A housing authority audit now runs under a substantially revised rulebook. The 2024 revision of the Uniform Guidance (2 CFR Part 200) raised the single audit threshold and rewrote how Type A programs are identified, and those changes first apply to fiscal years beginning on or after October 1, 2024. For most public housing authorities (PHAs), that means fiscal year 2025 is the first audit cycle measured against the new $1 million benchmarks. The shift affects which authorities need a single audit at all, and, for those that do, which federal programs auditors must test as major.
Quick answer: Under the 2024 Uniform Guidance, the Type A program threshold for a housing authority that expends $34 million or less in total federal awards is $1 million. Any federal program with expenditures at or above $1 million is a Type A program and a candidate for major-program testing; programs below $1 million are Type B. This is double the prior $500,000 floor, and it applies to fiscal years beginning on or after October 1, 2024, which is FY2025 for most PHAs.
What Changed in the 2024 Uniform Guidance?
The Office of Management and Budget released the final 2024 revision to 2 CFR Part 200 in April 2024. Two changes matter most for housing authorities. First, the single audit threshold rose from $750,000 to $1,000,000 in annual federal expenditures, set in 2 CFR 200.501. Second, the Type A program threshold in 2 CFR 200.518 was rebuilt, with the entry-level threshold doubling from $500,000 to $1,000,000.
Both changes take effect for non-federal entity fiscal years beginning on or after October 1, 2024, as confirmed by the EPA summary of the 2024 revision. A PHA with a December 31 year end first applies the rules to its calendar-year 2025 audit. A PHA with a fiscal year starting October 1 applies them to the year beginning October 1, 2024. Authorities on a June 30 fiscal year do not reach the new rules until the year beginning July 1, 2025.
The threshold increase carries a practical consequence: some smaller housing authorities that previously triggered a single audit at $750,000 in federal spending will fall below the $1 million line and exit single audit status entirely. Those authorities still face program-specific audit and reporting obligations through HUD, including financial data submission to the Real Estate Assessment Center (REAC), but the full single audit may no longer be required. Confirming where an authority lands relative to the new threshold is the first step every PHA finance officer should take.
Understanding the timing is not a trivial calendar exercise. Because the rules hinge on when the fiscal year begins, two authorities audited in the same calendar period can be governed by different versions of the Uniform Guidance. An authority closing a fiscal year that began before October 1, 2024 still applies the prior $750,000 single audit threshold and the prior $500,000 Type A floor, even if the audit fieldwork itself occurs in 2025. Mapping the correct rule set to each authority’s specific year-begin date prevents misclassification at the outset.
How Does the Type A Threshold Work for Housing Authorities?
Major-program determination is a four-step risk-based process, and the Type A versus Type B split in 2 CFR 200.518 is step one. For an authority that expends $34 million or less in total federal awards, the Type A threshold is the new floor of $1 million. The threshold scales up for larger entities: the breakpoint increases as total federal expenditures grow, so a very large authority or a city housing department consolidated into a larger reporting entity may use a higher Type A line.
For most standalone PHAs, the $34 million tier and the $1 million threshold are the relevant figures. Any federal program with expenditures of $1 million or more is a Type A program. Everything below that is Type B. This single change reshuffles many authorities’ major-program profiles, because programs that were Type A under the old $500,000 floor may now drop to Type B.
Housing authority federal funding is concentrated in a handful of HUD programs, which makes the determination unusually consequential. The largest is typically the Section 8 Housing Choice Voucher program, Assistance Listing 14.871. Other common programs include the Public Housing Operating Fund and the Public Housing Capital Fund. Because voucher spending alone often exceeds $1 million, it usually remains a Type A program even after the threshold doubled.
The doubling matters most for an authority’s secondary programs. A capital fund draw or a smaller grant that sat just above $500,000 under the old rule now falls below the $1 million line and becomes Type B. That can change which programs are tested, the documentation auditors request, and the scope of compliance testing for the year. Reviewing the schedule of expenditures of federal awards (SEFA) early, before fieldwork, lets an authority anticipate the new classification rather than react to it.
It helps to picture the mechanics with a simple profile. Suppose an authority reports voucher expenditures well above $1 million, an operating fund draw near $900,000, and a capital fund grant of $700,000. Under the prior $500,000 floor, all three programs were Type A. Under the new $1 million floor, only the voucher program clears the line, and the operating and capital funds become Type B. The authority’s Type A roster shrinks from three programs to one, which then drives the rest of the determination.
How Are Major Programs Selected After Type A Determination?
Identifying Type A programs is only the start. After the split, the auditor assesses each Type A program as either low-risk or not low-risk. A Type A program is generally low-risk only if it was audited as a major program in at least one of the two most recent audit periods and, in the most recent period, had no material weaknesses in internal control, no modified opinion on the program, and no known or likely questioned costs exceeding five percent of the program’s total federal awards expended.
The auditor then evaluates Type B programs for high risk, applying the risk criteria in the Uniform Guidance. High-risk Type B programs become candidates for major-program testing, though the rules cap how many Type B programs an auditor must assess based on the number of low-risk Type A programs. The objective is to direct testing toward the programs where federal dollars and risk are greatest.
Coverage is the final gate. The auditor must test enough major programs to cover a minimum percentage of total federal expenditures: 20 percent for an authority that qualifies as a low-risk auditee and 40 percent for one that does not. Low-risk auditee status depends on factors such as timely single audit submissions, unmodified opinions on the financial statements and the SEFA, and the absence of certain prior-year findings. For a housing authority whose voucher program dominates the SEFA, that one program may satisfy a large share of the coverage requirement, but auditors still confirm the math program by program.
Because PHA funding is concentrated, the new thresholds can produce a counterintuitive result: an authority may have fewer Type A programs yet face the same or broader testing if its risk profile pushes Type B programs into scope or if it loses low-risk auditee status. The reduced Type A count does not automatically shrink the engagement, because the percentage-of-coverage requirement is anchored to total federal expenditures, not to the number of major programs. An authority that drops from three Type A programs to one still has to clear the same coverage percentage, so the remaining major program carries more of the testing weight.
Coordinating with auditors who understand HUD programs helps an authority forecast scope accurately. Pease Bell’s HUD audit and accounting services are built around these program-specific requirements, and the firm’s broader nonprofit and governmental practice supports the financial statement and compliance work that surrounds the single audit. Aligning the major-program analysis with the HUD reporting calendar keeps the two workstreams from colliding late in the cycle.
Practical Steps for FY2025 Compliance
Start by recalculating total federal expenditures against the $1 million single audit threshold. If an authority lands below it, document the determination and confirm remaining HUD reporting duties; if it lands above, the single audit proceeds under the new rules. Either way, the SEFA is the controlling document, so reconcile it to the general ledger and to HUD reporting before the auditor arrives.
Next, apply the $1 million Type A threshold to each federal program on the SEFA and flag which programs shift between Type A and Type B compared with the prior year. Pull the two prior audit periods to assess whether each Type A program can qualify as low-risk, since prior findings, modified opinions, and questioned costs directly affect that status. This historical review is often where surprises surface, so it should not wait until fieldwork.
Confirm whether the authority meets the low-risk auditee criteria, because the 20 percent versus 40 percent coverage difference can materially change the engagement. Timely submission to the Federal Audit Clearinghouse and clean prior-year opinions are central to that status. Authorities that track these items through the year, rather than at audit time, tend to keep coverage and cost predictable.
Document each judgment as you go. Recording the year-begin date, the total federal expenditures figure, the Type A and Type B classification for every program, and the low-risk auditee analysis creates a clear trail the auditor can review and a reference the authority can reuse next cycle. A written determination also protects the authority if a program’s classification is later questioned, because the basis for each call is preserved rather than reconstructed after the fact.
Frequently Asked Questions
What is the Type A program threshold for housing authorities under the 2024 Uniform Guidance?
For a housing authority that expends $34 million or less in total federal awards, the Type A program threshold is $1 million under the revised 2 CFR 200.518. Federal programs with expenditures at or above $1 million are Type A; those below are Type B. The threshold scales higher for entities that expend more than $34 million in federal awards.
When do the new single audit and Type A thresholds first apply?
The 2024 Uniform Guidance changes apply to non-federal entity fiscal years beginning on or after October 1, 2024. For a calendar-year PHA, that is the 2025 audit; for a June 30 fiscal year, it is the year beginning July 1, 2025. The single audit threshold for that period rises to $1,000,000 in federal expenditures.
Will a smaller housing authority still need a single audit?
Only if it expends $1 million or more in total federal awards during the fiscal year, up from the prior $750,000 threshold. An authority below $1 million generally falls outside the single audit requirement, though it must still meet HUD program reporting obligations, including REAC submission and any program-specific audit requirements.
Does the Housing Choice Voucher program remain a major program?
Often, yes. Section 8 Housing Choice Voucher expenditures (Assistance Listing 14.871) typically exceed $1 million at most authorities, so the program usually remains a Type A program and a strong candidate for major-program testing. The final determination still depends on the program’s risk assessment and the authority’s overall coverage requirement.
