Hi,
Most finance officers assume that if something were wrong with their audit, someone would call. Usually nobody does. The consequence arrives on its own schedule, attached to next year’s funding.
If your entity spent $1,000,000 or more in federal awards in a fiscal year, you owe a Single Audit, and it’s due nine months after your fiscal year end, submitted to the Federal Audit Clearinghouse. That threshold moved recently. Entities that sat comfortably under the old $750,000 line for years are now making the opposite mistake: assuming the increase let them off, when one ARPA drawdown or a single capital grant puts them back over it.
What makes this dangerous is that the clock runs whether or not anyone notices. There is no notice, no reminder, and no grace period. A late or missing submission is visible on a public database, and it follows you:
- Your entity can be designated a high-risk grantee, which attaches conditions to every future award
- Pass-through agencies can withhold or suspend reimbursements until the audit lands
- Bond covenants frequently require audited statements within a set window, and missing it can be a technical default
- Rating agencies read late filings as a control weakness, which shows up in your borrowing cost
- Repeat findings compound: the second year of the same material weakness is treated very differently from the first
And the expenditure total is measured differently than most people expect. It counts federal awards expended, not received, including pass-through money from the state, loan proceeds still outstanding, and the value of donated equipment. Entities that have never needed a Single Audit cross the line without ever seeing a federal grant agreement.
Most of it is preventable with a few habits: track federal expenditures by ALN as they happen rather than reconstructing the SEFA at year end, know your fiscal-year-end deadline the day the year closes, keep procurement documentation contemporaneous, and close out prior-year findings before the next audit starts.
That is why it helps to have all of it handled by one team:
- Single Audits under Uniform Guidance, and Yellow Book (GAGAS) engagements
- Financial statement audits, reviews, and agreed-upon procedures
- ACFR and AFR preparation, and GASB implementation for leases, SBITAs, OPEB and pensions
- Fund accounting bookkeeping, budget-to-actual and board or council ready reporting
- Grant and subrecipient monitoring, procurement policy review, and SEFA preparation
Reply to this email by Friday and we will set up a free 15-minute call with one of our senior government specialists. Tell us your fiscal year end and roughly what you spent in federal awards last year, and we will tell you on the call whether a Single Audit is triggered and exactly when yours is due. Sincerely,
—
George Dimov, CPA
Licensed and Insured
(833) 829-1120 toll free
(212) 994-8081 Fax
www.dimovtax.com