§ 200.501 - Audit requirements.

§ 200.501 Audit requirements.

(a) Audit required. A non-Federal entity that expends $750$1,000,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part.

(b) Single audit. A non-Federal entity that expends $750$1,000,000 or more in Federal awards during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) or (d) of this section.

(c) Program-specific audit election . When an auditee (in general). A non-Federal entity may elect to have a program-specific audit conducted in accordance with § 200.507 if the following conditions are met:

(1) The non-Federal entity expends Federal awards under only one Federal program (excluding

R&D) and the

research and development); and

(2) The Federal program's statutes

,

or regulations, or

the

terms and conditions of the Federal award, do not require a financial statement audit of the

auditee, the auditee

non-Federal entity.

(d) Program-specific audit election for research and development. A non-Federal entity may elect to have a program-specific audit for research and development conducted in accordance with § 200.507

. A program-specific audit may not be elected for R&D unless

, but only if all of the following conditions are met:

(1) The non-Federal

awards expended were received

entity expends Federal awards only from the same Federal agency, or the same Federal agency and the same pass-through entity

, and that

; and

(2) The Federal agency, or pass-through entity in the case of a subrecipient, approves

in advance

a program-specific audit in advance.

(

d

e)Exemption when Federal awards expended are less than

$750

$1,000,000. A non-Federal entity that expends less than

$750

$1,000

during the non-Federal entity's fiscal year in Federal awards

,000 in Federal awards during its fiscal year is exempt from Federal audit requirements for that year, except as noted in § 200.503

, but records

. However, in all instances, the records of the non-Federal entity must be available for review or audit by appropriate officials of the Federal agency, pass-through entity, and the Government Accountability Office (GAO).

(

e

f) Federally Funded Research and Development Centers (FFRDC). Management of an auditee that owns or operates a FFRDC may elect to treat the FFRDC as a separate entity for purposes of this part.

(

f

g) Subrecipients and contractors. An auditee may simultaneously be a recipient, a subrecipient, and a contractor. Unless a program is exempt by Federal statute, Federal awards expended as a recipient or a subrecipient are subject to audit under this part.

The payments

Payments received for goods or services provided as a contractor

are not Federal awards. Section § 200.331 sets forth the considerations in determining whether payments constitute a Federal award or a payment for goods or services provided as a contractor.

(gunder a Federal award (see § 200.331) are not subject to audit under this part.

(h) Compliance responsibility for contractors. In most cases, the auditee's compliance responsibility for contractors is

only

to ensure that the procurement, receipt, and payment for goods and services comply with Federal statutes, regulations, and the terms and conditions of a Federal

awards

award. Federal award compliance requirements normally do not

pass through

flow down to contractors. However,

the auditee is responsible

for

ensuring compliance for

procurement transactions in which

are structured such that

the contractor is made responsible for meeting program

compliance or the

requirements, the auditee must ensure those requirements are met, including by clearly stating the contractor's

records must be reviewed

responsibilities within the contract and reviewing the contractor's records to determine

program

compliance. Also, when these procurement transactions relate to a major program, the scope of the audit must include

determining

a determination of whether these transactions

are in compliance

comply with Federal statutes, regulations, and the terms and conditions of a Federal

awards.

(h) award. See also § 200.318(b).

(i) For-profit subrecipient.

Since this part

This subpart does not apply to for-profit

subrecipients

organizations. As necessary, the pass-through entity is responsible for establishing requirements

, as necessary,

to ensure compliance by for-profit subrecipients. The

agreement

subaward with

the

a for-profit subrecipient must describe applicable compliance requirements and the for-profit subrecipient's compliance responsibility. Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring

during the agreement

throughout the performance of the subaward, and post-award audits

. See also

(see § 200.332

.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 85 FR 49571, Aug. 13, 2020]

).