Single Audit Changes: Key Updates Effective October 1

Single Audit Changes: Key Updates Effective October 1

September 30, 2024

The federal single audit requirements are undergoing significant changes, with the key updates taking effect on October 1, 2024. Here are the main changes:

Increased Single Audit Threshold

The threshold triggering the requirement for a Single Audit is increasing from $750,000 to $1,000,000. This means that only entities that annually expend $1 million or more of federal funds in their fiscal year will be subject to a Single Audit when this change goes into effect.

Changes Affecting Non-Federal Entities

1. Internal Controls: Recipients and sub-recipients are now required to include cybersecurity and other measures to safeguard information in their internal controls.
2. Indirect Costs: The de minimis rate for indirect costs has been raised from 10% to 15% of modified total direct costs.

Changes Affecting Auditors

1. Major Program Determination: The threshold for determining Type A programs has increased to $1 million if the total annual expenditures of all federal programs for a non-federal entity are $34 million or less (previously $25 million or less).
2. Terminology: The term "non-federal entity" has been replaced with either "recipient" and/or "subrecipient" throughout many sections of 2 CFR 200.

Effective Date

These changes will become effective on October 1, 2024. Federal agencies may elect to apply the guidance to federal awards issued prior to that date, but they are not required to do so. Organizations subject to a Single Audit should review these changes and revise their policies, procedures, and internal controls accordingly to ensure compliance with the new requirements.

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