Single Audit Threshold: What the $1 Million Change Means

The single audit threshold is $1,000,000. Under the 2024 revisions to the Uniform Guidance (2 CFR Part 200), any non-federal entity that expends $1 million or more in federal awards during its fiscal year must have a single audit or program-specific audit conducted for that year. This higher threshold applies to fiscal years beginning on or after October 1, 2024, and replaces the prior $750,000 threshold that had been in place since 2014.

If your organization receives federal grants, contracts, or pass-through awards, this change directly affects whether you are required to undergo a single audit and what that audit will examine.

What Is a Single Audit?

A single audit is an organization-wide financial statement and federal compliance audit required for entities that expend significant amounts of federal funding. It is governed by 2 CFR Part 200, Subpart F and the OMB Compliance Supplement. Rather than conducting separate audits for each individual federal program, a single audit covers all federal programs in one coordinated engagement, combining an audit of the financial statements with a review of federal award compliance.

The single audit requirement applies broadly: state and local governments, nonprofits, public universities, housing authorities, and tribes all fall within its scope if they cross the expenditure threshold. For-profit entities are generally subject to a different set of federal requirements, though for-profit subrecipients of federal pass-through awards may face review by the pass-through entity. The key measure is federal awards expended during the fiscal year, which aggregates spending across all federal programs, not just individual grants.

How Federal Expenditures Are Counted

The expenditure test uses total federal awards expended, not total federal awards received or awarded. Pass-through awards from a state or local government count the same as direct federal awards. Loans, loan guarantees, property, donated surplus property, direct appropriations, and other assistance all factor in depending on the nature of the award. The Schedule of Expenditures of Federal Awards (SEFA) is the document prepared by the auditee that lists every federal program, the applicable Assistance Listing Number (which replaced the older Catalog of Federal Domestic Assistance, or CFDA, number), and total expenditures, and it forms the foundation of the single audit.

The $1 Million Threshold: What Changed and When

The Old Threshold

From 2014 through fiscal years beginning before October 1, 2024, the single audit threshold was $750,000 in federal awards expended per year. That figure had been set by the original 2013 Uniform Guidance rulemaking, which itself was an increase from the prior $500,000 threshold under OMB Circular A-133.

The 2024 Revisions

In April 2024, the Office of Management and Budget (OMB) published a comprehensive overhaul of 2 CFR Part 200, now formally titled “OMB Guidance for Federal Financial Assistance.” The rulemaking touched 69 of the 191 sections across the six subparts and twelve appendices. Among the headline changes for single audits:

• Single audit threshold: Increased from $750,000 to $1,000,000 in annual federal expenditures.
• Type A program threshold: Raised to $1,000,000 for entities with total federal expenditures of $34 million or less (up from $750,000 for entities at or below $25 million).
• Type B program definition: Programs with expenditures below the Type A threshold.
• De minimis indirect cost rate: Increased from 10% to 15% of modified total direct costs.
• Equipment threshold: Increased from $5,000 to $10,000 per unit.
• Modified total direct cost subaward exclusion: The portion of each subaward excluded from the modified total direct cost base rose from $25,000 to $50,000.
• Cybersecurity: New requirement for recipients and subrecipients to implement reasonable cybersecurity measures, including data encryption and multi-factor authentication, as part of internal controls.

Effective Date

The 2024 revisions became effective October 1, 2024. For single audits specifically, the new $1 million threshold applies to fiscal years that begin on or after October 1, 2024. In practical terms, the earliest fiscal years affected are those ending on or after September 30, 2025. Audits covering fiscal years that began before October 1, 2024, remain subject to the prior $750,000 threshold. Organizations with non-standard fiscal year ends should confirm the applicable rules with their auditor based on when their fiscal year begins relative to October 1, 2024.

Who This Affects

Organizations Newly Exempt

The most immediate impact of the threshold increase is that organizations spending between $750,000 and $999,999 per year in federal awards are no longer required to have a single audit. For many smaller nonprofits, community organizations, and local governments operating near the old threshold, this eliminates a significant compliance cost and administrative burden. OMB’s stated intent was to direct audit effort toward programs with the most federal dollars at risk, rather than spreading audit resources across smaller recipients where the compliance cost was disproportionate.

That said, federal exemption from a single audit does not mean those records are off-limits. Under 2 CFR 200.501(e), an organization that is exempt from the audit requirement must still maintain records of federal awards and make them available for review or audit by federal agencies, pass-through entities, and the Government Accountability Office (GAO). Pass-through entities may also impose their own subaward monitoring requirements regardless of whether a subrecipient triggers a single audit.

Organizations Still Required to Comply

Any entity expending $1,000,000 or more in federal awards annually remains subject to the single audit requirement. For large nonprofits, universities, state agencies, housing authorities, and other federal award recipients operating well above the threshold, the day-to-day compliance picture is largely unchanged. What does change is the structure of major program determination, addressed below.

The Major Program Determination Shift

The single audit does not audit every federal program with equal depth. Instead, auditors apply a risk-based approach under 2 CFR 200.518 to identify which programs are “major” and therefore subject to full compliance testing.

The process works through Type A and Type B classification. Type A programs are the larger federal programs at an entity. Under the updated table, for an entity with total federal expenditures of $34 million or less, any program with expenditures of $1,000,000 or more is a Type A program. (For entities with more than $34 million in total federal expenditures, a sliding scale applies.) Type A programs are presumed to be major programs unless the auditor determines the program is low-risk based on prior audit history. Type B programs, those below the Type A threshold, may be selected for audit based on a risk assessment.

The coverage requirement remains: auditors must audit major programs covering at least 20% of total federal expenditures for a low-risk auditee, and at least 40% for a high-risk auditee. Because the Type A threshold rose in parallel with the single audit threshold, the practical effect is that the universe of programs classified as Type A has shifted upward for many entities. Organizations that were previously borderline Type A may now be Type B and therefore subject to the auditor’s risk-based discretion rather than automatic major program classification.

Practical Implications for Finance Teams

Reassess Your Expenditure Totals Annually

The single audit threshold is measured per fiscal year. Federal funding levels fluctuate as grants are awarded, depleted, or supplemented. An organization that fell below $1 million in federal expenditures in fiscal year 2024 may exceed it in fiscal year 2025 based on new awards. Finance teams should monitor cumulative federal expenditures against the $1 million mark throughout the year, not just at year-end. Surprises close to year-end create compressed timelines and can lead to a rushed engagement.

Update Your SEFA

The SEFA must reflect all federal awards expended during the fiscal year. Many organizations undercount because they overlook pass-through awards received from state agencies, Medicare and Medicaid payments in certain contexts, or federal loan balances that must be included under specific circumstances. A SEFA that incorrectly omits programs can create material noncompliance findings. If your organization is near the $1 million threshold, a careful bottom-up review of all federal funding sources before fiscal year-end is well worth the time.

Plan Ahead If You’re Newly Triggering the Requirement

Organizations newly crossing $1 million in federal expenditures for the first time face a common challenge: they may not have an auditor with single audit experience engaged, may not have maintained records in the format auditors need, and may not be prepared for the compliance testing that accompanies the financial statement audit. Single audits have longer timelines than ordinary financial statement audits and require documentation of internal controls over federal programs, not just financial reporting controls. Getting an auditor engaged early, before year-end, reduces friction substantially.

Modus conducts single audits and federal compliance engagements for nonprofits and government entities. AI-native audit workflows allow for faster turnaround and source-linked workpapers, which reduces back-and-forth during fieldwork.

Understand What Auditors Will Test

Under Subpart F, auditors test compliance with the specific requirements of each major program. Those requirements are spelled out in the annual OMB Compliance Supplement and vary by program. Common compliance areas include allowable costs and activities, eligibility, reporting, cash management, subrecipient monitoring, and procurement. A finding in any of these areas is reported in the schedule of findings and questioned costs, which is a public document. Organizations that serve federal beneficiaries, such as nonprofits receiving HHS or HUD grants, should familiarize their program staff with the specific compliance requirements for each major program before the audit begins.

Relationship to Other Audit Requirements

The single audit threshold is separate from other federal audit requirements that may apply to your organization. A few distinctions are worth keeping clear:

• Employee benefit plan audits: Large plan filers with the DOL are generally required to have an independent audit of the plan. For plan years beginning on or after January 1, 2023, a defined contribution plan such as a 401(k) counts only participants with account balances at the beginning of the plan year, rather than all eligible participants, and needs an audit once that count reaches 100 (subject to the 80-120 participant rule). This requirement is set under ERISA and DOL regulations, not the Uniform Guidance, and is unaffected by the $1 million single audit threshold.
• State audit requirements: Many states have their own audit thresholds for nonprofits receiving state funds, often set by the state attorney general or a charitable solicitation statute. A single audit exemption under the Uniform Guidance does not eliminate state-level requirements.
• Federal program-specific audit requirements: Some federal programs impose their own audit requirements separate from or in addition to the single audit. Federal Student Aid (Title IV) is one example. Always review the terms and conditions of each award.

Related reading: Single Audit Explained: When Federal Funding Triggers One

Frequently Asked Questions

What is the single audit threshold in 2024?

The single audit threshold is $1,000,000 in federal awards expended per fiscal year, effective for fiscal years beginning on or after October 1, 2024. This was increased from the prior threshold of $750,000, which had been in effect since 2014. The change was part of the OMB’s April 2024 revisions to 2 CFR Part 200, the Uniform Guidance.

What happens if my organization spends less than $1 million in federal awards?

An organization that expends less than $1,000,000 in federal awards during a fiscal year is exempt from the federal single audit requirement for that year. However, under 2 CFR 200.501(e) the organization must still maintain records of federal expenditures and make those records available for review by federal agencies, pass-through entities, and the GAO. Some pass-through entities impose additional monitoring requirements on subrecipients regardless of single audit status.

Does the $1 million threshold apply to each grant individually or in total?

The threshold is based on total federal awards expended across all programs during the fiscal year, not on any individual grant. If an organization receives five federal grants and its combined expenditures from all five total $1,100,000, it must have a single audit even if no individual grant exceeded $1 million.

When did the $1 million single audit threshold take effect?

The $1 million threshold applies to fiscal years that begin on or after October 1, 2024. The earliest fiscal years affected in practice are those ending on or after September 30, 2025. The 2024 revisions to 2 CFR Part 200 were published in the Federal Register on April 22, 2024 and became effective October 1, 2024. Audits covering fiscal years that began before October 1, 2024, remain subject to the prior $750,000 threshold.

What is a Type A program under the 2024 Uniform Guidance?

A Type A program is a federal program large enough to be presumed a major program subject to full compliance testing in a single audit. Under the 2024 revisions, for entities with total federal expenditures of $34 million or less, any program with expenditures of $1,000,000 or more is classified as Type A. Programs below that level are Type B and may be selected for audit based on a risk assessment. For entities with more than $34 million in total federal expenditures, higher sliding-scale thresholds apply.

Who conducts a single audit?

A single audit must be conducted by an independent auditor, typically a public accountant or a federal, state, local government, or tribal audit organization. Under 2 CFR 200.514, the audit must be performed in accordance with Generally Accepted Government Auditing Standards (GAGAS), set out in the GAO’s Government Auditing Standards, known as the Yellow Book, which carry their own independence requirements. The same auditor typically conducts both the financial statement audit and the federal compliance testing as part of a combined single audit engagement.