The term “single audit” is a little misleading because it actually refers to a series of audits with multiple objectives. Simply put, a single audit is how the federal government makes sure a non-federal grant recipient is spending federal money according to expectations. These non-federal entities can be school districts, state or local governments, or universities. Typically, they are nonprofit groups, but commercial, for-profit entities can receive grants too, and when they do, they must report how the funds are used and trace each grant to related expenditures.
The origin of the name “single audit” comes from the history of tracing grants. Before 1984, each grant provider had to do their own annual audit for every grant they provided. So, for school districts and local governments that could have dozens of grants, the number of annual audits grew to be unmanageable. Thus, a single audit takes care of all federal money and accomplishes multiple objectives; it reports financial information, internal controls, and compliance information per entity.