What Is the Single Audit Threshold for $1,000,000? Critical Facts

Organizations that receive federal funding must navigate a variety of compliance requirements, and one of the most significant is the Single Audit. As of October 1, 2024, a key update to federal audit policy has taken effect: the Single Audit threshold has been raised from $750,000 to $1,000,000 in federal awards expended during a single fiscal year.

This change is part of ongoing efforts to streamline oversight, reduce unnecessary administrative burden on smaller recipients, and focus federal auditing resources where risk is highest.

What Is a Single Audit?

A Single Audit—also known as a Subpart F Audit—is a comprehensive review of an entity's financial statements and its compliance with federal program requirements. It applies to non-federal entities, including nonprofits, state and local governments, and tribal organizations, that expend a significant amount of federal assistance in a given fiscal year.

Conducted under the Uniform Guidance (2 CFR Part 200, Subpart F) and in accordance with the Yellow Book (GAGAS), the Single Audit consists of two components:

• Financial Audit: Examines the fairness of the entity’s financial statements.
• Compliance Audit: Assesses adherence to the rules and conditions of major federal programs, such as reporting, allowable costs, and procurement.

The New $1,000,000 Threshold

Starting with fiscal years beginning on or after October 1, 2024, organizations that expend $1,000,000 or more in federal awards are required to undergo a Single Audit. This replaces the previous threshold of $750,000, which had been in place since 2015.

Why This Matters

The increase in the threshold brings several important implications:

• Reduced Burden for Smaller Recipients: Organizations expending between $750,000 and $999,999 in federal funds will no longer be required to complete a Single Audit, saving time and resources.
• Higher Bar for Oversight: For entities exceeding the new threshold, the requirement to demonstrate both financial and program compliance becomes even more critical.
• Need for Careful Monitoring: Organizations must closely track all sources of federal funding, including direct grants and pass-through awards, to determine whether they meet the new audit requirement.

In summary, the updated $1,000,000 Single Audit threshold reflects a shift toward risk-based oversight. Organizations near or above this limit should plan proactively to ensure full compliance under the revised rules.