What to know about upcoming Single Audit changes

By Miranda Wendlandt, CPA, CFE

SUMMARY

Upcoming changes to AICPA guidance and federal compliance requirements could affect how Single Audits are performed in 2026 and beyond. This primarily involves an additional focus on documentation, internal controls, and grant oversight. Local governments and nonprofits that receive federal funding can prepare for these changes by understanding the new requirements, reviewing their internal controls, and ensuring appropriate documentation is in place. See Frequently Asked Questions. →

---

 

Generally, non-federal organizations that expend $1 million or more in federal funding during their fiscal year must undergo a Single Audit. There are two significant developments these organizations should be watching: an update to the American Institute of Certified Professional Accountant’s (AICPA’s) Audit Guide, Government Auditing Standards and Single Audits, and proposed changes to the federal Uniform Guidance, which governs federal grant administration and compliance requirements.

Staying ahead of these changes can help you avoid noncompliance and achieve a smooth Single Audit process. As you prepare for your upcoming Single Audit, here’s what you should know.

Update to the AICPA Audit Guide

One thing on our minds as we prepare for this year’s Single Audits is the upcoming change to the AICPA’s Audit Guide, Government Auditing Standards and Single Audits. This change will primarily affect how auditors plan and perform Single Audits rather than the underlying compliance requirements.

The guide’s 2026 edition is expected to incorporate the revised Single Audit guidance currently presented in Appendix B of the 2025 guide. This guidance will go into effect when AICPA issues the guide, which could be as early as September or October 2026.

Although many of the underlying audit concepts are not new, the revised guide will provide a more structured and detailed framework for how auditors apply them. As a result, you may notice more detailed inquiries and documentation requests from your auditors in several areas.

• More structured risk assessment. The revised guidance will provide a more detailed framework for identifying and assessing risks of material noncompliance. This may lead to more focused auditor inquiries in areas such as allowable costs, reporting, cash management, eligibility, procurement, and subrecipient monitoring.
• Greater focus on internal controls and documentation. Auditors will focus on identifying key controls over compliance, evaluating whether they are properly designed and implemented. Auditors will also determine whether these controls operated consistently throughout the audit period. Organizations should be prepared to provide evidence of reviews, approvals, reconciliations, monitoring activities, and other key controls.
  • Steps to take now: Consider reviewing your grant-related internal controls and ensuring key compliance activities are consistently documented. Strong documentation of reviews, approvals, reconciliations, and monitoring activities can help demonstrate controls are operating effectively and support a smoother audit process.
• More attention to audit populations. Auditors may place greater emphasis on the completeness and accuracy of populations used for compliance and control testing.
  • Steps to take now: Be prepared to explain how procurement, payroll, reimbursement, subrecipient, and other populations were compiled and reconciled to supporting records.

Proposed changes to Uniform Guidance for Federal Awards

Separate from the AICPA guidance update, the Office of Management and Budget (OMB) published a proposed rule in May 2026 that would substantially revise 2 CFR Part 200, commonly known as the Uniform Guidance. These regulations establish the administrative, cost, and audit requirements for federal awards. Proposed changes include:

• Expanded payment controls. The proposal would add requirements affecting payment requests and eligibility verification.
• Stronger subaward reporting and oversight. Recipients and pass-through entities could face additional reporting, classification, and monitoring responsibilities.
• Elimination of fixed-amount awards and subawards. The proposal would generally remove these award types and increase reliance on actual-cost documentation.
• Broader termination and suspension provisions. Federal agencies and pass-through entities would receive expanded authority, when permitted by law, to suspend or terminate certain awards.
• Transition from guidance to regulation. OMB proposes replacing the current Uniform Guidance structure with a government-wide Uniform Grants Regulation.

The Continuing Appropriations and Extensions Act, 2027, signed into law on September 2, 2026, includes a provision that pauses OMB’s Uniform Guidance rulemaking through December 11, 2026. As a result, the proposed revisions cannot be finalized or take effect during that period.

Steps to take now: Because the rule remains proposed and implementation has been delayed through at least December 11, 2026, the best course of action is to continue following the current Uniform Guidance, applicable award terms, and Compliance Supplement while monitoring future development.

Prepare for a successful 2026 Single Audit

Although the audit methodology and regulatory environment are changing, the fundamentals of strong federal grant administration remain the same. As always, it’s important that your organization maintains clear policies, documents key controls, reconciles testing populations to supporting records, and retains evidence that required reviews and monitoring activities took place.

Understanding what your organization’s next Single Audit process will entail and what you need to provide can reduce the time—and stress—you expend on it. If you have questions about these upcoming changes, we’re here to help.

Our Single Audit professionals can assist with recommendations, suggest best practices, provide templates, and even walk you through an appropriate internal control structure.

To learn more about how we empower local governments and nonprofits, contact us today.