Home / Resources / What triggers a single audit?
Updated August 2026
One number decides it, and a surprising amount of confusion surrounds what counts toward it.
2 CFR 200.501 states: “A non-Federal entity that expends $1,000,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year.”
The trigger is what you spent in your fiscal year, not what you were awarded. A three-year $2.4M grant doesn't trigger anything on day one; the year you spend $1,000,000 or more of federal money is the year it applies.
This cuts both ways. A slow-spending year may stay under. A year where two grants overlap and you spend heavily may cross it unexpectedly — which is why the total is worth tracking through the year rather than discovering in month eleven.
The most common surprise. Federal funds reaching you through a state agency, a city, a county or a larger nonprofit are still federal awards, and they count toward your total.
An organization with no direct federal grants can still cross the threshold entirely on subawards. If you aren't sure whether a grant is federal in origin, ask the entity that gave it to you — they are obliged to tell you.
Money that isn't a federal award doesn't count — individual donations, most foundation grants, corporate giving, program fees, and state or local funds that didn't originate federally. The test is the original source, not who handed you the cheque.
It is broader than a standard financial statement audit. Alongside your financials, the auditor examines compliance with the requirements attached to your major federal programs — eligibility, allowable costs, reporting, procurement, and how you documented payroll charged to those programs.
It costs more than a regular audit and takes longer. If you expect to cross the threshold, budget for it early; auditors with single audit experience book up.
This is general information, not legal or accounting advice. Federal grant rules change and are applied differently by different agencies and auditors. Check with your auditor, your grant officer, or an attorney before relying on any of it.
The Ember tool for thisEmber Staff logs staff time, splits it across grants and programs by actual effort, routes it for supervisor certification, and produces an audit-ready time-and-effort report — with unlimited users on every plan.
2 CFR 200.501 requires a single or program-specific audit when an entity expends $1,000,000 or more in federal awards during its fiscal year.
Yes. Federal money received through a state agency, city or larger nonprofit is still a federal award and counts toward your total.
Spent. The trigger is federal awards expended during your fiscal year, not the size of the award.
No, unless the foundation is passing through federal money. Private philanthropy is not a federal award.
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Sources: 2 CFR Part 200 (eCFR) — §200.501, audit requirements. Threshold quoted verbatim and verified 17 August 2026. Thresholds change — check the source.