Nonprofit
Changes to Uniform Guidance for Single Audits: What Nonprofits Need to Know
The rules for Single Audits are changing, and for many nonprofits, that’s welcome news. In April 2024, the Office of Management and Budget (OMB) issued final revisions to the Uniform Guidance, including a significant update to the threshold for when a Single Audit is required. These changes take effect for fiscal years beginning on or after October 1, 2024.
If your organization receives federal funding, here’s what you need to know and how to prepare.
What is a Single Audit?
A single audit is a comprehensive audit of a nonprofit’s financial statements, controls over compliance and compliance with its federal grant awards, performed by an independent auditor. It ensures that organizations:
- Use federal funds according to applicable laws and regulations
- Maintain strong internal controls
- Provide transparency for federal agencies and stakeholders
Historically, a Single Audit was required for any entity spending $750,000 or more in federal awards during a fiscal year. That threshold has remained the same since 2015 — until now.
The Threshold is Increasing
Under the revised Uniform Guidance, the Single Audit threshold will increase from $750,000 to $1,000,000 in federal expenditures.
What this means:
- If your organization spends less than $1,000,000 in federal awards in a fiscal year, you will no longer be required to undergo a Single Audit.
- This change will reduce the compliance burden for many smaller organizations, saving both time and costs.
- Larger nonprofits that exceed the new threshold will still be required to complete a Single Audit and meet all related reporting requirements.
Why the Change Matters
For nonprofits just above the old $750,000 threshold, the cost and time investment of a Single Audit could be significant. By raising the threshold, the OMB aims to:
- Reduce administrative burdens
- Allow smaller organizations to direct more resources toward mission-driven work
- Focus oversight efforts on higher-dollar federal awards where the risk is greater
It’s worth noting that while fewer organizations will require a Single Audit, those that fall below the threshold are still responsible for following federal grant requirements and maintaining strong financial management practices.
Preparing for the Transition
The new threshold applies to fiscal years beginning on or after October 1, 2024. For calendar-year organizations, it will first impact the 2025 fiscal year.
Here’s what your nonprofit can do right now to prepare:
1). Assess Your Federal Funding Levels
Review your current and projected federal expenditures. Determine if the threshold change will apply to your organization and when.
2). Strengthen Internal Controls
Even without a Single Audit requirement, grantor agencies may still conduct program-specific reviews. Continue to maintain strong policies and documentation.
3). Review Grant Agreements
Some funders may still require an audit as part of their award conditions, regardless of the federal threshold.
4). Plan for Communication
If the change impacts your reporting requirements, keep your board, finance committee, and key stakeholders informed.
A Reminder: Compliance Still Counts
Falling below the Single Audit threshold doesn’t mean compliance obligations disappear. Think of this change as a lighter reporting burden, not a free pass to relax your oversight.
Your organization must still:
- Track and report federal award spending accurately
- Follow all terms and conditions of your grants
- Maintain records for review, if requested by funding agencies
D+L: Guidance You Can Count On
These revisions to the Uniform Guidance are intended to make compliance more manageable for smaller nonprofits while keeping accountability strong for organizations with higher federal funding.
Whether your nonprofit will cross the new $1,000,000 threshold or not, Dugan + Lopatka is here to help you navigate these updates, assess the impact on your organization, and stay fully compliant.
Have questions about how these changes apply to your nonprofit? Contact us today and we’ll walk you through the details to help you prepare for a smooth transition.