Uniform Guidance & Single Audit Services
Single Audit services in California for nonprofits and public agencies that spend federal awards: the $1M threshold, SEFA, compliance testing and readiness.
Schedule a Consultation
Single Audit Services for California Organizations That Receive Federal Funds
Federal grants and cooperative agreements help nonprofits and public agencies deliver programs, but they come with rules for how funds are spent, documented and reported. Those rules sit in the Uniform Guidance, the Office of Management and Budget (OMB) framework at 2 CFR Part 200, and its Subpart F sets the audit requirements that follow federal spending. RTN CPA provides Single Audit services in California and other states we serve for nonprofit and governmental organizations that expend federal awards, whether the funds come directly from a federal agency or through a pass-through entity.
Below, we explain when a Single Audit is required, what the Schedule of Expenditures of Federal Awards (SEFA) must show, what auditors test and how your team can prepare. For an overview of all our audit work, see Nonprofit Auditing Services.
What Is a Single Audit?
A Single Audit is an organization-wide audit conducted under Subpart F of the Uniform Guidance. One engagement serves the federal agencies and pass-through entities that fund your organization, in place of separate financial audits of each federal award, although agencies may still arrange additional audits. It must be performed under Government Auditing Standards, often called the Yellow Book. A Single Audit combines:
- Financial statements: an opinion on whether they are fairly presented, and on whether the SEFA is fairly stated in relation to them (see financial statement audit services).
- Financial reporting controls and compliance: a report on internal control over financial reporting and on compliance matters material to the financial statements.
- Major program compliance: an opinion on whether the organization complied with federal statutes, regulations and award terms that could have a direct and material effect on each major federal program.
- Internal control over compliance: testing of controls over each major program, reported together with a schedule of findings and questioned costs.
Some organizations can elect a program-specific audit instead, generally when they expend federal awards under only one federal program (other than research and development) and the program's rules or award terms do not require a financial statement audit. Separate conditions apply to research and development programs.
Who May Need a Single Audit?
The test is based on federal awards expended during your fiscal year. A non-federal entity that expends $1,000,000 or more in federal awards in a fiscal year beginning on or after October 1, 2024 must have a Single Audit, or a program-specific audit if it qualifies. For fiscal years that began before October 1, 2024, the threshold was $750,000.
Your fiscal year start date decides which threshold applies. For a June 30 year-end, the year that began July 1, 2024 used $750,000; the year that began July 1, 2025 uses $1,000,000.
The threshold is not measured by total revenue, the face amount of grant awards or cash received.
Funds passed through a California state department, county, city or another nonprofit can still be federal awards. Organizations below the threshold are exempt from federal audit requirements for that year, but records must remain available for review, and California charity rules, grant agreements, lenders or board policy may still require an audit.
- Expenditures under grants, cooperative agreements and cost-reimbursement contracts
- Disbursements of federal funds to subrecipients
- Use of loan proceeds, and certain loan balances with continuing compliance requirements
- Federal noncash assistance, such as donated property or food commodities
- Receipt or use of program income
Understanding the Schedule of Expenditures of Federal Awards (SEFA)
The SEFA lists the federal awards your organization expended during the period covered by its financial statements. Management prepares it; the auditor reports on whether it is fairly stated in relation to the financial statements as a whole and uses it to identify major programs, so an incomplete or misclassified schedule can change the scope of the audit.
A reliable SEFA starts with an award register kept during the year: funding source, award and identifying numbers, Assistance Listing number, period of performance and expenditures by award, reconciled to the general ledger with differences explained.
Internal Control Over Federal Awards
The Uniform Guidance requires recipients and subrecipients to establish, document and maintain effective internal control over federal awards, aligned with the GAO's Standards for Internal Control in the Federal Government (the Green Book) or the COSO Internal Control-Integrated Framework. In a Single Audit, the auditor considers internal control over financial reporting and also obtains an understanding of, and generally tests, internal control over compliance for each major program.
Written policies are a start, but auditors look for evidence that controls operate, such as approval of costs before they are charged to an award, support for payroll allocations and review of funder reports. Where a small team limits segregation of duties, documented review by management or the board can help compensate.
- List individual federal programs by federal agency with Assistance Listing numbers, including cluster names and totals
- Name the pass-through entity and the identifying number it assigned for each award received as a subrecipient
- Show total federal awards expended for each program
- Report the total amount provided to subrecipients from each program
- Disclose year-end loan and loan guarantee balances in the notes
- Include notes on significant accounting policies and whether the de minimis indirect cost rate was elected
Compliance Testing and Major Programs
The auditor does not test every federal program. Under the risk-based approach in 2 CFR 200.518, programs are classified as Type A or Type B by size, assessed for risk and selected as major programs.
For each major program, the auditor uses the Compliance Supplement, which OMB issues as Appendix XI to 2 CFR Part 200, together with the award terms, to identify requirements that could have a direct and material effect.
Not every type applies to every program. Invoices, approvals, payroll allocations, procurement files, eligibility records and funder reports are typical evidence. When a funder requires assurance on grant or contract compliance outside a Single Audit, see our compliance audit services.
Findings, Questioned Costs and Corrective Action
Results are reported in a schedule of findings and questioned costs. Reportable findings include significant deficiencies and material weaknesses in internal control over major programs, material noncompliance and, when known or likely questioned costs exceed $25,000 for a type of compliance requirement for a major program, the known questioned costs. A questioned cost is an amount that, in the auditor's judgment, is noncompliant or suspected noncompliant, lacked adequate documentation at the time of the audit or appeared unreasonable.
Corrective action is management's responsibility. Your organization prepares a corrective action plan for each current-year finding, naming the responsible contact person, the planned action and the anticipated completion date, plus a summary schedule of prior audit findings. If management disagrees with a finding, the plan explains why. The auditor follows up on prior findings but cannot prepare your corrective action plan or make management decisions.
The auditee then submits the data collection form and reporting package to the Federal Audit Clearinghouse (FAC) within 30 calendar days after receiving the auditor's report or nine months after the end of the audit period, whichever is earlier.
- Activities allowed or unallowed, and allowable costs and cost principles
- Cash management, eligibility and period of performance
- Equipment and real property management; matching, level of effort and earmarking
- Procurement, suspension and debarment
- Program income and reporting
- Subrecipient monitoring, and special tests and provisions
Why Organizations Work With RTN CPA on Single Audits
Our assurance practice specializes in nonprofit and governmental organizations, including grant-funded and mission-driven entities. We plan each Single Audit around your funding structure, explain requirements in plain English and stay in touch throughout the year, not only during fieldwork.
Every engagement is subject to professional independence and engagement-acceptance requirements. Management remains responsible for the SEFA, the financial statements and corrective action plans, and any readiness assistance we provide is limited to services the applicable independence rules permit.
We work with organizations across California, including nonprofits in Sacramento and San Diego, and in other states we serve.
- Early planning conversations about funding sources, pass-through relationships and likely audit scope
- Clear request lists and timelines so your team knows what to prepare and when
- Practical recommendations on internal control and compliance processes
- Results explained clearly to management, finance committees and boards
Recipient, Subrecipient or Contractor?
Classification decides whether funds appear on your SEFA, count toward the threshold and carry federal compliance requirements. The pass-through entity decides case by case, and substance matters more than the agreement's title.
- Recipient: Receives a federal award directly from a federal agency to carry out an activity under a federal program. Its expenditures of that award are federal awards expended and belong on its SEFA.
- Pass-Through Entity: A recipient or subrecipient that issues subawards to carry out part of a federal program. It evaluates each subrecipient's risk, monitors the subaward and verifies that subrecipients are audited when Subpart F requires it.
- Subrecipient: Receives a subaward to carry out part of a federal program, for example by determining eligibility or delivering services toward program objectives. Its expenditures count toward its own Single Audit threshold.
- Contractor: Provides goods or services for the recipient's or subrecipient's own use through a procurement relationship, usually within normal business operations. Payments received as a contractor are not subject to audit under Subpart F.
Preparing for a Single Audit
Preparation is management's work. These steps reflect what auditors commonly request.
- 1. Confirm whether the threshold applies: Total federal awards expended for the fiscal year, including pass-through funds and noncash assistance, and compare the total with the threshold for your fiscal year start date.
- 2. Build a complete award inventory: Collect award notices, subaward agreements and amendments, and record the funding source, identifying numbers, Assistance Listing number and period of performance for each award.
- 3. Prepare and reconcile the SEFA: Draft the SEFA from grant-level records, reconcile it to the general ledger and funder reports, and prepare the required notes.
- 4. Organize compliance evidence by award: Keep payroll allocation support, procurement files, cash draw records, eligibility files, funder reports and subrecipient monitoring records organized by award.
- 5. Document how internal controls work: Update procedures for charging costs to grants, approvals, purchasing, reporting and subrecipient oversight, and keep evidence that reviews took place.
- 6. Update the status of prior findings: Draft the summary schedule of prior audit findings with support for corrective actions completed.
- 7. Plan the timeline and contacts: Agree on fieldwork dates, a staff contact for each major program and a report date that leaves room for board review and the FAC deadline.
Explore related assurance services
Detailed guides to each engagement we provide.
Serving organizations across our markets
RTN CPA works with nonprofit organizations in these areas. Choose a location to see local requirements and how we help.
Discuss Your Federal Award Audit Requirements
Approaching the Single Audit threshold for the first time, adding pass-through funding or working through prior findings? RTN CPA can talk through your funding structure, fiscal year and reporting deadlines, and help you understand whether a Single Audit, a program-specific audit or another assurance engagement may apply.
Frequently Asked Questions
Does a $1 million federal grant automatically trigger a Single Audit?
Not necessarily. The test looks at total federal awards expended during your fiscal year across all federal programs, not the face amount of one award or cash received. A $1 million award spent over three years may never reach the threshold in a single year, while several smaller awards together may exceed it. The threshold is $1,000,000 for fiscal years beginning on or after October 1, 2024.
Do federal funds we receive through a California agency count?
They can. Federal awards expended as a subrecipient count toward the threshold even when a state department, county, city or another nonprofit issues the agreement. Look for an Assistance Listing number, a federal award identification number or Uniform Guidance references, and ask the pass-through entity when in doubt. Payments received as a contractor for goods or services are not subject to Single Audit requirements.
Who prepares the SEFA?
Your organization does. The Uniform Guidance makes the auditee responsible for preparing its financial statements and the SEFA and for giving the auditor access to records and staff. The auditor evaluates the SEFA in relation to the financial statements and uses it to determine major programs, so an early, reconciled SEFA helps avoid late scope changes.
When is the Single Audit reporting package due?
The data collection form and reporting package are due to the Federal Audit Clearinghouse within 30 calendar days after you receive the auditor's report or nine months after your fiscal year-end, whichever comes first. An extension is possible only when the cognizant or oversight agency for audit authorizes one, so schedule fieldwork with time for review and board communication.
Is a Single Audit the same as a Yellow Book audit?
No. Government Auditing Standards, the Yellow Book issued by the U.S. Government Accountability Office, govern how certain audits are performed. A Single Audit is a specific engagement required by the Uniform Guidance; it follows those standards and adds federal program compliance and internal control work. Some grant agreements require a Yellow Book audit even when no Single Audit is required.
What if our organization falls below the federal threshold?
Organizations below the threshold are exempt from federal audit requirements for that year, but records must remain available for review by federal agencies, pass-through entities and the Government Accountability Office. California charity reporting rules, grant or contract terms, lenders or your board may still call for an audit or another assurance engagement, so confirm which obligations apply.
Call (888) 616-8070 or schedule a consultation to get started.
Schedule a Consultation