Single Audit (Uniform Guidance)
Quick Definition
A rigorous annual audit required for nonprofits that spend $750,000 or more in federal awards in a single year, covering both financial statements and compliance with federal grant requirements.
What Is Single Audit (Uniform Guidance)?
A single audit (sometimes called an A-133 audit after the old circular, now governed by 2 CFR Part 200 — the Uniform Guidance) is a specialized audit for organizations that receive significant federal funding. If your nonprofit spends $750,000 or more in federal awards during your fiscal year, you're required to have a single audit.
It's called a "single" audit because it was designed to replace multiple grant-specific audits with one comprehensive review. Instead of each federal agency auditing its own grants separately, one audit covers all federal awards. The audit has two components: a financial statement audit (like a regular audit) plus a compliance audit that tests whether you followed the specific rules attached to each major federal program you operate.
The compliance portion examines things like: Did you spend the money on allowable costs? Did you meet matching requirements? Did you follow procurement rules when buying goods and services? Did you submit required reports on time? Did you maintain proper documentation? The auditor tests these compliance requirements for each "major program" — programs selected based on a risk assessment and dollar threshold.
Results are reported on the Federal Audit Clearinghouse, where any federal agency can review them. Findings (problems the auditor identified) can affect your ability to receive future federal funding.
Why It Matters for Nonprofits
A single audit is the most complex and expensive audit a nonprofit can face, but if you're receiving significant federal money, it's non-negotiable. The cost typically ranges from $25,000 to $75,000 or more, depending on the number and complexity of your federal programs.
Audit findings can have real consequences. Questioned costs (expenses the auditor flags as potentially unallowable) may need to be repaid to the federal government. Material weaknesses in internal controls can trigger additional oversight requirements or jeopardize future funding. Clean single audits, on the other hand, build a track record that makes it easier to win competitive federal grants.
Example
A housing and community development nonprofit receives $400,000 from HUD, $250,000 from the Department of Education, and $200,000 from Health and Human Services — $850,000 in total federal expenditures. They trigger the single audit requirement. Their CPA firm conducts the financial statement audit and selects the HUD program as the major program for compliance testing. The auditor tests 60 transactions across procurement, allowable costs, reporting, and matching requirements. They find two minor issues: one late report submission and one purchase that didn't follow competitive bidding rules. These are reported as findings with recommendations. The nonprofit implements corrective actions and notes them in the next year's audit. Total cost: $45,000.
Key Takeaways
- ✅ Required when your nonprofit spends $750,000+ in federal awards in a fiscal year
- ✅ Includes both financial statement audit and compliance testing of major federal programs
- ✅ Results are publicly reported on the Federal Audit Clearinghouse
- ✅ Findings can result in questioned costs, repayment obligations, or jeopardized future funding
How Holdings Helps
Holdings helps nonprofits with federal grants keep their financial records clean and organized, reducing the time and cost of single audit preparation.
Related Terms
Audit vs Review vs Compilation
Three levels of CPA financial statement services — an audit provides the highest assurance (CPA tests everything), a review provides limited assurance (CPA does analytical procedures), and a compilation provides no assurance (CPA just organizes your numbers).
Cost Allocation Plan
A formal, documented plan that describes how your nonprofit divides shared costs across programs and functions — required by most government grants and essential for audit readiness.
Functional Expense Allocation
The process of dividing shared costs (like rent, utilities, and executive salaries) across your program, management, and fundraising functions based on a reasonable methodology.
Form 990 / 990-EZ / 990-N
The annual tax return that most tax-exempt organizations must file with the IRS, reporting their finances, governance, and activities to the public.
Fund Accounting
An accounting system that tracks money based on the restrictions donors and grantors place on it, rather than just tracking overall profit and loss like a for-profit business.
Restricted vs Unrestricted Funds
Unrestricted funds can be spent on anything the nonprofit needs; restricted funds must be used for the specific purpose the donor or grantor designated.
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