An A-133 audit, now known as a "Single audit" is required in any fiscal year that an organization - including States, local governments, tribes, universities, and non-profit organizations - expend $750,000 or more of grant money that has originated from federal funding sources.
While a grant does not include a profit component as does a contract, a common misconception is that only not-for-profits are subject to an A-133 audit, when in fact any entity that receives and expends grant money above the threshold- including for profit government contractors - are subject to a single audit.
The audit is typically conducted by an independent CPA firm and occasionally by DCAA, and tends to be more extensive and scrutinizing than a traditional audit of your financial statements. The purpose is to ensure that the non-federal organization has appropriate internal controls in place and to ensure that compliance is maintained with OMB Circular A-122 or with Circular A-21 for educational institutions.
