A nonprofit expends $4 million in federal awards and assumes a regular GAAS audit will do. It will not. The Uniform Guidance triggers a single audit, which adds compliance testing on every major program. Miss the trigger and the auditor is the one cited.
HIGH-FREQUENCY: A non-federal entity that expends $1,000,000 or more in federal awards in a fiscal year must have a single audit. This is Subpart F of the Uniform Guidance (2 CFR Part 200).
KEY: $1,000,000 is the trigger. It is expended, not received. A grant awarded but not yet drawn down does not count.
The Uniform Guidance applies to states, local governments, Indian tribes, universities, and nonprofits. It does not apply to commercial for-profit entities. Pass-through funds count: if a state passes $1M of a federal grant to a local nonprofit, the nonprofit treats those funds as federal awards.
Major programs get full compliance testing; non-majors do not. The auditor selects them in four steps.
Step 1: Type A and Type B. Type A is large; Type B is everything else. The threshold scales with total expenditures.
Common mistakes
- Treating "received" as "expended" for the $1,000,000 threshold. A $2M grant signed but only $400K drawn does not trigger a single audit. Trap: candidates use the headline grant amount.
- Selecting all Type A programs as major automatically. Skipping Step 2 ignores the risk-based approach.
- Setting coverage at 50% / 25%. Those were the OMB A-133 numbers. Current rule is 40% / 20%. Trap answers: 50% and 25%.
Bottom line
- Single audit triggers when a non-federal entity expends $1,000,000 or more in federal awards in a fiscal year (Uniform Guidance, 2 CFR 200 Subpart F).
- Major programs are selected by a risk-based approach: identify Type A and Type B by size, then assess each for risk.
- Type A programs exceed a threshold that scales with total federal expenditures; Type B programs are everything else.
- Type A is high-risk by default; low-risk status requires a recent clean major-program audit and no significant changes.
Exam shortcut
When a fact pattern names a grant amount, ask: expended or received? Only expended hits the $1,000,000 trigger. Coverage = 40% normal, 20% low-risk auditee, not the legacy 50% / 25%. Memory aid: "Two years, all clean" for low-risk auditee: both preceding periods unmodified, no material weakness, no material noncompliance, no going concern. The Compliance Supplement is the gatekeeper for which of the 12 requirements get tested on each program.
The full lesson (about 1,814 words, 12 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- II.G4
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