Uniform Guidance 2024 Revisions: The $1,000,000 Single Audit Threshold and What Else Changed

OMB published the first major rewrite of the Uniform Guidance in a decade on April 22, 2024. The revised 2 CFR Part 200 took effect on October 1, 2024. For a CPA firm, the headline is the single audit trigger: $1,000,000 in federal awards expended, up from $750,000. This post covers what the text says today, which engagements it applies to, and the other changes that land in the same audit file.

For the full engagement flow, see the single audit walk-through. For the schedule that proves the threshold, see the SEFA guide.

The threshold in 2 CFR 200.501

The current text of 2 CFR 200.501(a) reads: a non-Federal entity that expends $1,000,000 or more during its fiscal year in Federal awards must have a single or program-specific audit conducted for that year. The prior figure was $750,000.

Three points matter in practice:

• The test counts expenditures of federal awards in the fiscal year, not awards received or awards granted. The SEFA is the measuring tool.
• The test is per fiscal year. An entity at $1,100,000 in one year and $900,000 the next needs a single audit for the first year only.
• An entity below $1,000,000 has no Subpart F audit requirement for that year. The engagement letter records the expenditure calculation that supports that conclusion.

Which fiscal years use $1,000,000

The Subpart F audit revisions, including the $1,000,000 threshold, apply to auditee fiscal years beginning on or after October 1, 2024 (see the Thompson Grants and Plante Moran summaries in Sources). The rest of the revised guidance took effect October 1, 2024 for new federal awards. Agencies may elect to apply it to awards issued earlier, but are not required to.

That produces a clean rule for planning:

A fiscal year that begins on October 1, 2024 and ends September 30, 2025 is the first year at $1,000,000. A calendar-year entity reaches it with the year beginning January 1, 2025. A calendar-year 2024 audit stays at $750,000 because that year began before the cutoff. The year-begin date controls, not the year-end date.

The same dollar change flows into the program-level sizing. Under 2 CFR 200.518, the Type A threshold for an auditee with total federal awards expended from $1,000,000 up to $34 million is $1,000,000. The major program mechanics are in the major program determination post.

The de minimis indirect cost rate: 15%

Under 2 CFR 200.414(f), a recipient or subrecipient without a current negotiated indirect cost rate, including a provisional rate, elects a de minimis rate of up to 15 percent of modified total direct costs (MTDC). The prior ceiling was 10 percent.

Rules the auditor tests:

• The rate is a ceiling. The entity elects a rate at or below 15 percent and applies it consistently.
• The rate needs no documentation to justify its use and has no time limit.
• Costs are charged either direct or indirect, never both. An auditor testing indirect cost allowability checks that a cost class charged as indirect is absent from direct charges.
• The base is MTDC, not total direct costs. The MTDC calculation is where the next change sits.

The $50,000 subaward base in MTDC

MTDC includes subawards only up to the first $50,000 of each subaward. The prior figure was $25,000. A subrecipient with a $400,000 subaward contributes $50,000 to the base, not $25,000, so indirect cost recovery on pass-through awards rises.

Audit procedure: recompute the MTDC base from the general ledger by award. Confirm that each subaward is capped at $50,000, that equipment and capital expenditures are excluded, and that the rate times the base ties to the indirect cost charged.

Equipment: $10,000 per unit

The definition of equipment in 2 CFR 200.1 sets the federal per-unit floor at $10,000, up from $5,000. The definition uses the lesser of the entity's own capitalization level and $10,000.

Equipment is excluded from MTDC, so this change moves costs in and out of the indirect base. An item that falls below the new $10,000 floor and below the entity's own capitalization level is a supply and sits in MTDC.

Other revisions that touch the audit file

• Fixed amount subawards. The revised guidance lets a pass-through entity issue fixed amount subawards up to $500,000 with prior written approval from the federal agency (2 CFR 200.333).
• Questioned costs. The 2 CFR 200.1 definition covers amounts that are noncompliant or suspected noncompliant with federal statutes, regulations or award terms, amounts without adequate documentation at the time of the audit, and amounts that appear unreasonable compared with what a prudent person would incur. Internal control deficiencies alone do not create a questioned cost. The finding dollar line sits at $25,000 for known or likely questioned costs on a major program under 2 CFR 200.516(a).
• Compliance Supplement. The auditor works from the Compliance Supplement for the period under audit. Match the supplement edition to the fiscal year, because the supplement is the document that carries the testing procedures.

Engagement checklist for the first $1,000,000 year

1. Record the fiscal year-begin date in the planning memo and cite the applicable threshold.
2. Rebuild the SEFA from the ledger. A client that fell below $1,000,000 and drops out of Subpart F still needs a documented expenditure calculation.
3. Re-run Type A sizing with the 200.518 table. An auditee under $34 million has a $1,000,000 Type A threshold.
4. Test the indirect cost rate: de minimis election, 15 percent cap, MTDC build with the $50,000 subaward cap.
5. Test equipment additions against the award year and the $10,000 level.
6. Update the engagement letter language on Subpart F to the $1,000,000 text.

Sources

• 2 CFR 200.501 Audit requirements, eCFR
• 2 CFR 200.414 Indirect costs, eCFR
• 2 CFR 200.333 Fixed amount subawards, eCFR
• 2 CFR 200.1 Definitions, eCFR
• 2 CFR 200.518 Major program determination, eCFR
• 2 CFR 200.516 Audit findings, eCFR
• Guidance for Federal Financial Assistance, Federal Register, April 22, 2024
• Pay Attention to the Specific Timeline for the Subpart F Revisions, Thompson Grants
• Uniform Grant Guidance Updates for 2026, Plante Moran
• Prepare for Significant Changes to OMB's Uniform Guidance, CLA

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