Key Takeaways
- The single audit threshold increased from $750,000 to $1,000,000, effective for fiscal years beginning on or after October 1, 2024.
- A single audit combines a financial statement audit with a compliance examination of federal program expenditures — HRSA Section 330, Medicaid PPS, and 340B for most FQHCs.
- Reporting packages must reach the Federal Audit Clearinghouse within 30 days of the auditor’s report or nine months after fiscal year-end, whichever comes first.
- The audit is required every year federal expenditures meet or exceed the threshold.
- Common findings include internal control deficiencies, allowable cost violations, and procurement non-compliance — repeat findings can affect future award decisions.
Whether you run or are on the board of a Federally Qualified Health Center (FQHC), you know that a single audit comes with the territory of receiving federal funds.
But that audit is often much more complex for organizations like yours than you may initially realize.
And that’s because your not-for-profit operates at the convergence of HRSA, Medicaid, Medicare, and, frequently, supplemental federal grants.
Each program brings its own compliance requirements, cost principles, and reporting expectations. A single audit examines all of it, simultaneously.
For CFOs and finance directors managing this process, the complexity is the context, and understanding exactly what the Uniform Guidance requires of your organization is where true preparation and strategy begin.
What Is a Single Audit for an FQHC?
A single audit is a combined audit of an organization’s financial statements and its federal award expenditures.
Single Audits are conducted under Generally Accepted Government Auditing Standards (GAGAS) and the requirements of 2 CFR Part 200, commonly known as the Uniform Guidance.
The goal is to provide a standardized, uniform approach to oversight for all non-federal entities receiving federal funds.
A single audit is not a standard financial statement audit, and the distinction matters.
In addition to the financial component, an examination of whether your organization’s statements are presented fairly, there’s also a compliance component.
This piece examines whether federal award funds were spent in accordance with the specific terms, conditions, and statutory requirements attached to each program.
For FQHCs, that means auditors are evaluating compliance across your:
- HRSA Section 330 grant
- Medicaid Prospective Payment System (PPS) reimbursements, and potentially 340B Drug Pricing Program participation
- National Health Service Corps funding
- Any supplemental grants
So, if your FQHC receives and spends federal money, a single audit is almost certainly part of your compliance picture.
Does Your FQHC Qualify Under Single Audit Thresholds?
The most significant recent change to single audit requirements came in April 2024, when the Office of Management and Budget (OMB) issued a substantial revision to the Uniform Guidance.
Among the key updates was that the single audit threshold increased from $750,000 to $1,000,000, effective for fiscal years beginning on or after October 1, 2024, so the new threshold applies to fiscal years ending on or after September 30, 2025.
For individual FQHCs operating as Section 330 grantees, annual federal expenditures routinely run into the millions.
How much you expend within a single fiscal year matters greatly. You have to count all direct federal awards, pass-through funding received from state agencies or other entities, and federal program reimbursements that meet the definition of federal financial assistance.
To help keep track, your finance team should maintain a running federal expenditure ledger by Assistance Listing Number (ALN, formerly CFDA number) throughout the year, not just at year-end.
You are required to undergo a single audit every year in which your total federal expenditures meet or exceed the threshold. There is no multi-year exception or grace period for organizations that have previously complied.
When Is a Single Audit Due?
This is one of the most frequently misunderstood aspects of single audit compliance, and the consequences of missing the deadline are real.
Under 2 CFR §200.512, you must submit a completed single audit reporting package to the Federal Audit Clearinghouse (FAC) no later than the earlier of two dates:
- 30 days after the auditor’s report is issued
- Nine months after the close of the organization’s fiscal year
For an FQHC operating on a December 31 fiscal year end, that means the submission deadline is September 30 of the following year at the latest, assuming the audit is completed before the 30-day trigger applies first.
For centers on a June 30 fiscal year end, the outside deadline is March 31.
Late submission is a compliance finding in itself and can draw additional scrutiny from your federal cognizant agency. For most FQHCs, that is HHS. Per HHS OIG guidance, the cognizant or oversight agency may authorize individual deadline extensions when the nine-month window would impose undue burden, but you must request these extensions proactively.
Given this information, it’s important for FQHC leadership to begin planning for your audit engagement well before the fiscal year-end to ensure the timeline is achievable.
What An FQHC Single Audit Report Includes
Understanding what goes into the single audit report package prepares your leadership team to review findings intelligently and respond to federal agency inquiries with precision.
A complete single audit reporting package under the Uniform Guidance consists of several interconnected components.
Schedule of Expenditures of Federal Awards (SEFA)
The Schedule of Expenditures of Federal Awards (SEFA) is the foundational document, listing every federal award expended during the fiscal year by ALN number, federal agency, and program name.
For FQHCs, the SEFA can be substantial: Section 330 awards, Medicaid and Medicare program activity, 340B-related grants, and any workforce or capital grants must all be reflected accurately. Errors or omissions in the SEFA are among the most common single audit findings.
Financial and Compliance Reporting
The auditor produces multiple reports: an opinion on the financial statements, a report on internal controls over financial reporting, a report on compliance with laws and regulations, and an opinion on compliance for each major federal program.
The auditor also prepares a Schedule of Findings and Questioned Costs, which documents any deficiencies, material weaknesses, or compliance violations identified during the audit. Questioned costs are expenditures the auditor believes may not be allowable under the terms of the federal award.
Data Collection
Finally, the Data Collection Form (the SF-SAC) summarizes audit results in a standardized format for federal agency use. This form, submitted alongside the reporting package to the FAC, is how federal agencies track findings across their grantee populations and flag organizations for follow-up.
For FQHCs with repeat findings or significant questioned costs, the SF-SAC submission can trigger a programmatic review or corrective action requirement from HRSA or HHS.
Common Single Audit Findings at FQHCs
With so many moving pieces—clinical operations, multi-payer billing, federal grant management, and community health obligations—FQHCs face structural complexity that can result in single audit red flags.
These are the most common vulnerabilities we see in these organizations.
Weak Internal Controls
Internal control deficiencies are the most prevalent finding category in single audits across the health center sector. These range from inadequate segregation of duties (particularly common in smaller FQHCs with lean administrative teams) to gaps in documentation supporting federal expenditures. When a center cannot produce adequate support for a cost charged to a federal program, that cost becomes a questioned cost on the Schedule of Findings.
Allowable Cost Violations
Federal programs define allowable costs through the terms of the award, the Uniform Guidance cost principles at 2 CFR Part 200 Subpart E, and program-specific requirements.
FQHCs that allocate shared costs across programs, such as clinical staff salaries, facilities expenses, and administrative overhead, must maintain cost allocation methodologies that are reasonable, consistently applied, and well-documented.
Procurement Compliance
Federal awards require specific procurement procedures for contracts and purchases above established thresholds, and informal or undocumented procurement processes generate findings.
Reporting issues
Reporting non-compliance, including late or inaccurate federal financial reports, also appears with regularity. For FQHC boards, audit findings are not abstract. A material weakness or significant deficiency reported on the SF-SAC becomes visible to HRSA and HHS, and repeat findings can affect future award decisions.
How Your FQHC Can Prepare for a Single Audit Year-Round
The most effective single audit outcomes are not the result of what happens in the weeks before an auditor arrives. They are the product of financial management discipline applied consistently across the entire fiscal year. For FQHC CFOs and finance directors, that means treating federal award compliance as an operational function, not a seasonal one.
Keep Strong Inventory Practices
The foundation is a current, accurate federal awards inventory. Every active award should be documented with its ALN number, award period, total award amount, cumulative expenditures to date, and applicable compliance requirements. This inventory drives the SEFA, informs major program determination, and gives your auditor a structured starting point.
Aim to update it quarterly rather than waiting until year-end to remove a significant source of audit preparation stress and error.
Meaningfully Engage Your Board
Board engagement is equally important. You have to establish and maintain internal controls that provide reasonable assurance of compliance with federal statutes, regulations, and award terms.
Boards that receive regular updates on federal award activity, compliance risk, and audit status are better positioned to fulfill their oversight obligations and respond to findings constructively.
Choose The Right Audit Firm
Selecting an audit firm with specific FQHC experience is a material factor in audit quality. FQHCs operate under a compliance framework, and an auditor who understands how these programs interact brings value that extends well beyond the audit opinion.
Rea’s Not-for-Profit team works directly with FQHCs across Ohio and the Midwest, bringing specialized knowledge of HRSA compliance, federal award management, and the operational realities of community health center finance.
Get Your FQHC Ready for Single Audit Season
A single audit is more than a compliance requirement; it is a signal to HRSA, HHS, and your community that your organization manages federal resources with integrity.
Whether you are preparing for your first single audit or looking to address recurring findings, the time to act is before your fiscal year closes.
Rea’s not-for-profit audit and assurance professionals understand the compliance demands that FQHCs navigate every day. Connect with our team to discuss your single audit readiness, federal award management, or audit engagement needs.
Let’s build a path to a cleaner audit together.
Contact Rea’s Not-for-Profit Team
About the Author
Evan Hamm is a Senior Associate at Rea, based in the Columbus, Ohio area. Evan works alongside nonprofit organizations navigating the financial reporting and federal compliance requirements that come with receiving federal awards. He brings a practical, detail-oriented approach to helping FQHC finance teams build the internal controls and documentation practices that support clean, confident audits.
Questions about your organization’s single audit obligations? Contact Evan or the Rea team.
