Your cooperator must send a letter or email for you to include in the agreement package, indicating whether or not they expend $500k or more of federal funds in a given year. If they to expend that amount of federal funding, they must undertake an A-133. See below for an explanation.
Many organizations and government agencies that receive federal funds are required to undergo a Single Audit, also known as an "OMB A-133 Audit" for the regulations set down in Circular A-133 by the U.S. Office of Management and Budget (OMB).
There are several requirements outlining which programs need to be audited, but in general, any entity that expends $500,000 or more of federal grants or awards in a year is required to undertake an OMB A-133 audit. These recipients commonly include states, cities, universities, and non-profit organizations.
The purpose of a Single Audit is to ensure a recipient of federal funds is in compliance with the federal program's requirements for how the money can be used. Each federal agency that gives out grants outlines specific items it feels are important for recipients to meet to ensure the successful management of the program and alignment with the legislative intent of the program. These items are laid out in the A-133 Compliance Supplement, which is updated annually.
An A-133 audit by a qualified firm will ensure that a recipient of federal funds is in compliance with all of the audit requirements outlined in the Compliance Supplement by the federal agency who granted them the funds. The auditor will look at the recipient's general management of its operations, as well as the specific ways it manages the money granted to it by any government agencies.
Specifically, the Single Audit looks at the recipient's financial records, financial statements, federal award transactions and expenditures, internal control systems, and the federal assistance it received during the audit period.
The Single Audit is performed by an independent certified public accountant (CPA), and must be filed electronically with the Federal Audit Clearinghouse each year. Results of the A-133 audit are due within 9 months after the end of the audit period.