For the first time in a decade, the dollar trigger for a single audit has moved. The Office of Management and Budget (OMB) raised the single audit threshold from $750,000 to $1,000,000 as part of its 2024 revisions to the Uniform Guidance. The change took effect for fiscal years beginning on or after October 1, 2024, which means the earliest audits affected cover fiscal years ending on or after September 30, 2025.
Quick answer: Your organization still needs a single audit only if it expends $1 million or more in federal awards during the fiscal year. The test is based on federal awards expended, not awarded or received, and it aggregates across all federal programs. If your total federal expenditures for the year fall below $1 million, the federal single audit requirement does not apply, though other audit obligations from funders, lenders, or state law may still apply.
That timing matters. Calendar-year organizations are reaching their first affected year-end of December 31, 2025, and many finance teams are only now asking the obvious question: does our organization still need a single audit? This article answers that question, explains how to measure your exposure correctly, and walks through the other 2024 Uniform Guidance changes that arrive alongside the new threshold.
What Is a Single Audit, and What Changed in 2024?
A single audit is a rigorous, organization-wide examination required of any non-federal entity that expends federal awards above a set dollar amount in its fiscal year. It combines an audit of the entity’s financial statements with a separate audit of compliance over its major federal programs. The requirement traces back to the Single Audit Act and is governed today by Subpart F of the Uniform Guidance at 2 CFR Part 200.
The single audit exists so that a single, coordinated audit can satisfy the oversight needs of every federal agency that funds an organization, rather than forcing the entity to undergo a separate audit for each grant. Nonprofits, state and local governments, public housing authorities, colleges, healthcare providers, and Tribal organizations all fall within its scope when their federal spending is high enough.
The 2024 revision did three things that finance and grant teams need to internalize. First, it raised the single audit threshold to $1 million, codified at 2 CFR 200.501. Second, it lifted the floor used to identify larger federal programs, the Type A program threshold, from $750,000 to $1 million under 2 CFR 200.518. Third, it increased the de minimis indirect cost rate that organizations may claim without a negotiated rate, a change discussed further below.
OMB issued the revised guidance in April 2024 after a public comment period, describing the package as the most significant rewrite of the grants rules in a decade. The headline figure, the move to $1 million, is the one most organizations will feel first.
Does Your Organization Still Need a Single Audit?
The answer turns on one number that is widely misunderstood: federal awards expended, not federal awards received or awarded. An organization can hold several large multi-year grants on paper yet expend far less than $1 million in any single fiscal year. Conversely, a group can draw down a multi-year award quickly and cross the line in a year when no new funding arrives.
To assess your status, add up federal expenditures across every funding source for the fiscal year in question. That total includes direct federal grants, federal funds passed through a state agency or another pass-through entity, federal loan and loan guarantee programs, donated federal surplus property, and certain noncash assistance. If the total is $1 million or more, a single audit applies for that year. If it falls below $1 million, the single audit requirement does not apply, although other audit obligations may still exist.
Three practical points are worth keeping in mind. The threshold is measured per fiscal year, so a single audit can be required one year and not the next as spending rises and falls. The measurement uses expenditures recorded under your basis of accounting, so timing differences between cash and accrual reporting can change the result. And the $1 million test looks at the aggregate across all federal programs, not any single grant.
Organizations that drop below the new threshold should not assume their compliance work disappears. Many grant agreements, lenders, bond covenants, and state laws impose their own audit requirements that operate independently of the federal threshold. A nonprofit that no longer triggers a single audit may still owe a full financial statement audit to its board, its bank, or its state charity regulator.
There is also a narrower option to be aware of. Under 2 CFR 200.501, an entity that expends federal awards under only one federal program, and whose program does not require a financial statement audit, may elect a program-specific audit instead of a full single audit. That election is limited, so confirm eligibility before relying on it.
Beyond the Threshold: Other 2024 Uniform Guidance Changes That Matter
The threshold increase grabbed the attention, but two related changes will shape how organizations budget and how their major programs are selected for testing.
The de minimis indirect cost rate rose from 10 percent to up to 15 percent of modified total direct costs. Organizations without a federally negotiated indirect cost rate may now recover indirect costs at any rate they choose up to that 15 percent ceiling, under 2 CFR 200.414. For grant-reliant nonprofits and first-time recipients, that higher rate can free up meaningful unrestricted support, though it should be applied consistently and documented in the entity’s accounting policies.
The Type A program threshold also climbed to $1 million for organizations spending up to $34 million in federal awards. This figure drives the auditor’s risk-based selection of major programs, the programs that receive detailed compliance testing in a single audit. Raising the floor means some programs that previously counted as larger Type A programs may now be treated as smaller Type B programs, which can change which programs get tested and how the audit is scoped.
These three numbers move together for a reason. OMB designed the 2024 package to reduce administrative burden on smaller recipients while focusing audit effort on the programs that carry the most federal dollars and the most risk. Understanding how they interact helps a finance team predict the shape of its next engagement rather than react to it.
How the New Threshold Affects Nonprofits, Housing, and Healthcare Providers
The practical impact depends heavily on the kind of federal funding an organization receives, and several industries that rely on federal programs will experience the change differently.
Nonprofits that sit just above the old $750,000 line are the most direct beneficiaries. A community organization expending, say, $820,000 in federal awards would have required a single audit under the old rule but falls below the new threshold. That organization may be able to step down to a financial statement audit or another, less intensive level of assurance, depending on what its funders and board require. Pease Bell works with mission-driven organizations through its nonprofit accounting practice, where mapping federal expenditures correctly is the first step in answering the single audit question.
Affordable housing owners and public housing authorities should be especially careful, because HUD-assisted entities often face program-level audit and submission requirements that exist apart from the single audit threshold. Stepping below $1 million in federal expenditures does not automatically end a HUD reporting obligation, and some HUD systems and program rules continue to reference their own audit triggers. Owners navigating these overlapping rules can review how the firm approaches HUD audit and compliance work before assuming the threshold change relieves them.
Healthcare providers, including skilled nursing facilities and behavioral health organizations, frequently receive federal funds through Medicaid programs, federal grants, and pandemic-era relief that may still be working through their books. Because the single audit count is driven by expenditures, providers that received large awards in earlier years can cross the threshold in the year those funds are actually spent. Operators in the skilled nursing and long-term care space and in behavioral health should track federal draws closely, since reimbursement timing and grant spend-down can push them above or below $1 million from one year to the next.
Across all of these sectors, the common error is assuming the new threshold provides relief without checking the underlying numbers. The right approach is to recalculate federal expenditures under the current year’s facts, then confirm what other audit obligations still apply.
What to Do Now: Preparing for or Stepping Away From a Single Audit
Start by building a clean schedule of expenditures of federal awards for the fiscal year, the document auditors know as the SEFA. Even organizations that expect to fall below $1 million benefit from preparing this schedule, because it is the only reliable way to confirm where you actually stand. The schedule should capture each federal program, its assistance listing number, amounts passed through to subrecipients, and total expenditures for the year.
If your federal expenditures land at or above $1 million, plan the engagement early. Single audits carry firm deadlines: the reporting package and data collection form must be submitted to the Federal Audit Clearinghouse by the earlier of 30 calendar days after you receive the auditor’s report or nine months after the end of the audit period, under 2 CFR 200.512. Late submissions are visible to every federal agency that funds you and can affect future awards.
If your expenditures fall below $1 million, document the determination and then confirm your remaining obligations. Review grant agreements, loan covenants, bylaws, and state filing requirements, because any one of them can independently require an audit. Communicate the change to your board and funders early so that no one expects a single audit report that you are no longer required to produce.
The 2024 threshold increase is good news for many smaller recipients, but it rewards organizations that measure carefully rather than guess. A short conversation about your federal spending, your funding mix, and your reporting obligations can prevent both an unnecessary audit and a missed requirement. Pease Bell’s audit and assurance team helps organizations make that determination and plan the right level of assurance for the year ahead.
Single Audit Threshold FAQ
What is the new single audit threshold?
The single audit threshold is $1 million in federal awards expended in a fiscal year, raised from $750,000 by OMB’s 2024 revisions to the Uniform Guidance and codified at 2 CFR 200.501. The change took effect for fiscal years beginning on or after October 1, 2024.
Does my organization still need a single audit under the new $1 million threshold?
You need a single audit only if your organization expends $1 million or more in federal awards during the fiscal year. The test counts federal awards expended across all federal programs, not awards received or awarded. If your total federal expenditures fall below $1 million, the federal single audit requirement does not apply for that year.
What counts toward the $1 million federal expenditure total?
Add up federal expenditures across every funding source for the year, including direct federal grants, federal funds passed through a state agency or other pass-through entity, federal loan and loan guarantee programs, donated federal surplus property, and certain noncash assistance. The threshold is measured per fiscal year using your basis of accounting, so the result can change from one year to the next.
If we fall below $1 million, are we free from all audit requirements?
No. Dropping below the single audit threshold ends the federal requirement, but grant agreements, lenders, bond covenants, and state laws can independently require an audit. A nonprofit that no longer triggers a single audit may still owe a full financial statement audit to its board, its bank, or its state charity regulator.
The single audit rules will keep evolving, and the dollar figures that define them are now higher than they have been in years. Knowing exactly where your organization sits against the $1 million line, and why, is the foundation for everything that follows.
