Single Audit Findings: The Most Common Issues and How to Resolve Them

Point of View | 8-10 Min Read

To better understand trends in federal award compliance and build awareness around common audit pitfalls, Pierag conducted an in-depth analysis of Uniform Guidance audit data obtained from the Federal Audit Clearinghouse. The goal was to examine the nature and frequency of findings reported across Single Audits, identify the most prevalent issues, and translate that pattern into practical guidance organizations can use to strengthen internal controls and avoid the same findings in their own audits.

What a Single Audit Actually Covers

A Single Audit, governed by the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, commonly known as the Uniform Guidance, is a rigorous, organization-wide audit of any entity that expends federal funds above a set threshold in a fiscal year. That threshold was $750,000 for years, but increased to $1,000,000 effective for fiscal years beginning on or after October 1, 2024, meaning most organizations first applied the new threshold for fiscal years ending September 30, 2025 or later.

Single Audits exist to give the federal government assurance that recipients of federal funds are complying with applicable regulations and using federal dollars properly. The audit is conducted according to standards set by the Office of Management and Budget under Title 2 of the Code of Federal Regulations, Part 200. Auditors assess both financial statements and the organization’s compliance with the specific requirements attached to each federal award, including internal controls and any systemic weaknesses that could affect financial accuracy or program compliance.

The Most Common Categories of Single Audit Findings

Across Uniform Guidance audits, a consistent set of finding categories recurs far more often than any others, regardless of organization type or sector. Understanding these categories in advance is the single most effective way to prevent them.

Internal control deficiencies over federal programs. Auditors frequently find that organizations lack documented, consistently applied internal controls specifically designed for the requirements of individual federal programs, as opposed to general organizational financial controls. A control that works for routine operations does not automatically satisfy the specific documentation and approval requirements a federal award carries.

Procurement and suspension and debarment issues. Procurement remains one of the most common finding areas because it is decentralized, documentation-heavy, and often time-sensitive. Findings typically involve bypassing competitive bidding thresholds, missing documentation of the procurement method used, or failing to verify that vendors and subrecipients are not suspended or debarred from receiving federal funds before an award is made.

Time and effort reporting failures. Labor charged to federal programs must be supported by records that meet the standards in 2 CFR Part 200, and auditors routinely find that time and effort documentation either does not exist, does not reconcile to actual payroll records, or was prepared after the fact rather than contemporaneously.

Unallowable costs charged to federal programs. Costs that do not meet the allowability criteria under the Uniform Guidance, whether due to unclear cost allocation methodology or simple misclassification, remain a recurring finding, particularly for organizations without a clearly documented indirect cost allocation approach.

Subrecipient monitoring gaps. Organizations that pass federal funds through to subrecipients are responsible for monitoring those subrecipients’ compliance, and auditors frequently find this monitoring is inconsistent, undocumented, or entirely absent, especially at organizations managing subrecipient relationships informally rather than through a defined monitoring process.

Late or incomplete reporting to federal agencies. Missed or incomplete financial and performance reporting deadlines to funding agencies are a persistent finding category, often symptomatic of broader gaps in how an organization tracks its federal award obligations across multiple programs and reporting cycles.

Best Practices for Preventing and Resolving Single Audit Findings

Organizations that consistently avoid these findings, or resolve them quickly and durably when they occur, tend to follow a common set of practices:

Build program-specific internal controls, not just general financial controls, and document them clearly enough that a new team member could follow them without institutional knowledge
Maintain a live procurement checklist tied to current competitive bidding and suspension and debarment verification requirements, reviewed whenever thresholds or requirements change
Implement contemporaneous time and effort tracking rather than reconstructing labor allocation after the fact, and reconcile it against payroll records on a regular cycle, not just at audit time
Document your indirect cost allocation methodology clearly, whether using a negotiated rate or the de minimis rate, so costs charged to federal programs can be traced and justified without ambiguity
Formalize subrecipient monitoring with a defined process, including risk assessment of each subrecipient, rather than an ad hoc approach that varies by relationship
Track federal award reporting deadlines centrally across all active awards, since reporting failures often stem from decentralized tracking rather than any single missed deadline in isolation
Address prior-year findings directly and visibly in your corrective action plan, since auditors specifically test whether previously identified findings have actually been resolved, not just acknowledged

Why Resolution Speed and Quality Matter Beyond the Audit Itself

A finding that recurs year over year signals something more concerning to funders and oversight agencies than the underlying issue itself: it suggests the organization’s corrective action process is not functioning. Organizations that treat findings as a genuine opportunity to strengthen controls, documented with a clear timeline and assigned ownership, consistently see findings resolved and stay resolved. Organizations that treat corrective action plans as a compliance formality tend to see the same finding categories resurface in subsequent audit cycles.

Frequently Asked Questions

What is the current federal Single Audit threshold? The Single Audit threshold is $1,000,000 in federal awards expended during a fiscal year, effective for fiscal years beginning on or after October 1, 2024. It was previously $750,000.

What are the most common Single Audit findings? The most common finding categories include internal control deficiencies over federal programs, procurement and suspension and debarment issues, time and effort reporting failures, unallowable costs, subrecipient monitoring gaps, and late or incomplete reporting to federal agencies.

Why is procurement one of the most common Single Audit finding areas? Procurement processes are typically decentralized across an organization and heavily documentation-dependent, which makes gaps in competitive bidding evidence or suspension and debarment verification easy to miss without a formal, consistently applied checklist.

What should an organization do if it receives a Single Audit finding? Organizations should develop a corrective action plan with a clear timeline and assigned ownership, address the root cause rather than just the specific instance identified, and be prepared to demonstrate resolution in the following year’s audit, since auditors specifically test whether prior findings have actually been resolved.

Does a Single Audit finding mean an organization misused federal funds? Not necessarily. A finding indicates a control deficiency or compliance gap identified during testing. It does not automatically mean funds were misused, though unresolved or recurring findings can escalate scrutiny from funding agencies over time.

Who should read this analysis of Single Audit findings? CFOs, controllers, grants managers, and compliance officers at organizations receiving federal awards, particularly those approaching or recently crossing the $1 million Single Audit threshold for the first time.

Talk to Our Team

Preparing for your next Single Audit or working through a corrective action plan for prior findings? Pierag’s Assurance practice helps organizations build the internal controls and documentation practices that prevent recurring Single Audit findings. Talk to our team about your federal award compliance readiness.