Single audit requirements for for-profit entities do not apply in the way they apply to nonprofits, states, tribes, and local governments. The Single Audit Act and the Uniform Guidance at 2 CFR Part 200, Subpart F, cover only “non-Federal entities,” a category that leaves for-profit companies out.1GovInfo. Single Audit Act Amendments of 19962eCFR. 2 CFR 200.501 – Audit Requirements That exclusion does not mean no audit at all. If you receive federal grant or cooperative agreement funds as a for-profit, you may still owe a compliance audit under the awarding agency’s own rules, or you may be subject to pass-through entity monitoring if you hold the money as a subrecipient.
Why the Single Audit Act Doesn’t Reach For-Profits
The Single Audit Act Amendments of 1996 impose the single audit obligation on non-federal entities that spend $1,000,000 or more in federal awards per fiscal year. The statute defines that term to include states, local governments, and nonprofit organizations. For-profits are not on the list.1GovInfo. Single Audit Act Amendments of 1996
OMB’s Uniform Guidance carries that exclusion into the regulations. Section 200.501(i) says directly that Subpart F “does not apply to for-profit organizations.”2eCFR. 2 CFR 200.501 – Audit Requirements Because of that, for-profit entities do not submit anything to the Federal Audit Clearinghouse, which accepts only Subpart F audits from governments, tribes, nonprofits, and institutions of higher education.3Federal Audit Clearinghouse. Do For-Profit Entities Submit Audits to the FAC
OMB’s April 2024 revisions to the Uniform Guidance did not change this. OMB replaced “non-Federal entity” with “recipient” or “subrecipient” throughout Subparts A through E to improve readability, but noted that the change “does not change the existing scope or applicability of the guidance.” The old term is now reserved mainly for Subpart F, reinforcing the line between entities the Single Audit Act reaches and those it does not.4GovInfo. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards – Final Rule
What You Owe as a Subrecipient
If a for-profit company receives federal funds through a pass-through entity rather than directly from the agency, the pass-through entity carries the oversight duty. Under 2 CFR 200.501(i), the pass-through must set requirements to ensure the for-profit subrecipient complies with the award’s terms, and the subaward agreement itself must spell out the applicable compliance requirements and the subrecipient’s responsibilities.5eCFR. 2 CFR Part 200, Subpart F – Audit Requirements
Expect the pass-through to use some combination of pre-award review of your financial systems and controls, ongoing review of financial and performance reports during the period of performance, and post-award audits to verify how funds were spent. The pass-through must also evaluate your risk of noncompliance based on factors like prior audit results, your experience with federal funds, and recent changes in personnel or financial systems.6U.S. Department of the Treasury. Subrecipient Monitoring and Management If monitoring turns up deficiencies, the pass-through must ensure timely corrective action and issue a management decision on any applicable audit findings within six months of receiving the audit report.
The DOE Compliance Audit Rule
The Department of Energy is the clearest example of an agency that built its own audit regime for for-profit recipients. Through 2 CFR Part 910, Subpart F, DOE applies Single Audit Act principles to for-profits even though the statute does not.7U.S. Department of Energy. PF 2025-02 Class Deviation to 2 CFR 910.501 Audit Requirements for For-Profit Organizations
Expenditure Threshold
A DOE class deviation issued October 2, 2024, raised the audit threshold for for-profit organizations from $750,000 to $1,000,000 in DOE award expenditures per fiscal year, aligning it with the updated Uniform Guidance threshold for non-federal entities. The deviation stays in place pending formal rulemaking.7U.S. Department of Energy. PF 2025-02 Class Deviation to 2 CFR 910.501 Audit Requirements for For-Profit Organizations If you spend less than $1,000,000 in DOE awards you are exempt from the audit requirement, but you must keep records available for review by DOE, pass-through entities, and the Government Accountability Office.8U.S. Department of Energy. Class Deviation to 2 CFR 910.501
Which Awards Get Audited
Scope depends on how the funding is distributed. If any single DOE award involves expenditures of $1,000,000 or more, a compliance audit is required for that award. If no single award reaches $1,000,000 but total DOE expenditures meet or exceed that figure, you identify clusters of awards with common compliance requirements, and a compliance audit is required for the largest cluster or the largest individual award not in a cluster, whichever is greater.8U.S. Department of Energy. Class Deviation to 2 CFR 910.501
Standards and Cost Principles
The audit must be conducted under Generally Accepted Government Auditing Standards, known as the Yellow Book.9U.S. Department of Energy. OCED Recipient Initiated Audit Guidance The cost principles are different from those a nonprofit would use. Under 2 CFR 910.352, for-profit recipients and subrecipients follow the Federal Acquisition Regulation cost principles at 48 CFR Part 31, Subpart 31.2, not the Uniform Guidance principles in 2 CFR 200.400 through 200.476.10Cornell Law Institute. 2 CFR 910.352 Every cost must be reasonable, allocable to the federal award, and compliant with the specific allowability rules in FAR 31.205. If you claim a cost, the burden of showing it is reasonable falls on you.11Acquisition.gov. FAR Subpart 31.2 – Contracts With Commercial Organizations
How the Report Is Submitted
For-profit reports do not go to the Federal Audit Clearinghouse. You submit the compliance audit report by email directly to the DOE contracting officer and to DOE’s Office of the Chief Financial Officer, due within the earlier of 30 days after receiving the auditor’s report or nine months after the end of your fiscal year.12U.S. Department of Energy. EERE For-Profit Compliance Audit Information
How Other Agencies Handle It
NIH and HHS
NIH does not maintain a standalone audit regulation for for-profit recipients comparable to 2 CFR 910. It defers to 2 CFR 200.501. Under the NIH Grants Policy Statement revised March 2026, a for-profit organization must obtain a non-federal audit if it expends $750,000 or more in federal awards during its fiscal year, with reports submitted to the HHS Audit Resolution Division within the earlier of 30 days after receiving the auditor’s report or nine months after the fiscal year ends.13NIH. NIH Grants Policy Statement – Audit The NIH threshold has not been updated to $1,000,000, so for-profit NIH recipients face a lower trigger than those under DOE’s revised framework.
DOD
DOD addresses for-profit grant and cooperative agreement recipients through 32 CFR Part 34. A 2020 rulemaking set the DOD audit threshold at $750,000, matching the pre-2024 threshold used for other entity types.14Federal Register. DOD Grant and Agreement Regulations DOD grants officers exercise professional judgment case by case on whether a closeout audit is necessary, weighing award size and past experience with the recipient.15Cornell Law Institute. 32 CFR 22.825
USDA and Everyone Else
USDA’s National Institute of Food and Agriculture relies on the standard Uniform Guidance framework in 2 CFR 200, Subpart F, without creating for-profit-specific rules.16USDA NIFA. NIFA Audit Requirements Since Subpart F does not cover for-profits, USDA leans on pass-through monitoring when a for-profit receives funds as a subrecipient. Most other agencies follow the same pattern, putting audit requirements in individual award terms rather than in agency-wide regulations. If you hold awards from multiple agencies, check each award document; the applicable threshold depends on the funder.
Grants Are Not Contracts
A for-profit often holds federal grants or cooperative agreements alongside FAR-based contracts, and the two regimes are separate. Federal contracts fall under FAR Part 31.2 cost principles and DCAA oversight, including pre-award accounting system surveys and annual incurred-cost audits on cost-reimbursement contracts.17SBIR.gov. Accounting and Finance Tutorial Federal grants and cooperative agreements fall under agency-specific regulations like DOE’s 2 CFR 910 or the terms of the award itself.
Contract spending does not count toward the grant compliance audit threshold. A company spending $2 million on defense contracts and $500,000 on a DOE grant would not hit the $1,000,000 DOE trigger. The two pools of federal money are counted separately. And a DCAA incurred-cost audit does not satisfy the compliance audit requirement for federal grants or cooperative agreements; the two examine different things.
How a Compliance Audit Differs From a Single Audit
A single audit covers all of a non-federal entity’s federal award activity across every program, identifies major programs through a risk assessment, and produces a full package that includes entity-wide financial statements, a schedule of expenditures of federal awards, reports on internal controls and compliance, a summary of prior findings, and a corrective action plan.5eCFR. 2 CFR Part 200, Subpart F – Audit Requirements
A for-profit compliance audit is narrower. It typically focuses on the specific DOE award or cluster that triggered the threshold. It still must be conducted under GAGAS, still tests internal controls over compliance, and still assesses whether costs are allowable under FAR 31.2.9U.S. Department of Energy. OCED Recipient Initiated Audit Guidance The report goes to the awarding agency rather than to the Clearinghouse. You still need a qualified independent auditor and adherence to the Yellow Book.18GAO. Government Auditing Standards (Yellow Book)
What Noncompliance Costs You
If a for-profit fails to obtain a required compliance audit or fails to resolve findings, the agency or pass-through can act under 2 CFR 200.339. Available remedies include withholding payments until you take corrective action, disallowing costs tied to the noncompliant activity, suspending or terminating the award in part or in full, initiating suspension or debarment proceedings that can bar you from future federal awards, and withholding further federal funds for the project or program.19Cornell Law Institute. 2 CFR 200.339 – Remedies for Noncompliance
DOE’s own guidance reinforces those sanctions, specifying that it may prohibit audit costs from being charged to awards, withhold overhead payments, or terminate the award outright when an entity shows “continued inability or unwillingness to conduct an audit or resolve findings.”20U.S. Department of Energy. DOE Audit Guidance for For-Profit Financial Assistance Awards The cost of the audit itself is generally an allowable charge to the federal award, so you do not bear that expense alone.
The 2024 Threshold Changes and the Agency Lag
OMB’s April 2024 revisions to the Uniform Guidance, effective October 1, 2024, raised the single audit expenditure threshold from $750,000 to $1,000,000 and lifted the Type A program threshold to match. The de minimis indirect cost rate rose from 10% to up to 15% of modified total direct costs, and the equipment capitalization threshold went from $5,000 to $10,000.21The CPA Journal. Navigating Uniform Guidance Compliance
DOE followed the threshold change with its October 2024 class deviation, but NIH’s most recent grants policy statement still references $750,000 for for-profit recipients.13NIH. NIH Grants Policy Statement – Audit The practical result is that the applicable threshold depends on which agency provided the funding. Read your award terms and check each funding agency’s current policy before assuming the higher number applies.