Government Advisory Insights
Single Audits and the 2024-2025 Uniform Guidance Overhaul
If your local government or school district spends federal dollars, you operate under the Uniform Guidance, Title 2 of the Code of Federal Regulations, Part 200. In April 2024, the Office of Management and Budget (OMB) issued its most significant revisions to this guidance in years, and Ohio's Auditor of State followed with Bulletin 2024-006 to spell out what changed. The headline: the single audit threshold rose to $1,000,000, and new documentation, cybersecurity, and disclosure requirements now apply. Here is what entities required to perform a single audit need to know.
What is the Uniform Guidance, and who needs a single audit?
The Uniform Guidance (2 CFR Part 200) establishes uniform administrative requirements, cost principles, and audit requirements for federal awards. A single audit is now required when an entity expends $1,000,000 or more in federal awards in a single fiscal year, up from the long-standing $750,000 threshold. This increase is effective for audits of entities with a fiscal year-end of September 30, 2025 and later.
Entities that meet the threshold must present a Schedule of Expenditures of Federal Awards (SEFA) in their audit report. The SEFA is a supplemental schedule that lists federal expenditures by awarding agency and Assistance Listing Number (ALN), includes amounts passed down to subrecipients, and is accompanied by required notes.
The core compliance principles
Every entity administering federal awards must adopt written policies and maintain effective internal controls across five key areas:
- Allowable costs: costs must be necessary, reasonable, and permitted under the award.
- Time and effort: payroll charged to awards must be supported by documentation of actual effort.
- Procurement: purchasing must be competitive, documented, and free of conflicts of interest.
- Cash management: minimize the time between drawing federal funds and disbursing them.
- Subrecipient monitoring: oversee any funds you pass through to subrecipients.
Under the 2024 revisions, recipients and subrecipients must now document their internal controls over federal awards (2 CFR 200.303(a)), take reasonable cybersecurity measures to safeguard information, including protected personal information (PII) (2 CFR 200.303(e)), provide employees written notice of whistleblower rights (2 CFR 200.217), and promptly disclose credible evidence of fraud, conflict of interest, bribery, or gratuity violations (2 CFR 200.113).
What changed: the 2024-2025 updates at a glance
The revisions raised several dollar thresholds. The most important changes for entities subject to a single audit are:
| Provision | Before | After | Citation |
|---|---|---|---|
| Single audit threshold | $750,000 | $1,000,000 | 2 CFR 200.501 |
| Type A program threshold | $750,000 | $1,000,000 | 2 CFR 200.518(b)(1) |
| Equipment threshold | $5,000 | Lesser of your capitalization level or $10,000 | 2 CFR 200.1 |
| De minimis indirect cost rate | 10% | 15% of modified total direct costs | 2 CFR 200.414(f) |
| MTDC subaward inclusion | First $25,000 | First $50,000 of each subaward | 2 CFR 200.1 |
Beyond the dollar figures, the 2024 revisions rewrote much of the guidance in plain language and made several terminology and policy changes:
- "Non-Federal entity" is now "recipient" and/or "subrecipient" (except in Subpart F, Audit Requirements); "grants and agreements" became "Federal financial assistance."
- "Small purchases" were renamed "simplified acquisitions" (2 CFR 200.320).
- The Modified Total Direct Cost base now includes the first $50,000 of each subaward, up from $25,000 (2 CFR 200.1).
- For sealed bids, entities must document and provide a justification for every rejected bid (2 CFR 200.320(b)(1)).
- The prohibition on local governments using geographical preferences in evaluating bids was removed (2 CFR 200.319(c)).
Effective dates: read the fine print
The changes phase in on two tracks. The single audit and Type A threshold increases apply to audits of entities with a fiscal year-end of September 30, 2025 and later. Most other changes took effect October 1, 2024, though certain state-administered formula and carryover grants could adopt them as early as July 1, 2024.
Key dates: The higher $1,000,000 single audit threshold applies to fiscal years ending September 30, 2025 and later. Most other 2024 revisions took effect October 1, 2024.
What to do now
- Update your written policies and procedures to reflect the new thresholds and requirements.
- Document your internal controls over federal awards. This is no longer optional.
- Add or confirm written whistleblower notices and reasonable cybersecurity safeguards.
- Align your capitalization threshold if you want to use the $10,000 equipment threshold.
- Track which Uniform Guidance version governs each grant, and keep that documentation audit-ready.
- Build your SEFA methodically: start with the prior-year SEFA, map current-year grant activity, and confirm each grantor and ALN through SAM.gov, USASpending.gov, and the Ohio Checkbook.
Have questions about how these changes affect your entity?
The 2024-2025 Uniform Guidance revisions touch nearly every part of federal award administration, from your single audit threshold and SEFA to your written policies, internal controls, and procurement procedures. J&G can help you interpret the new requirements, update your policies, and prepare for a smooth single audit. If you'd like to talk it through, reach out to Amanda Copeland and our advisory team. You can reach Amanda directly at acopeland@jg.cpa. We're always glad to help.