.
A Single Audit expands a standard financial statement audit with federal award compliance testing and a Schedule of Expenditures of Federal Awards. We conduct the audit from planning through final reporting.
What triggers a Single Audit requirement?
Under Uniform Guidance, an organization that expends $1 million or more in federal awards during the fiscal year under audit is generally required to have a Single Audit, unless it qualifies for a program-specific audit.
The threshold is based on total applicable federal awards expended during that fiscal year, across every grant combined. For example, $600,000 of federal expenditures under one award and $500,000 under another would exceed the $1 million threshold.
Federal awards passed through a state or local government, another nonprofit organization, or another pass-through entity generally count when the organization receives and expends those funds as a subrecipient. For example, an organization expending $500,000 from a direct federal award and $600,000 of federal funds passed through a state agency would exceed the $1 million threshold. Payments received as a contractor for providing goods or services under a federal award are treated differently and do not count toward the threshold.
Because the requirement is based on federal awards expended, rather than simply cash received, organizations should identify both direct and pass-through federal awards and monitor applicable expenditures across all awards throughout the fiscal year. Uniform Guidance includes specific rules for determining when different types of federal awards are considered expended.
What does a Single Audit involve beyond a standard audit?
A Single Audit combines the financial statement audit with additional audit procedures over federal awards, including major program determination, internal control and compliance testing, and audit procedures over the Schedule of Expenditures of Federal Awards (SEFA). The financial statement and federal award components are planned and performed together as one coordinated engagement.
SEFA audit
procedures.
The Schedule of Expenditures of Federal Awards (SEFA) presents the organization’s federal awards expended during the audit period, including the federal agency, federal program, applicable Assistance Listing number (formerly CFDA number), and federal expenditures, along with other information required under Uniform Guidance. Our Single Audit procedures include audit work over the SEFA and consideration of its presentation under applicable Uniform Guidance requirements.
Major program
determination.
Uniform Guidance requires the auditor to follow a prescribed risk-based approach to determine which federal programs will be audited as major programs. The process considers the amount of federal expenditures, current and prior audit experience, federal and pass-through entity oversight, and program-specific risk. Programs identified as major are then subject to detailed testing of internal control over compliance and compliance requirements.
Compliance
testing.
Auditors test compliance with the specific requirements attached to each major program: allowable costs, eligibility, procurement standards, matching requirements, and reporting obligations, among others, as identified in the OMB Compliance Supplement. The depth of testing scales with the number and complexity of major programs identified.
Federal Audit Clearinghouse filing.
Completed Single Audits are submitted to the Federal Audit Clearinghouse, the federal government’s central repository for Single Audit reporting packages. The submission includes the Data Collection Form alongside the audit reporting package. Filing deadlines are firm, and late submissions create their own compliance exposure.
What should be in place before fieldwork?
Preparation on the organization’s side is what separates a smooth Single Audit from a difficult one. Organizations that arrive at fieldwork with clean federal award tracking, documented cost allocation methodology, and controls designed for Uniform Guidance requirements move through the engagement faster and with fewer findings.
Cost allocation methodology.
Federal awards require documented methodology for allocating costs between programs and between direct and indirect cost pools. A cost allocation plan aligned with Uniform Guidance allowability requirements gives the methodology a defensible basis before the auditor tests it.
Internal controls over federal awards.
Uniform Guidance requires organizations to maintain internal controls specifically over federal award activity. Controls that are documented and operating before fieldwork give the auditor a clear basis for testing and reduce the risk of findings.
Federal award records.
A complete inventory of every federal award stream the organization has received, including pass-through funding, reconciled to the SEFA before testing begins. Accurate records here reduce the surprises that most commonly extend Single Audit timelines.
How does a Single Audit engagement proceed?
01
Planning & federal award review.
We obtain an understanding of the organization’s federal award activity and the SEFA prepared by management, including direct and pass-through
federal awards, as part of planning the Single Audit.
02
Major program determination.
We apply Uniform Guidance’s prescribed risk-based approach to determine which federal programs will be audited as major programs.
03
Internal control & compliance testing.
For each major program, we obtain an understanding of internal control over compliance and perform the required testing of internal controls and applicable compliance requirements.
04
SEFA audit procedures.
We perform audit procedures over management’s SEFA and determine whether it is fairly stated, in all material respects, in relation to the financial statements as a whole.
05
Audit findings & reporting.
We evaluate the results of our testing and issue the required Single Audit reports, including reportable findings and questioned costs, when applicable. Findings are communicated to
management and those charged with governance as appropriate.
06
Federal Audit Clearinghouse submission.
Uniform Guidance requires the auditee to prepare and submit the Data Collection Form and reporting package to the Federal Audit Clearinghouse. We complete the
auditor-designated portions of the Data Collection Form and provide the required audit information for management’s submission.
How does a standard audit compare to a Single Audit?
|
Element |
Standard financial statement audit |
Single audit UNDER Uniform Guidance |
|---|---|---|
|
Scope |
Financial statements as a whole |
Financial statements plus internal control over compliance and compliance testing for major federal programs |
|
Key deliverable |
Auditor’s opinion on financial statements |
Auditor’s opinion on the financial statements, plus reporting on the SEFA, compliance for each major program, internal control over compliance, and audit findings, as applicable |
|
Governing standards |
Generally accepted auditing standards (GAAS) |
GAAS plus Government Auditing Standards (Yellow Book) and Uniform Guidance (2 CFR Part 200) |
|
Additional testing |
Risk-based audit procedures over the financial statements |
Additional internal control and compliance testing for major federal programs based on Uniform Guidance and the applicable Compliance Supplement |
|
Filing requirement |
None as part of a standard financial statement audit |
Data Collection Form and reporting package submission to the Federal Audit Clearinghouse |
|
Typical timeline |
Baseline |
Extended, scaling with the number of major programs identified |
What happens if a Single Audit identifies findings?
A Single Audit finding identifies a specific issue for the organization to address. Findings can relate to internal control over compliance, compliance with federal award requirements, or questioned costs, depending on the nature and significance of the issue identified. Findings that meet Uniform Guidance reporting criteria are included in the audit reporting package.
Findings vary in significance. An isolated finding may simply require management to document and implement corrective action, while more significant or recurring findings may require additional follow-up. Uniform Guidance requires the auditee to prepare a corrective action plan for current-year findings and track the status of prior-year findings. When questioned costs are involved, the applicable federal agency or pass-through entity determines the appropriate resolution. In some circumstances, costs may be disallowed and need to be repaid or covered with nonfederal funds.
Strong federal award management matters year-round. Maintaining accurate federal award records, effective internal controls over compliance, and organized supporting documentation helps organizations meet their Uniform Guidance responsibilities and be prepared for Single Audits and other federal or pass-through entity oversight.
Single Audits as core practice.
Single Audits are where the difference between a nonprofit-exclusive firm and a generalist can be especially significant. Major program determination under Uniform Guidance requires risk-based judgments informed by experience with federal programs and nonprofit organizations. Cost allocation testing requires familiarity with how nonprofit indirect costs are allocated and supported. Pass-through funding requires an understanding of the documentation and compliance requirements that apply to federal awards received through other entities.
Han Group conducts Single Audits as a core part of our audit practice. Eighteen years of nonprofit-exclusive audit experience means our teams understand the federal funding structures, compliance requirements, and program complexities that shape these engagements. That experience helps us identify the right questions early, focus the audit appropriately, and keep the engagement moving efficiently.
Related services
Financial audits.
Independent financial statement audits tailored to your organization’s structure, reporting requirements, and stakeholder needs.
Internal controls.
Assessment and design of the controls that protect your books, reduce fraud risk, and hold up under audit testing
Accounting & reporting.
Monthly close, donor-restriction tracking, and board-ready financial reporting built into the operating rhythm of your organization.
Tax compliance.
Federal and state filing obligations managed on a continuous calendar across every jurisdiction where you operate.
Ready to discuss your organization’s federal compliance needs?
Whether your organization is approaching the Single Audit threshold for the first time or looking to reduce the friction in a recurring engagement, a partner is ready to scope the work you actually need.