The Single Audit Act (The Act) was first enacted by Congress in 1984 and was intended to establish uniform audit requirements for Federal awards. The Act mandated that the Federal Office of Management and Budget (OMB), after consultation with the Comptroller General, prescribe policies, procedures and guidelines to implement the provisions of the Act.

In 1985, the OMB issued administrative Circular A-128, Audits of State and Local Governments to provide guidance to state and local governments in implementing the provisions of the Single Audit Act and set forth standards for obtaining consistency and uniformity among Federal agencies which received or conducted state and local government audits. Combined, the Act and Circular A-128 mandated that grant recipients do the following:

• Engage an independent auditor to conduct an annual audit in conformance with Generally Accepted Auditing Standards (GAAS) if the entity received $25,000 or more in Federal awards;
• Cover all of the government’s operations in its Single Audit;
• Determine that the financial statements of the government present fairly its financial position and the results of its financial operations in accordance with GAAP;
• Determine that the government unit complied with laws and regulations that may have a material effect upon the financial statements of each major Federal program;
• Determine that the government unit has internal control systems in place to provide reasonable assurance that it is managing Federal award programs in compliance with applicable laws and regulations; and
• Prepare a Schedule of Expenditures of Federal Awards that identifies expenditures of Federal monies for each Federal program.

As noted above, the Act requires an annual audit of non-Federal entities receiving a certain level of Federal financial assistance. A Single Audit (i.e., one audit of the entire entity) performed under the Act is intended to satisfy all Federal agencies providing assistance to the entity.

Although non-profit organizations and universities were not included in the original act, in April 1996, guidelines were established in OMB Circular A-133, Audits of Institutions of Higher Education and Other Non-Profit Institutions which prescribed policies or specific audit requirements for these groups of grant recipients.

Single Audit Act Amendments of 1996

In July 1996, the Single Audit Act Amendments of 1996 were signed into law. OMB substantially revised Circular A-133 to incorporate the provisions of the amended Act and the guidelines of A-128. Upon passage of A-133, Circular A-128 was rescinded.

Circular A-133 was further revised in June 2003 and June 2007.

Uniform Guidance

In December 2013, Title 2 of the Code of Federal Regulations (CFR) part 200 (also referred to as Uniform Guidance) was issued, which superseded all prior circulars.

Following is a summary of the Uniform Guidance as outlined in 2 CFR 200.500 :

• The minimum threshold at which a Single Audit must be conducted is $750,000 or more in Federal award expenditures during the non-Federal entity’s fiscal year.  Non-Federal entities receiving less than $750,000 are exempt from the Single Audit for that year, except as noted in Section 200.503.
• Audits generally must be conducted on an annual basis.
• Recipients that pass through Federal awards to subrecipients are required to ensure that a system is in place to assure subrecipient compliance with the provisions of the Uniform Guidance. Subrecipients do not include vendors.
• A Federal program is defined as Federal awards which are assigned an Assistance Listing Number (ALN)(formerly CFDA). The ALNs are managed and administered by the General Services Administration (GSA) and can be found at SAM.gov.
• All Award recipients are required to prepare a Schedule of Expenditures of Federal Awards that identifies expenditures, including non-cash awards, by Federal agency using the applicable  ALNs.
  • Awards received as a subrecipient, the name of the pass-through entity and pass-through entities identifying number must be included.
  • Include the total amount provided to subrecipients from each Federal award program.
  • Include notes describing the significant accounting policies used in preparing the schedule.
• The Single Audit report must be submitted within the earlier of 30 calendar days after the non-Federal entity receives the auditor’s report or nine months after the close of the reporting period. The auditor must determine that the Schedule of Expenditures of Federal Awards is presented fairly in all material respects in relation to the State’s financial statements taken as a whole.
• Prescribes a risk-based approach to determine major programs subject to the Single Audit.

Single Audit Risk Assessment

A risk-based approach shall be used by the independent auditor to determine which programs will be subject to the Single Audit. The auditor will use the following table to determine which programs are to be labeled Type A.  Any program not labeled Type A must be labeled Type B. 

The Auditor will use Section 200.519 to determine low risk Type A programs and High risk Type B programs.

At a minimum, the auditor must audit all the following as major programs:

1. All Type A programs not identified as low-risk.
2. All Type B programs identified as high-risk.
3. Additional programs to meet percent of coverage rule, which pertains to low risk auditees.
   1. All major programs noted above plus additional Federal programs that in aggregate encompass at least 20 percent of total Federal award expended; or
   2. Auditor must audit major programs noted above plus additional Federal programs that in aggregate encompass at least 40 percent of total Federal awards expended. 

Using the risk-based approach, the auditor should take into consideration:

• Current and prior audit experience;
• Oversight by Federal agencies and pass-through entities; and
• Inherent risk of non-compliance for the Federal program.

The complete single audit guidelines can be found in the Code of Federal Regulations and are available online at https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II.

Guide to Financial Operations

REV. 03/31/2025