Single Audit Preparation Guide & Timeline

Why Preparation Starts 12 Months Out

The most common mistake organizations make with single audits is treating preparation as a post-year-end activity. By the time your fiscal year closes, the documentation should already be organized, internal controls should already be documented and tested, and your audit firm should already be under engagement. Organizations that wait until after year end to begin preparation consistently experience delayed audits, higher fees (auditors charge premium rates for compressed timelines), and more findings — because gaps discovered after year end cannot be corrected retroactively.

The timeline below assumes a fiscal year end of June 30 or December 31, but the relative timing applies regardless of your fiscal year. Adjust the months to match your organization's calendar.

12-Month Preparation Timeline

12–10 Months Before Year End: Engage Your Auditor

If you do not already have an audit firm under contract, this is when you should issue a Request for Proposals (RFP) or directly engage a qualified firm. Qualified government audit firms book up quickly — waiting until after year end to begin the search can result in limited options and premium pricing. If you have an existing auditor, confirm the engagement for the upcoming year and schedule a planning meeting.

During the planning meeting, discuss:

• Any new federal programs your organization began receiving during the year
• Significant changes in expenditure levels that may affect major program determination
• Changes in organizational structure, key personnel, or accounting systems
• Prior-year findings that remain open and your progress on corrective action plans
• Preliminary audit timeline, interim fieldwork dates, and final fieldwork dates

9–7 Months Before Year End: Internal Controls Review

This phase is about making sure your house is in order before the auditor arrives. Walk through each compliance requirement that applies to your major federal programs and verify that you have documented policies and procedures in place. The most critical areas to review:

• Written policies. Do you have written, board-approved policies for procurement, travel, time and effort reporting, cash management, equipment management, and cost allocation? Auditors will request these documents. If they do not exist or are outdated, now is the time to create or update them.
• Segregation of duties. Review your financial processes for adequate segregation. Can the same person initiate a purchase, approve it, and record it? Are bank reconciliations performed by someone independent of cash handling? Document the segregation controls and address any gaps.
• Grant files. Each federal award should have a complete file containing the notice of award, approved budget, any budget modifications, special conditions, correspondence with the federal agency, and sub-award agreements (if applicable). Missing award documentation is one of the most common sources of audit delay.
• Time and effort documentation. If employees work on multiple federal programs or split time between federal and non-federal activities, you must have a system for documenting the allocation of their time. Under 2 CFR 200.430, charges for salaries and wages must be based on records that accurately reflect the work performed. Verify that your time and effort system is functioning properly and that certifications are current.

6–4 Months Before Year End: Interim Fieldwork

Many audit firms conduct interim fieldwork 3–6 months before year end. During interim fieldwork, the auditor will typically test internal controls, perform preliminary compliance testing, and identify any issues early enough for you to correct them before year end. This is enormously valuable — a control deficiency identified during interim work can be remediated before it becomes a finding in the final audit report.

Prepare for interim fieldwork by having the following ready:

• Year-to-date general ledger and trial balance
• Bank statements and reconciliations through the most recent month
• All written financial and compliance policies
• Board meeting minutes through the most recent meeting
• Sample procurement files (purchase orders, bids, contracts)
• Payroll records and time/effort certifications

3–1 Months Before Year End: Pre-Close Procedures

As you approach year end, focus on closing loose ends that could create audit issues:

• Reconcile federal drawdowns. Compare the amounts drawn from each federal payment system (PMS, ASAP, state portals) to the expenditures recorded in your general ledger. Discrepancies between drawdowns and expenditures are a frequent source of cash management findings.
• Review sub-recipient files. If your organization passes federal funds through to sub-recipients, verify that every sub-award agreement includes the required information per 2 CFR 200.332 (CFDA number, federal award identification, compliance requirements). Confirm that you have conducted monitoring activities and documented the results.
• Begin the SEFA draft. Start compiling your Schedule of Expenditures of Federal Awards. Identify every federal program from which you expended funds, the Assistance Listing Number (ALN), the federal awarding agency, the pass-through entity (if applicable), and the total expenditures. Reconcile SEFA totals to the general ledger.
• Verify reporting compliance. Confirm that all required federal reports (SF-425 financial reports, progress reports, program-specific reports) have been filed on time. Late or missing reports are a testable compliance requirement and will be identified during the audit.

Month 1–3 After Year End: Year-End Close and Final Fieldwork

Close your books as quickly as possible after year end. The faster you produce final financial statements and a completed SEFA, the sooner your auditor can begin final fieldwork. Target completing your year-end close within 60 days of year end. During final fieldwork, the auditor will perform substantive testing on year-end balances, complete compliance testing for major programs, and finalize the schedule of findings.

Month 4–6 After Year End: Draft Reports and Management Review

The auditor will provide draft reports for your review. This is your opportunity to review findings for factual accuracy, provide additional context or documentation that may resolve an issue, and prepare your management responses and corrective action plans. Do not rush this phase — the management response is your organization's official position on each finding and will be read by federal agencies.

Month 7–9 After Year End: Finalization and FAC Submission

Finalize the audit reports, complete the SF-SAC Data Collection Form, and submit the reporting package to the Federal Audit Clearinghouse. Both the auditee and auditor must certify the submission. The deadline is 9 months after your fiscal year end — or 30 days after you receive the auditor's reports, whichever is earlier. Distribute the audit report to your board of directors, relevant federal agencies, and pass-through entities as required.

Selecting an Audit Firm

The quality of your single audit is directly tied to the competency of your audit firm. A firm that lacks experience with government auditing standards or your specific federal programs can produce a substandard audit — one that either misses real findings (exposing your organization to future risk) or generates false findings (wasting your time and resources on corrective actions for issues that do not actually exist). When evaluating prospective firms, assess the following:

Auditor rotation is not required under 2 CFR 200, but many organizations rotate audit firms every 5–7 years to maintain independence and bring fresh perspectives. If you change firms, plan for a longer first-year engagement as the new firm learns your organization's systems and programs.

Preparing the Schedule of Expenditures of Federal Awards (SEFA)

The SEFA is the foundation of the single audit. It is a complete listing of all federal awards expended by your organization during the fiscal year, and it drives the major program determination that dictates which programs are tested. Errors or omissions in the SEFA can result in the wrong programs being selected as major, findings for incomplete reporting, or qualified opinions on the SEFA itself.

For each federal program, the SEFA must include:

• Federal grantor and Assistance Listing Number (ALN). The ALN (formerly CFDA number) uniquely identifies the federal program. For HRSA Section 330, the ALN is 93.224. For CSBG, it is 93.569. Verify ALNs against the award documents — do not rely on memory or prior-year schedules.
• Pass-through entity information. For federal funds received through a state or local intermediary, list the pass-through entity's name and the identifying number assigned by the pass-through entity.
• Federal award identification. Include the federal award number or other identifying information for each award.
• Total expenditures. Report the total federal expenditures for each program during the fiscal year. These must tie to your general ledger.
• Amounts passed through to sub-recipients. If your organization passes federal funds to sub-recipients, disclose the amounts separately on the SEFA.

A common source of SEFA errors is misidentifying whether funds received from a state agency are federal pass-through dollars or state funds. The presence of an ALN in the award agreement is the clearest indicator. When in doubt, ask the pass-through entity to confirm whether the funding source is federal.

Type A vs. Type B Programs and Major Program Determination

The auditor determines which of your federal programs are “major” and will receive detailed compliance testing. The determination uses a risk-based approach defined in 2 CFR 200.518:

• Type A programs are larger programs. The dollar threshold for Type A classification depends on total federal expenditures: for entities with total federal awards under $25 million, a Type A program is one that expends at least $750,000 or 3% of total federal awards (whichever is greater). For larger entities, the threshold scales upward.
• Type B programs are programs that fall below the Type A threshold. They are generally not tested unless the auditor identifies them as high risk based on specific criteria (prior findings, new programs, etc.).

The auditor then applies risk criteria to determine which Type A programs are low risk (and therefore can be rotated out of testing) and whether any Type B programs should be elevated to major program status. A Type A program is considered low risk if it has been audited as a major program in at least one of the two most recent audit periods, did not have material weakness findings or material noncompliance, and did not have questioned costs exceeding 5% of total program expenditures. The percentage of federal expenditures covered by major programs must be at least 40% (or 20% for entities qualifying as low-risk auditees).

Understanding major program determination helps you anticipate which programs will be tested and focus your preparation accordingly. If you know that your HRSA 330 award is your largest program and has never been audited as major, it will almost certainly be selected. Prepare the documentation for that program first.

The 12 Compliance Areas: What Your Auditor Will Test

For each major program, the auditor will test compliance across the applicable compliance requirement categories defined in the OMB Compliance Supplement. Not all 12 categories apply to every program. The Compliance Supplement identifies the specific requirements for each ALN. However, certain requirements are universal or near-universal, and preparing for them is essential. The most commonly tested areas for health and human services organizations include:

• Activities Allowed/Unallowed & Allowable Costs (A/B). The auditor will select a sample of expenditures charged to the federal program and verify that each cost is allowable under the award terms and the cost principles in 2 CFR 200 Subpart E. Have supporting documentation (invoices, receipts, time records, cost allocation worksheets) readily available for every expenditure.
• Cash Management (C). The auditor will compare drawdown dates to expenditure dates to verify that federal cash on hand is minimized. Organizations that draw funds significantly in advance of expenditures may have cash management findings.
• Period of Performance (H). The auditor will verify that expenditures charged to the award occurred within the authorized budget/project period. Costs incurred before the start date or after the end date are unallowable.
• Procurement (I). The auditor will review procurement transactions to verify compliance with the procurement standards in 2 CFR 200.317–200.327. This includes verifying that the organization conducted required cost or price analyses, obtained required competitive bids for purchases above the micro-purchase threshold ($10,000) and simplified acquisition threshold ($250,000), and verified that vendors are not suspended or debarred (checked against SAM.gov).
• Reporting (L). The auditor will verify that required financial and performance reports (SF-425, progress reports, program-specific reports like UDS for HRSA 330 grantees) were submitted on time and that the data in those reports is consistent with the accounting records.
• Subrecipient Monitoring (M). If your organization passes federal funds to sub-recipients, the auditor will test whether you properly identified sub-recipients vs. contractors, included required information in sub-award agreements, communicated compliance requirements, performed ongoing monitoring, and reviewed sub-recipient single audits. This is a high-finding area for organizations that serve as intermediaries.

Common Documentation Gaps That Delay Audits

Audit delays are almost always caused by missing or incomplete documentation. After working through hundreds of audit cycles, the same gaps appear repeatedly. Address these proactively and your audit will proceed more smoothly:

• Missing award documents. The notice of award, approved budget, and any modifications are the source documents the auditor uses to determine what is allowable. If they are not in your files, the auditor cannot complete testing.
• Incomplete procurement documentation. A purchase order alone is not sufficient. The auditor needs to see the full procurement trail: the need determination, solicitation (if required), bids or quotes received, evaluation criteria, selection rationale, and the executed contract or purchase order. For purchases above the simplified acquisition threshold ($250,000), full and open competition documentation is required.
• Stale time and effort records. Time and effort certifications that are completed months after the fact (rather than at least semi-annually as required) raise questions about their reliability. Ensure certifications are completed on a current basis.
• Unreconciled SEFA. If SEFA totals do not tie to the general ledger, the auditor must trace the differences before testing can begin. Reconcile the SEFA to the general ledger before providing it to the auditor.
• Board minutes gaps. Auditors review board minutes for evidence of governance oversight (approval of budgets, financial review, policy adoption). Missing minutes suggest governance lapses.

Working With Your Auditor: The PBC List

Your auditor will provide a “Provided by Client” (PBC) list — a comprehensive inventory of every document and schedule they need from your organization. The PBC list is your single most important preparation tool. Treat it as a checklist and assign responsibility for each item to a specific staff member with a specific due date.

Best practices for managing the PBC process:

• Request the PBC list as early as possible — ideally during the planning phase, before interim fieldwork begins.
• Use a shared tracking document (spreadsheet or project management tool) to track the status of each PBC item: assigned to, due date, submitted date, auditor follow-up needed.
• Establish a single point of contact for auditor communications. Funneling all requests through one person prevents duplicate responses, conflicting information, and items falling through the cracks.
• Provide documents in organized, clearly labeled folders. Auditors who have to search through disorganized files bill more hours. Organization saves money.
• Respond to auditor follow-up questions within 48 hours. Every day of delay pushes your audit completion date further out, increasing the risk of missing the FAC filing deadline.

Program-Specific Preparation Notes

Different federal programs carry different compliance requirements, and your preparation should reflect the specific programs your organization operates. Here are preparation notes for common health and human services programs:

HRSA Section 330 (ALN 93.224)

The Compliance Supplement for 93.224 emphasizes eligibility (patient eligibility for services under the sliding fee discount program), reporting (UDS, SF-425), and special tests related to the 19 Program Requirements. Prepare your sliding fee discount schedule documentation, UDS data reconciliation, and evidence of board governance activities. For a comprehensive overview, see the HRSA 330 compliance guide.

Community Services Block Grant (ALN 93.569)

CSBG compliance testing focuses on allowable activities, eligibility determination (income verification for the 125% of poverty guideline), reporting (CSBG Annual Report via OLDC), and organizational standards. Prepare client intake files with income documentation, your organizational standards self-assessment, and your community needs assessment. See the CSBG program guide for detailed requirements.

Ryan White HIV/AIDS Program (ALN 93.914, 93.917, 93.918)

Ryan White programs have specific requirements around client eligibility (HIV diagnosis and income documentation), payer of last resort provisions, and service delivery standards. Prepare client eligibility files, evidence of third-party billing procedures, and documentation of required core and support services.

Record Retention Requirements

Under 2 CFR 200.334, financial records, supporting documents, statistical records, and all other records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report. However, this baseline is subject to important exceptions:

• Audit resolution. If any litigation, claim, or audit finding is started before the expiration of the 3-year period, records must be retained until all matters are resolved and final action is taken.
• Program-specific requirements. Some federal programs impose longer retention periods. HRSA health center program records, for example, may need to be retained for longer periods under specific conditions of award.
• Real property and equipment. Records for real property and equipment acquired with federal funds must be retained for three years after final disposition of the property.
• Indirect cost rate proposals. If your organization uses a negotiated indirect cost rate, the supporting documentation must be retained for three years from the date the rate was last negotiated.

In practice, many organizations retain records for 7–10 years as a conservative measure, particularly for large federal awards. Establish a records retention schedule that identifies the retention period for each category of document and the responsible staff person. Ensure that electronic records are backed up and that paper records are stored securely with an inventory system that allows retrieval within a reasonable timeframe.

The Preparation Checklist

Use this summary checklist as a final verification before audit fieldwork begins. Every item marked “no” is a potential audit delay or finding:

Preparation is the single greatest determinant of audit outcome. Organizations that invest in year-round compliance infrastructure — documented policies, organized files, current reconciliations, and proactive auditor communication — consistently receive clean audits with lower fees and faster turnaround. Organizations that scramble after year end consistently receive findings, pay higher fees, and risk late FAC submissions. The choice between these two outcomes is made 12 months before the audit, not during fieldwork.