Nonprofit leaders often feel a shift in energy as March arrives. The spring season brings more than flowers. For organizations with a June 30 fiscal year end, the March 31 deadline represents a significant milestone. This date marks the submission deadline for single audits. Preparing for this requirement requires attention to detail and an understanding of the 2025 Compliance Supplement.
Federal agencies recently updated the rules governing these audits. These changes affect how you track money, report expenditures, and manage assets. Staying ahead of these requirements prevents stress during the final weeks of the audit process. Maven CPA wants to ensure your nonprofit remains compliant and prepared.
The New One Million Dollar Threshold
One of the most discussed changes involves the audit threshold. Previously, organizations spending 750,000 dollars or more in federal funds required a single audit. The 2024 Uniform Guidance Revision increased this amount to 1,000,000 dollars. This change sounds simple, but implementation requires care.
The date of your award determines which threshold applies. Awards issued before October 1, 2024, still fall under the 750,000 dollar rule. Awards issued on or after that date follow the new 1,000,000 dollar limit. Many nonprofits hold a mix of old and new funding. If your organization spends funds from an older award, the lower threshold likely remains your target.
Miscalculating this threshold leads to missed audits or unnecessary expenses. Review your award letters today. Identify the specific start dates for every federal grant. This clarity helps your team decide if a single audit is necessary this year.
Dual Framework Compliance: Old vs New Rules
The 2025 Compliance Supplement introduces a dual framework model. This model exists because two different versions of the Uniform Guidance are currently active. Some of your grants might follow the older rules. Newer grants must follow the 2024 Revision.
Auditors now look at two separate sets of compliance requirements within the same audit. This dual framework affects areas like procurement, subrecipient monitoring, and indirect costs. Managing these different rules requires organized record keeping.
Create separate folders or digital tags for grants based on their award date. Labeling grants as Pre-Revision or Post-Revision helps staff apply the correct rules for spending. This organization saves time when the auditor requests documentation for specific transactions.
SAM.gov and FFATA Reporting Requirements
Federal Funding Accountability and Transparency Act (FFATA) reporting remains a priority for federal regulators. The 2025 Compliance Supplement places additional emphasis on these reports. Organizations must now use SAM.gov for reporting due on or after March 8, 2025.
Auditors will check your SAM.gov account during the audit. They look for timely submissions and accurate data. Failure to report executive compensation or subaward information leads to audit findings. These findings appear in your public audit report and potentially affect future funding.
Assign a specific team member to monitor SAM.gov access. Ensure passwords remain active and permissions stay up to date. Screen print your submission confirmations. These digital receipts provide the evidence your auditor needs to verify compliance.
5 Steps to Update Your Assets and Bookkeeping
Updating your internal systems to match new federal limits is essential. The 2024 Revision increased the capitalization threshold for equipment from 5,000 dollars to 10,000 dollars. Your bookkeeping should reflect this change to stay consistent with federal rules.
-
Update the Written Capitalization Policy. Your board of directors must approve a formal change to your financial policies. This document should state the new 10,000 dollar limit for assets. Having a signed policy protects you during the audit.
-
Revise the General Ledger Chart of Accounts. Ensure items costing less than 10,000 dollars appear as supplies or small equipment expenses. Stop adding these smaller items to your depreciation schedule unless your organization has a specific reason to keep the lower limit.
-
Reconcile the Fixed Asset Register. Review purchases made since the start of your fiscal year. If you recorded a 7,000 dollar item as an asset, move the cost to an expense account to match your new policy. This keeps your balance sheet clean.
-
Verify Procurement Procedures. The 2024 Revision changed more than just asset prices. It also updated the de minimis indirect cost rate to 15 percent. Ensure your bookkeeping system calculates these costs correctly based on your specific grant agreements.
-
Document the Transition Period. Keep a memo in your permanent files explaining when the organization adopted the new limits. This memo helps future staff and auditors understand why accounting treatments changed mid year.
Avoiding Common Pitfalls in the 2025 Supplement
Every year, certain mistakes appear frequently in audit reports. The 2025 Supplement focuses on several high risk areas. Procurement remains a top concern for federal agencies. Many organizations fail to document their rationale for choosing a specific vendor.
If you use federal funds for a purchase, you must follow specific competition rules. The 2024 Revision simplified some parts of procurement, but documentation requirements remain strict. Always keep copies of quotes and bids. Write a short explanation for why a vendor was selected. This simple step prevents the most common audit finding.
Subrecipient monitoring is another area where mistakes happen. If your nonprofit passes federal funds to another organization, you are responsible for their compliance. You must perform a risk assessment before awarding the funds. You must also review their financial reports regularly. The 2025 Supplement reminds auditors to check for these specific oversight activities.
HUD and Program Specific Changes
Nonprofits receiving funding from the Department of Housing and Urban Development (HUD) should pay close attention this year. The 2025 Compliance Supplement includes updates for several HUD programs. These changes often relate to tenant file documentation and property inspections.
Check the specific section of the Supplement that matches your Assistance Listing Number (ALN). Each program has unique requirements for eligibility and reporting. Knowing these details before the audit starts allows you to fix missing documentation.
Final Audit Checklist for March
As the March 31 deadline approaches, use this checklist to ensure readiness:
- Confirm all federal expenditures are recorded in the general ledger.
- Reconcile your Schedule of Expenditures of Federal Awards (SEFA).
- Verify that your SAM.gov registration is active and not expired.
- Gather all grant agreements and amendment letters for the auditor.
- Review your internal control documentation to ensure staff follow current policies.
A single audit provides a chance to show your donors and federal partners that your organization manages funds responsibly. While the process feels daunting, preparation simplifies the work. Addressing the changes in the 2025 Compliance Supplement now ensures a smoother experience for everyone involved.
Take Action Today
Managing federal grants requires constant vigilance. The rules change, but the mission of your nonprofit stays the same. Do not let compliance hurdles distract you from serving your community.
If you feel overwhelmed by the March 31 deadline or the 2025 Compliance Supplement changes, help is available. Maven CPA specializes in helping nonprofits handle these complex requirements. We offer accounting services and tax services designed for your unique needs.
Contact Maven CPA today to discuss your audit preparation. Let our team provide the financial advice and support you need to succeed. Visit our website at https://mavencpa.com to learn more about our services. You can also reach out through our contact page to schedule a consultation. Together, we can ensure your organization stays compliant and focused on the future.