Single Audit Act — Federal Grant Oversight & Compliance
The Single Audit Act (31 U.S.C. §§ 7501–7506) requires state governments, local governments, Indian tribes, and nonprofit organizations that spend $1,000,000 or more in federal awards in a fiscal year to undergo a single, organization-wide audit of their federal programs — rather than separate audits for each federal grant. Before the Act, a university receiving grants from 20 different federal agencies might face 20 separate audits with different requirements, creating enormous administrative burden and inconsistent oversight. The single audit streamlines this by examining all federal expenditures in one comprehensive audit, conducted by an independent auditor following standards set by the OMB Uniform Guidance (2 CFR Part 200). Single audits are the federal government's primary mechanism for ensuring that the approximately $1 trillion+ in annual federal grants to state, local, and nonprofit entities is spent in accordance with federal law and grant terms.
Current Law (2026)
| Parameter | Value |
|---|---|
| Governing law | 31 U.S.C. §§ 7501–7506 (Single Audit Act, 1984; amended 1996) |
| Implementing guidance | 2 CFR Part 200 — OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements (Uniform Guidance) |
| Threshold | $1,000,000 in federal expenditures in a fiscal year (raised from $750,000 effective Oct. 1, 2024 by the OMB Uniform Guidance revisions; prior raise from $500,000 in 2014) |
| Who must comply | State/local governments, Indian tribes, nonprofit organizations spending above the threshold |
| Audit frequency | Annually (or biennially for certain entities with appropriate state legislation) |
| Auditor | Independent CPA firm or state/local government audit organization |
| Submission | Audit reports submitted to the Federal Audit Clearinghouse (FAC) within 30 days of receipt or 9 months after fiscal year end |
| Major program determination | Based on a risk assessment considering dollar size, prior audit findings, and program complexity |
| Federal spending subject to single audit | $1+ trillion annually in federal grants and cooperative agreements |
Legal Authority
- 31 U.S.C. § 7502 — Audit requirements; exemptions (non-federal entities that expend $1,000,000 or more in federal awards must have a single audit; entities below the threshold are exempt but must maintain records available for review)
- 31 U.S.C. § 7503 — Relation to other audit requirements (the single audit satisfies federal audit requirements for all programs — individual federal agencies may not impose duplicative audit requirements)
- 31 U.S.C. § 7504 — Federal agency responsibilities (each federal agency must ensure that audits are completed, that audit findings are resolved, and that corrective action is taken on deficiencies identified)
- 31 U.S.C. § 7505 — Regulations (OMB must prescribe implementing guidance — currently 2 CFR Part 200, Subpart F)
- 31 U.S.C. § 7506 — Effective date (establishes effective dates for audit requirements)
How It Works
Instead of each federal agency auditing its own grants separately — which created duplicative and inconsistent oversight — the single audit examines an organization's entire universe of federal expenditures in one engagement. It has two components: a financial statement audit (examining the entity's financial statements for material misstatement) and a compliance audit (testing whether the entity complied with federal requirements — allowable costs, matching requirements, eligibility determinations, reporting — for its major federal programs). Not every program is tested in detail; the auditor identifies major programs through a risk-based assessment considering dollar magnitude, history of prior findings, and inherent program complexity, then tests enough major programs to cover 20–40% of total federal expenditures. The governing regulation is the OMB Uniform Guidance (2 CFR Part 200), which covers every aspect of federal grant management from pre-award through closeout — Subpart F specifies who must be audited, applicable standards (Government Auditing Standards, the "Yellow Book"), what must be tested, and how findings must be reported. The Uniform Guidance consolidated earlier OMB Circulars (A-133, A-87, A-21, A-110, A-122, A-102) into a single document.
When the auditor identifies a deficiency — questioned costs, material weakness, significant deficiency, or noncompliance — the entity must prepare a corrective action plan addressing each finding. Federal awarding agencies (designated as "cognizant" or "oversight" agencies) are responsible for resolving findings: ensuring corrective action is taken, questioned costs are repaid if necessary, and recurrence is prevented. Unresolved findings can lead to grant conditions, fund withholding, or suspension/debarment. All single audit reports must be submitted electronically to the Federal Audit Clearinghouse (FAC) within 30 days of receiving the auditor's report or within 9 months of fiscal year end, whichever is earlier — the FAC is a public database at fac.gov where anyone can search and download single audit reports, making them a transparency tool for tracking how federal grant funds are spent across all levels of government.
How It Affects You
If you work for a state or local government receiving federal grants: The $1,000,000 threshold in federal expenditures triggers the single audit requirement — and virtually every state, most counties, and many cities exceed it. The single audit is not optional. Your government must contract with an independent CPA firm with Government Auditing Standards ("Yellow Book") qualifications, submit the audit report to the Federal Audit Clearinghouse within 9 months of fiscal year end (or 30 days after receiving the auditor's report), and respond to each finding with a written corrective action plan. Audit fees are an allowable cost under most federal grants — build them into your indirect cost rate or individual grant budgets. The most common findings: inadequate controls over federal expenditures, unallowable costs charged to grants, matching fund documentation gaps, and late or inaccurate federal financial reports. If your audit produces a finding, your cognizant federal agency (the agency providing the most federal funding) is responsible for resolution — they will track whether your corrective action actually fixed the problem. Unresolved repeat findings can trigger grant conditions, fund withholding, or suspension/debarment. The FAC public database at fac.gov lets anyone search your organization's audit history.
If you run a nonprofit organization receiving federal funding: The $1,000,000 threshold applies to your organization's total federal expenditures across all federal awards — direct grants from federal agencies, pass-through grants from state and local governments that originate from federal sources, and federal contracts. Single audits require specialized auditors (not all CPAs do Yellow Book audits) and cost significantly more than a basic financial statement audit — typically $15,000–$50,000 for smaller nonprofits, more for complex organizations. The Uniform Guidance (2 CFR Part 200) governs not just the audit but your entire grant management framework — cost allocation, procurement, conflict of interest, records retention, and program compliance. If you're below the $1,000,000 threshold, federal pass-through funders may still require financial statement audits or agreed-upon procedures engagements; check your grant agreements. Submit your single audit at fac.gov (the FAC moved from Census to GSA in 2023).
If you manage or oversee federal grants at a federal agency: Single audit reports are your primary monitoring tool for grantees — and the FAC database at fac.gov makes them searchable. As the cognizant agency, you're responsible for issuing management decisions on findings within 6 months, tracking corrective action, and closing findings when corrective action is complete. When a grantee has repeat findings across multiple audit cycles without genuine corrective action, the appropriate escalation is grant conditions, additional reporting requirements, or — for persistent noncompliance — withholding or suspension. OMB's Uniform Guidance Compliance Supplement (updated annually) specifies what compliance requirements auditors must test for each major federal program; review your program's supplement section to understand what your grantees are being tested on.
If you're a journalist, watchdog, or researcher tracking federal spending: Single audit reports are one of the most underutilized public accountability tools for federal grant spending. The Federal Audit Clearinghouse at fac.gov lets you search by entity name, EIN, state, federal program (CFDA/ALN number), or finding type. Every organization spending $1,000,000+ in federal funds must submit here — state agencies, cities, school districts, hospitals, universities, and nonprofits. Findings of questioned costs identify specific dollar amounts auditors believe were improperly charged to federal programs. Repeat findings — the same deficiency appearing across multiple audit years — signal systemic compliance failures. Cross-reference single audit findings with USASpending.gov grant award data to see what a grantee received and whether it was managed well.
State Variations
The Single Audit Act is federal, but state implementation varies:
- Some states have established state single audit requirements that parallel the federal requirements
- State audit offices may conduct single audits of state agencies receiving federal funds
- Biennial audits are permitted in states with appropriate enabling legislation
- State pass-through entities (states that sub-grant federal funds to local governments and nonprofits) have responsibility for monitoring their subrecipients' compliance
- State laws may impose additional audit requirements beyond the federal single audit
Implementing Regulations
- 2 CFR Part 200, Subpart F — OMB Uniform Guidance audit requirements (§§ 200.500–200.521 — single audit thresholds, audit scope, auditor selection, compliance requirements, reporting, federal agency responsibilities)
- 2 CFR 200.507 — Program-specific audits (alternative to single audit for entities receiving awards under only one federal program)
- 2 CFR 200.332 — Requirements for pass-through entities (subrecipient monitoring, risk assessment, audit follow-up)
- GAO Government Auditing Standards (Yellow Book) — auditing standards that govern single audits performed under the Act
Pending Legislation
No standalone Single Audit Act reform bills have been introduced in the 119th Congress. Grant oversight and audit provisions appear in broader government accountability legislation — see Inspectors General for complementary oversight — see Government Accountability & Inspectors General and Federal Grants.
Recent Developments
OMB updated the Uniform Guidance in 2024 with revisions to Subpart F audit requirements, including adjustments to the major program determination methodology and clarification of auditor responsibilities. The COVID-19 pandemic dramatically increased federal grant spending (CARES Act, American Rescue Plan, ARPA), creating an unprecedented volume of single audits and strain on the audit profession's capacity. Many entities that had never previously triggered the $1,000,000 threshold suddenly required single audits due to pandemic relief funding. The ARRA (2009) was the first major test of this scaled-up oversight model — its grant award terms at 2 CFR Part 176 required recipients to separately identify Recovery Act expenditures in their single audit findings, establishing the program-level tracking approach later adopted for CARES Act and ARPA. The Federal Audit Clearinghouse transitioned from Census Bureau to GSA management, with modernization of the submission and search platform. OMB has also focused on reducing audit burden for low-risk entities while increasing scrutiny of high-risk programs.
- DOGE grant freezes create single audit anomalies (2025): DOGE-directed freezes on federal grants in early 2025 — affecting USAID, DOE, and other agency awards — created compliance questions for grantees mid-audit-cycle. Grantees whose grant activities were suspended mid-year face audit findings related to suspended programs, unspent funds held beyond permissible periods, and disrupted matching fund arrangements. OMB issued guidance clarifying that grantees must continue single audit compliance for active awards; formally terminated awards are subject to final audit requirements. The volume of disrupted grants will create an unusual audit cycle for FY2025 single audits filed in 2026, with auditors needing to document grant status changes as part of major program testing.
- IG dismissals reduce single audit oversight follow-through (2025): Trump fired 17 Inspectors General in January 2025, reducing oversight capacity at HHS, DOT, DOD, and other major grant-making agencies. IGs are the primary federal users of Single Audit Act findings — they review Federal Audit Clearinghouse data to identify grantees with material weaknesses for follow-up investigation and corrective action. With reduced IG staff, fewer audit findings will be translated into recovery of misspent funds or corrective action agreements. OMB's Office of Federal Financial Management, which coordinates cross-agency grant oversight, has also faced staffing reductions under DOGE directives.
- ARPA final audit cycle approaching — deadline December 31, 2026: State and local governments that received American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (approximately $350 billion total) must obligate by December 31, 2024 and expend by December 31, 2026. The final ARPA single audit cycle — covering FY2025 and FY2026 expenditures — will be the largest post-pandemic audit volume, with auditors reviewing whether ARPA funds were spent on allowable expenditure categories (government services, infrastructure, broadband, housing) and in compliance with Treasury guidance. Grantees should ensure all ARPA expenditure is documented and categorized before the 2026 deadline; Treasury has conducted compliance monitoring with civil money penalty authority for misclassified expenditures.