Single Audit Support That Reduces Questioned Costs Before the Auditor Arrives
Federal grant audits don't have to end in findings. We help nonprofits navigate Uniform Guidance requirements, tighten internal controls, and minimize questioned costs — so your funding stays intact and your relationships with funders stay strong.
How We Approach Single Audit Preparation
Questioned Costs Can Jeopardize More Than One Award
When a federal auditor flags questioned costs, the consequences rarely stop at the audit report. Funders review findings, program officers take notice, and future award decisions are shaped by what's in your audit history. For nonprofits managing multiple federal awards, a single finding under 2 CFR 200 — the Uniform Guidance framework that governs federal award compliance — can trigger additional scrutiny across your entire portfolio.
Most questioned costs aren't the result of fraud or mismanagement. They stem from documentation gaps, cost allocation errors, and internal control weaknesses that were never caught before the audit window opened. That's exactly where we work.
Common sources of questioned costs we help nonprofits address:
- Inadequate or missing documentation for allowable costs under 2 CFR 200
- Misaligned cost allocation methodologies across multiple funding sources
- Payroll and time-and-effort reporting that doesn't meet federal standards
- Procurement practices that fall outside Uniform Guidance requirements
- Subrecipient monitoring gaps that expose the pass-through entity to liability
- Untimely or inaccurate federal financial reporting
How We Approach Single Audit Preparation
We've Sat on Both Sides of the Grant Table
Our team has worked as funders and as grantees. We know what auditors look for because we understand how federal awards are structured and monitored from the inside. That perspective shapes how we prepare your organization — not just for the audit itself, but for the compliance posture that prevents findings year over year.
We don't arrive the week before fieldwork begins. Our single audit support is built around early, systematic preparation that closes gaps before they become findings.
What our single audit and questioned cost reduction work includes:
- Pre-audit compliance review against 2 CFR 200 and program-specific requirements
- Internal controls assessment and gap remediation
- Reconciliation of federal expenditures to the Schedule of Expenditures of Federal Awards (SEFA)
- Time-and-effort documentation review and corrective guidance
- Support for management representation letters and auditor communications
- Post-audit corrective action plan development for any findings that do arise
We work with nonprofits nationwide, fully remote — which means your organization gets specialized federal grant audit expertise regardless of where you're located.
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COMMON QUESTIONS
Frequently Asked Questions About Single Audits and Questioned Costs
What triggers a single audit for a nonprofit organization?
A single audit is required when a nonprofit expends $750,000 or more in federal awards in a single fiscal year. This threshold applies to the total of all federal funds expended, including pass-through awards received from state or local governments. Organizations that meet this threshold must comply with the requirements of 2 CFR 200, Subpart F.What is a questioned cost and how does it affect our organization?
A questioned cost is an expenditure that an auditor has identified as potentially unallowable, unsupported, or not in compliance with federal requirements. Questioned costs can result in repayment demands from the awarding agency, conditions placed on future awards, or reputational damage with funders. Reducing questioned costs before the audit begins is far less costly than resolving them after a finding is issued.How early should we start preparing for a federal grant audit?
Preparation should be ongoing throughout the grant period, not concentrated in the weeks before fieldwork. Compliance gaps — particularly in documentation, cost allocation, and subrecipient monitoring — are much easier to correct when identified early. We recommend a pre-audit compliance review at least 90 days before your anticipated audit window.Can you help us respond to audit findings from a prior year?
Yes. If your organization received findings in a previous single audit, we can help you develop a corrective action plan, implement the internal control changes needed to prevent recurrence, and document your remediation efforts for the current audit cycle. Auditors look closely at whether prior-year findings have been resolved — a well-documented response strengthens your position significantly.Do you work with nonprofits that receive both federal direct awards and pass-through funding?
We do. Many of our clients manage a combination of direct federal awards and pass-through funds from state agencies or larger nonprofits acting as intermediaries. The compliance requirements differ between these award types, and we account for both in our preparation work — including subrecipient monitoring obligations for organizations that pass federal funds through to other entities.