2026 Single Audit Thresholds: Does Your Organization Still Need an Audit?

For decades, the “magic number” for federal compliance was $750,000. If your organization expended more than that in federal awards, you were triggered into a Single Audit (formerly known as an A-133 audit).

However, as of late 2025 and moving into the 2026 fiscal year, the landscape has shifted. The Office of Management and Budget (OMB) has updated the Uniform Guidance (2 CFR 200), providing much-needed relief to smaller organizations—but also creating new questions about HUD-specific reporting.

At Wilson & Associates CPA, we want to ensure you don’t pay for an audit you no longer need, while also ensuring you don’t miss a mandatory HUD filing.

The most significant change for 2026 is the increase of the Single Audit threshold from $750,000 to $1,000,000.

• Who it impacts: Non-profit organizations, state/local governments, and tribes that receive federal funding (including CDBG, HOME, and Section 8).
• The Rule: If your total federal expenditures across all programs are below $1 million in a fiscal year beginning on or after October 1, 2024, you are exempt from the Single Audit requirement for that year.

This is the most common mistake we see in 2026. While you might be exempt from a Single Audit under OMB rules, you may still be required to submit Audited Financial Statements under HUD’s program-specific rules.

• For-Profit Owners: For-profit multifamily projects are generally not subject to the Single Audit Act. Instead, they follow the HUD Consolidated Audit Guide. Their threshold for an audit remains at $500,000 in combined federal financial assistance.
• Non-Profit Owners: If you fall between $500,000 and $1,000,000 in expenditures, you might skip the “Compliance” portion of a Single Audit, but HUD may still require an audit of your financial statements to be submitted via eZ-Audit.

Even if you believe you are under the $1 million threshold, you must still prepare a Schedule of Expenditures of Federal Awards (SEFA).

• Why it matters: You cannot prove you are exempt unless you have accurately tracked every dollar of federal “expenditure.” This includes non-cash assistance, such as outstanding loan balances on HUD-insured mortgages.
• The Risk: If you under-calculate your expenditures and fail to perform a required Single Audit, HUD can suspend your funding until a re-audit is completed—a process that often costs twice as much as the original audit.

Being exempt from a Single Audit does not mean you are exempt from federal compliance.

• The “Defend the Spend” Era: In 2026, HUD agencies are requesting more documentation at the “draw-down” stage. Even without an annual auditor, you must still comply with 2 CFR 200 regarding procurement, allowable costs, and internal controls.

The transition from $750k to $1M has created a “gray area” for many HUD participants. At Wilson & Associates CPA, we provide Threshold Assessments to help you determine exactly which rules apply to your specific mix of funding.

Don’t overpay for compliance, but don’t risk a HUD finding.

Contact Wilson & Associates CPA to review your 2026 funding levels. We’ll help you determine if you qualify for the new exemption and ensure your HUD financial reporting is accurate, timely, and cost-effective.