A. Audit Requirement

 If you are a non-Federal entity that expended $1,000,000 or more in federal funds (from all sources including pass-through subawards) in your organization’s fiscal year (12-month turnaround reporting period), then you are required to arrange for a single audit, organization-wide, conducted in accordance with the provisions of Title 2 C.F.R. Subpart F (200.500 et seq.).

If you are a non-federal entity that expended less than the applicable audit threshold a year in federal awards, you are exempt from federal audit requirements for that year. However, you must keep records that are available for review or audit by appropriate officials including the federal agency, pass-through entity, and U.S. Government Accountability Office (GAO). Grant oversight continues to remain a key priority for distribution of federal funds.  Simply put, because the threshold for federal auditing requirements has increased OMB has built in the funds for contractual/agency monitoring including both the programmatic side of the grant as well as the fiscal components of the grant (the scope being less than that of a full audit.