For many organizations, the term “Single Audit” is enough to spark anxiety. But if your organization expends (not obligates) $1 million or more in federal funds in a single fiscal year, it’s not just a possibility — it’s a requirement. Understanding the basics of what a Single Audit involves can make the process less intimidating and far more manageable.

At its core, a Single Audit is a comprehensive review conducted by an independent auditor. It doesn’t just focus on your financial statements. It also looks closely at your compliance with federal grant requirements and the internal controls you have in place to safeguard those funds. The purpose is accountability: the federal government wants assurance that the money entrusted to your organization is being spent properly and that your programs are achieving their goals.

The good news is that preparing for a Single Audit doesn’t have to be overwhelming. The key is to think of it as an ongoing process, not a once-a-year scramble. Maintaining organized records throughout the year is the single most effective way to make the audit run smoothly. Conducting your own internal reviews — even informal ones — can help you catch potential issues before the auditor arrives.

It’s also important to use the OMB Compliance Supplement, which outlines the specific criteria and requirements for each federal program included in your audit. Because each program has its own compliance rules, the supplement serves as your roadmap to understanding exactly what auditors will test and how. You can access the most recent version on the Federal Audit Clearinghouse website (fac.gov/compliance)—just be sure to check for the latest edition, as updates are issued annually.

Communication matters too. Ask your auditor what documentation they’ll need and make sure your staff understands their role in the process. Training your team on the basics of Single Audit requirements goes a long way toward avoiding last-minute stress.