Audited financials, a review, or neither
Do I need audited financial statements to apply for grants?
It depends on the funder and on how much federal money you spend. Federal single audit requirements are triggered by spending $750,000 or more in federal awards in a fiscal year, which is about expenditure rather than about your budget size. Below that, announcements vary: many accept a financial review, which is a lower level of assurance and costs substantially less, and some accept internally prepared statements with a board resolution. Read the announcement rather than assuming, because supplying less than asked for is a compliance failure and supplying an audit you did not need is money spent for nothing.
Last reviewed 10 August 2026.
The three levels, and what they cost you
- Audit
- The highest level of assurance. An independent accountant tests your records and gives an opinion. Required by the federal single audit rules once you spend $750,000 or more in federal awards in a year, and required by some funders regardless.
- Review
- Limited assurance, based on analysis and enquiry rather than testing. Substantially cheaper and faster than an audit, and accepted by a great many announcements, particularly for smaller organizations.
- Internally prepared
- Your own statements, usually with a board resolution attesting to them. Accepted by smaller foundations and by some state programmes, and increasingly common for organizations under a few hundred thousand in budget.
The threshold that catches people
The single audit trigger is federal money SPENT in a fiscal year, not federal money awarded and not your total budget. An organization that wins a large multi-year federal award can cross the threshold in year two without any change in its own size, and the audit has to be procured and completed within nine months of year end.
That is worth knowing before you accept the award rather than after. It is a real cost of a federal grant and it belongs in your thinking about whether the grant is worth pursuing, alongside the reporting burden.
If you are close to the line, your accountant can tell you in an afternoon. It is one of the cheapest pieces of professional advice available and one of the most consequential.
Who asks this most
The answer above is the same whoever you are. What Quillify does about it is not.
Related
- Is your organization ready to apply for grants?What does my organization need before it can apply for grants?
- The work that starts when the money arrivesWhat are my obligations after winning a grant?
- The budget narrative, line by lineWhat goes in a grant budget narrative?
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