TL;DR: The Office of Management and Budget raised the Single Audit threshold from $750,000 to $1,000,000 in annual federal expenditures. The change applies to fiscal years beginning on or after October 1, 2024. It is measured on federal money spent, not federal money received and not total revenue, and it includes federal funds passed through a state agency or another nonprofit. If you spend under $1,000,000 in federal awards, you likely no longer owe a Single Audit, though your state, your funders, and your loan covenants may still require an audit of some kind.
If your organization receives federal funding, the threshold that decides whether you owe a Single Audit has moved. The Office of Management and Budget revised 2 CFR Part 200, the Uniform Guidance, raising the trigger from $750,000 to $1,000,000 in federal expenditures in a fiscal year. The change takes effect for fiscal years beginning on or after October 1, 2024.
For most organizations with a calendar fiscal year, that means the new threshold first applies to the year beginning January 1, 2025. For June 30 year-ends, it first applies to the year beginning July 1, 2025. Check your own fiscal year start date rather than assuming, because the rule keys off when the year began, not when it ended.
This is a small change with a real consequence. A Single Audit is a significant undertaking. Organizations sitting between $750,000 and $1,000,000 in federal spending have just been moved out of scope, and some of them are still budgeting for an engagement they no longer owe.
What is a Single Audit, and how is it different from a regular audit?
A Single Audit is a compliance audit required of non-federal entities that spend above the threshold in federal awards during a fiscal year. It is broader than a financial statement audit. A financial statement audit asks whether your financials are fairly stated. A Single Audit asks that, and then asks whether you complied with the specific requirements attached to the federal money you spent.
In practice it adds an examination of internal controls over federal programs, testing of compliance requirements for each major program, a Schedule of Expenditures of Federal Awards, and a formal reporting package submitted to the Federal Audit Clearinghouse. It costs more, takes longer, and asks questions a standard audit does not.
The word that trips people up is expenditures
The threshold is measured on federal awards expended, not awards received, not awards promised, and not total organizational revenue. This is the single most common source of error in the calculation, and it cuts both ways.
An organization can receive a $2,000,000 multi-year federal grant and spend only $400,000 of it in a given year. That organization is under the threshold for that year. Another organization can receive nothing new but spend down $1,200,000 of prior-year awards, and it is over. The calculation follows the spending.
Two things people routinely miss when adding it up:
- Pass-through funds count. Federal money that reaches you through a state agency, a county, a university, or another nonprofit is still federal money. It counts toward your total, and it is your responsibility to identify it. The pass-through entity is required to tell you, but the obligation to get the number right is yours.
- Non-cash awards count. Donated federal property, food commodities, insurance, and loan or loan guarantee programs can all carry federal expenditure value. Loan programs in particular have specific rules about how the outstanding balance is treated, and they can push an organization over the line unexpectedly.
If you cannot produce your federal expenditure total in an afternoon, that is worth noticing on its own. The Schedule of Expenditures of Federal Awards is not just an audit deliverable. It is the working record that tells you where you stand before anyone else asks.
You may be under the federal threshold and still owe an audit
This is the part that gets missed in the relief. The federal Single Audit requirement is one obligation among several, and clearing it does not clear the others.
- State law. Many states require a financial statement audit above a revenue threshold, often tied to charitable solicitation registration. Those thresholds vary widely by state and were not changed by the federal revision.
- Funder requirements. A private foundation, a denominational body, or a major institutional donor can require an audit as a condition of a grant regardless of what federal rules say. Read the agreements.
- Loan covenants. If your organization carries debt, the lender may require audited financial statements annually. That obligation lives in the loan documents and is unaffected by OMB.
- Your own bylaws. More organizations than you would expect have an audit requirement written into their own governing documents and have forgotten it is there.
So the correct conclusion is narrower than it first appears. Falling under $1,000,000 in federal expenditures means you likely do not owe a Single Audit. It does not necessarily mean you do not owe an audit.
What to do about it this year
- Confirm your fiscal year start date and determine which year the new threshold first applies to for your organization.
- Calculate federal expenditures properly, including pass-through awards and any non-cash or loan program value. Build the Schedule of Expenditures of Federal Awards even if you turn out to be under, because next year you may not be.
- Inventory every other audit obligation you carry: state registration thresholds, grant agreements, loan covenants, and bylaws.
- Talk to your auditor before you change anything. If you are close to the line, the conversation is worth having early, and the answer may affect how you time spending.
- Do not dismantle the discipline. If you are newly under the threshold, keep the controls, the documentation habits, and the grant tracking. You built them for a reason, and federal spending fluctuates.
That last point deserves weight. The temptation when a compliance requirement lifts is to let the underlying practice lift with it. Resist it. The documentation rigor a Single Audit forces is the same rigor that makes audit readiness a year-round posture rather than an annual scramble, and it is the same rigor funders are increasingly asking about whether or not the federal government requires it.
The Counter-Move
Most organizations treat a threshold change as an accounting question. The better read is that it is a capacity question.
If dropping below the Single Audit threshold saves your organization real money and real staff weeks, the useful question is not what you avoid. It is what you redeploy. The hours that went into Single Audit preparation are hours of your finance team's most careful, most disciplined attention. Spending them instead on forecasting, on cost allocation that actually reflects program reality, or on the reporting your board needs is a materially better use of the same capacity.
Compliance is a floor. Organizations that treat it as a ceiling spend every year clearing the bar and never build anything above it.
A note on getting this right
Nothing in this article is tax or legal advice, and the Uniform Guidance contains detail that a summary cannot carry. Thresholds, effective dates, and program-specific rules should be confirmed against the current text of 2 CFR Part 200 and with your auditor before you act on them. What is written here is meant to help you ask the right question, not to answer it for your specific circumstances.
If you want help building the federal expenditure schedule, sorting out which obligations actually apply to you, or making audit readiness a year-round discipline, that is work we do.