By James Montoya, CPA, Principal and Practice Leader, Audit & Assurance, REDW Advisors & CPAs
In the past year, REDW’s Audit & Assurance team submitted 115 Single Audits to the Federal Audit Clearinghouse — spanning tribal governments, state and local governments, and nonprofit organizations. That volume has taught us something worth sharing: the firm you choose to conduct this audit matters as much as the audit itself. Choosing an audit firm is one of the most consequential decisions an organization receiving federal funding will make. You’ll likely spend years working with that firm, yet the selection process itself may occur only once every three to five years. Compounding the challenge, many audit proposals appear similar on paper, even though the experience of working with those firms can differ significantly.
The distinctions that matter most often come down to specialized experience, federal compliance knowledge, staffing resources, and client service approach. Those factors can influence everything from audit timeliness and staff workload to compliance readiness and the value your organization receives from the engagement.
The ten questions that follow are designed to help uncover those differences before you commit to a long-term audit relationship. Drawing on experience from more than 100 Single Audits completed in the past year, REDW’s Audit & Assurance team has identified the questions most likely to distinguish firms with deep Single Audit and federal grant compliance expertise from those with more limited experience.
Single Audit basics, answered— Jump to our FAQs!
Why is specialized experience one of the most important factors in audit firm selection?
What often distinguishes the client experience is the depth of experience a firm brings to organizations with similar funding sources, compliance requirements, and reporting challenges. Firms that regularly serve organizations like yours bring perspective gained from comparable engagements, along with a practical understanding of evolving regulations and leading practices.
The data backs this up.
- The President’s Council on Integrity and Efficiency’s National Single Audit Sampling Project (the federal government’s own study of audit quality, established in June 2007) found that roughly one-third of Single Audits reviewed were unacceptable, and that quality tracked directly with how many single audits the firm performed.[1] No comprehensive federal review of Single Audit quality has been conducted since — a gap GAO itself has flagged.[2] In the meantime, the stakes have only grown: GAO found that $1.17 trillion in federal award funds from 2017–2021 was linked to Single Audit findings that were both severe and persistent, meaning the same problems went unresolved for years.
- A 2023 U.S. Department of Labor study of employee benefit plan audits found a similar pattern in a related area of federal compliance work: firms performing only one or two such audits a year had a 70% deficiency rate, compared with 17% among firms performing 100 or more[3]. This is a study of a different but related area of federal compliance auditing—employee benefit plan audits, not Single Audits themselves—but the underlying pattern (experience predicts quality) shows up consistently across both.
The pattern holds across niches: the number of similar engagements a firm performs is the strongest predictor of the quality of yours.
The stakes are also public. Every Single Audit (findings included) is filed with the Federal Audit Clearinghouse and searchable at fac.gov by funders, boards, and peers. Roughly 40,000 Single Audits are filed each year, covering more than $1.1 trillion in federal awards[4]. This isn’t a niche compliance exercise, it’s a routine, high-visibility process, and who you hire to run it reflects on your organization publicly.
What questions reveal real Single Audit and Uniform Guidance depth?
How many Single Audits like ours do you perform each year?
Volume and consistency matter more than firm size. Ask specifically about audits similar to your funding profile — not the firm’s total audit practice.
How do you determine major programs and assess risk?
A firm with real depth can walk you through their risk assessment methodology in plain terms, not just cite the regulation.
How do you stay current on Uniform Guidance changes, and how do you communicate them to clients?
Uniform Guidance (2 CFR Part 200) changes periodically — most recently the 2024 revision raising the Single Audit threshold from $750,000 to $1 million in annual federal expenditures, effective for fiscal years beginning on or after October 1, 2024[5]. Firms with deep governmental and nonprofit audit practices proactively flag and communicate changes like this before they affect your filing status; firms without specialized Single Audit expertise often don’t acknowledge and communicate them until you ask.
How do you help clients maintain strong compliance between audit cycles?
Experienced Single Audit firms do more than perform annual testing. They monitor regulatory developments, share best practices from similar entities, and help clients understand evolving program requirements throughout the year.
During the last year (August 2025–July 2026), REDW’s Audit & Assurance team submitted 115 Single Audits to the Federal Audit Clearinghouse, which related to tribal entities, state and local governments, and nonprofit organizations.
That volume and mix is worth asking about directly: a firm auditing this many organizations in your specific funding environment sees the edge cases, regulatory shifts, and program-specific risks that a non-specialized firm simply doesn’t encounter often enough to recognize.
How closely does the firm’s experience align with your entity’s funding and reporting environment?
Federal funding doesn’t look the same across sectors, and a firm’s familiarity with your specific revenue streams and reporting environment matters as much as their general Single Audit experience.
How much experience do you have auditing organizations that look like ours?
- Health centers require auditors who understand the operational, financial, and compliance challenges unique to federally funded healthcare organizations.
- Governments benefit from auditors who routinely work with complex grant portfolios, governmental accounting standards, and public reporting requirements.
- Tribal enterprises benefit from auditors who understand the intersection of tribal government operations, commercial enterprises, and federal funding programs.
What should you ask about process and people?
Who will actually staff our engagement, and how consistent is that team year to year?
Turnover on your engagement team means re-explaining your organization every year. Ask how the firm staffs for continuity.
What does your PBC (prepared-by-client) request process look like, and how do you keep it manageable for a lean team?
A firm with a mature process should be able to explain how it organizes and prioritizes information requests, requests them in manageable stages, and minimizes disruption for a lean finance team.
How do you approach fieldwork, and how do you minimize disruption to internal staff?
This is especially relevant for organizations with small finance teams juggling audit season alongside daily operations.
How would you manage the transition if we switched firms?
A firm confident in its process can describe a clear transition plan — what they need from the outgoing auditor, how long it takes, and how they keep the current audit cycle on track.
How do you put these questions to work in an RFP?
If we run a formal RFP, or simply a request for proposal, how should these questions be reflected in our evaluation criteria?
The Bottom Line
The best audit firms do more than issue reports. They understand the funding environments, compliance challenges, and operational complexities their clients navigate every day.
These questions are designed to help auditor selection committees and finance leaders look beyond credentials and fee proposals to evaluate the factors that most influence audit quality: experience, specialization, resources, and client service. The answers will help you identify a firm that can bring both technical expertise and practical guidance to the audit process for years to come.
Use This Checklist in Your Next Auditor RFP Review
— A board-ready, one-page version of these ten questions you can bring into your RFP process or proposal review.
REDW’s Audit & Assurance team brings dedicated experience with tribal governments, gaming enterprises, state and local governments, and nonprofit organizations. We bring the expertise you need so you can focus on what you do best, from one firm that already knows your world.
FAQs — Single Audit basics, answered
💠 What is the difference between a financial statement audit and a Single Audit?
A financial statement audit tests whether your organization’s financial statements are fairly presented. A Single Audit does that and tests whether federal funds were spent in compliance with the specific rules attached to each federal program. If your organization spends federal awards above the threshold, you need both — performed together, in a single engagement.
💠 Does my organization need a Single Audit if we receive federal grants?
Only if your organization expends $1 million or more in federal awards in a fiscal year (raised from $750,000 under the 2024 Uniform Guidance revisions). Federal pass-through funds — grants your organization receives indirectly, through a state or another entity — count toward that threshold too.
💠 What is Uniform Guidance, and does it apply to my organization?
Uniform Guidance (2 CFR Part 200) is the federal government’s single rulebook for how organizations must manage and account for federal awards — covering everything from procurement to reporting to audit requirements. It applies to any nonprofit, tribal government, state or local government, or institution of higher education that receives federal funding, regardless of size, though the Single Audit requirement only kicks in at the $1 million threshold.
💠 How long does a Single Audit take?
Timelines vary by organization size and readiness, but most Single Audits run 8–12 weeks from planning and risk assessment to report issuance, with the final package due to the Federal Audit Clearinghouse within nine months of fiscal year end. Organizations with well-organized documentation and a consistent audit team typically move faster.
Sources
[1] PCIE/ECIE, Report on National Single Audit Sampling Project (June 2007)
[2] U.S. GAO, Single Audits: Improving Federal Audit Clearinghouse Information and Usability Could Strengthen Federal Award Oversight, GAO-24-106173 (2024)
[3] U.S. Department of Labor, EBSA, Audit Quality Study (November 2023)
[4] U.S. GAO, Single Audits: Improving Federal Audit Clearinghouse Information and Usability Could Strengthen Federal Award Oversight, GAO-24-106173 (2024)
