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§ 200.02 CFR Ch. II (1–1–14 Edition)200.510200.511200.512Financial statements.Audit findings follow-up.Report submission.200.513Responsibilities.CFR Code of Federal RegulationsCMIA Cash Management Improvement ActCOG Councils Of GovernmentsCOSO Committee of Sponsoring Organizations of the Treadway CommissionD&B Dun and BradstreetDUNS DataUniversalNumberingSystemEPA Environmental Protection AgencyERISA Employee Retirement IncomeSecurity Act of 1974 (29 U.S.C. 1301–1461)EUI Energy Usage IndexF&A Facilities and AdministrationFAC Federal Audit ClearinghouseFAIN Federal Award IdentificationNumberFAPIIS Federal Awardee Performance and Integrity Information SystemFAR Federal Acquisition RegulationFFATA Federal Funding Accountability and Transparency Act of 2006or Transparency Act—Public Law109–282, as amended by section 6202(a)of Public Law 110–252 (31 U.S.C. 6101)FICA Federal Insurance Contributions ActFOIA Freedom of Information ActFR Federal RegisterFTE Full-time equivalentGAAP Generally Accepted Accounting PrinciplesGAGAS Generally Accepted Government Accounting StandardsGAO General Accounting OfficeGOCO Government owned, contractoroperatedGSA General Services AdministrationIBS Institutional Base SalaryIHE Institutions of Higher EducationIRC Internal Revenue CodeISDEAA IndianSelf-Determinationand Education and Assistance ActMTC Modified Total CostMTDC Modified Total Direct CostOMB Office of Management and BudgetPII Personally Identifiable InformationPRHP Post-retirement Health PlansPTE Pass-through EntityREUI Relative Energy Usage IndexSAM System for Award ManagementSFA Student Financial AidSNAP Supplemental Nutrition Assistance ProgramFEDERAL AGENCIESAUDITORS200.514 Scope of audit.200.515 Audit reporting.200.516 Audit findings.200.517 Audit documentation.200.518 Major program determination.200.519 Criteria for Federal program risk.200.520 Criteria for a low-risk auditee.MANAGEMENT DECISIONS200.521 Management decision.APPENDIX I TO PART 200—FULL TEXT OF NOTICE OF FUNDING OPPORTUNITYAPPENDIX II TO PART 200—CONTRACT PROVISIONS FOR NON-FEDERAL ENTITY CONTRACTS UNDER FEDERAL AWARDSAPPENDIX III TO PART 200—INDIRECT (F&A)COSTS IDENTIFICATION AND ASSIGNMENT,AND RATE DETERMINATION FOR INSTITUTIONS OF HIGHER EDUCATION (IHES)APPENDIX IV TO PART 200—INDIRECT (F&A)COSTS IDENTIFICATION AND ASSIGNMENT,AND RATE DETERMINATION FOR NONPROFITORGANIZATIONSAPPENDIX V TO PART 200—STATE/LOCAL GOVERNMENT AND INDIAN TRIBE-WIDE CENTRAL SERVICE COST ALLOCATION PLANSAPPENDIX VI TO PART 200—PUBLIC ASSISTANCE COST ALLOCATION PLANSAPPENDIX VII TO PART 220—STATES ANDLOCAL GOVERNMENT AND INDIAN TRIBE INDIRECT COST PROPOSALSAPPENDIX VIII TO PART 200—NONPROFIT ORGANIZATIONS EXEMPTED FROM SUBPARTE—COST PRINCIPLES OF PART 200APPENDIX IX TO PART 200—HOSPITAL COSTPRINCIPLESAPPENDIX X TO PART 200—DATA COLLECTIONFORM (FORM SF–SAC)APPENDIX XI TO PART 200—COMPLIANCE SUPPLEMENTAUTHORITY: 31 U.S.C. 503SOURCE: 78 FR 78608, Dec. 26, 2013, unlessotherwise noted.Subpart A—Acronyms andDefinitionsACRONYMSwreier-aviles on DSK5TPTVN1PROD with CFR§ 200.0Acronyms.ACRONYMTERMCAS Cost Accounting StandardsCFDA Catalog of Federal DomesticAssistance80VerDate Mar 15 201014:08 Mar 14, 2014Jkt 232005PO 00000Frm 00090Fmt 8010Sfmt 8010Y:\SGML\232005.XXX232005

OMB Guidance§ 200.10SPOC Single Point of ContactTANF TemporaryAssistanceNeedy FamiliesTFM Treasury Financial ManualU.S.C. United States CodeVAT Value Added Tax§ 200.5for§ 200.1 Definitions.These are the definitions for termsused in this part. Different definitionsmay be found in Federal statutes orregulations that apply more specifically to particular programs or activities. These definitions could be supplemented by additional instructional information provided in governmentwidestandard information collections.§ 200.6Auditee.Auditee means any non-Federal entity that expends Federal awards whichmust be audited under Subpart F—Audit Requirements of this part.§ 200.7Auditor.Auditor means an auditor who is apublic accountant or a Federal, stateor local government audit organization, which meets the general standards specified in generally acceptedgovernmentauditingstandards(GAGAS). The term auditor does notinclude internal auditors of nonprofitorganizations.§ 200.2 Acquisition cost.Acquisition cost means the cost of theasset including the cost to ready theasset for its intended use. Acquisitioncost for equipment, for example, meansthe net invoice price of the equipment,including the cost of any modifications, attachments, accessories, or auxiliary apparatus necessary to make itusable for the purpose for which it isacquired. Acquisition costs for software includes those development costscapitalized in accordance with generally accepted accounting principles(GAAP). Ancillary charges, such astaxes, duty, protective in transit insurance, freight, and installation may beincluded in or excluded from the acquisition cost in accordance with the nonFederal entity’s regular accountingpractices.§ 200.8Budget.Budget means the financial plan forthe project or program that the Federal awarding agency or pass-throughentity approves during the Federalaward process or in subsequent amendments to the Federal award. It may include the Federal and non-Federalshare or only the Federal share, as determined by the Federal awardingagency or pass-through entity.§ 200.9 Central service cost allocationplan.§200.3 Advance payment.Advance payment means a paymentthat a Federal awarding agency orpass-through entity makes by any appropriate payment mechanism, including a predetermined payment schedule,before the non-Federal entity disbursesthe funds for program purposes.wreier-aviles on DSK5TPTVN1PROD with CFRAudit finding.Audit finding means deficiencieswhich the auditor is required by§ 200.516 Audit findings, paragraph (a)to report in the schedule of findingsand questioned costs.Central service cost allocation planmeans the documentation identifying,accumulating, and allocating or developing billing rates based on the allowable costs of services provided by astate, local government, or Indian tribeon a centralized basis to its departments and agencies. The costs of theseservices may be allocated or billed tousers.§ 200.4 Allocation.Allocation means the process of assigning a cost, or a group of costs, toone or more cost objective(s), in reasonable proportion to the benefit provided or other equitable relationship.The process may entail assigning acost(s) directly to a final cost objectiveor through one or more intermediatecost objectives.§ 200.10 Catalog of Federal DomesticAssistance (CFDA) number.CFDA number means the number assigned to a Federal program in theCFDA.81VerDate Mar 15 201014:08 Mar 14, 2014Jkt 232005PO 00000Frm 00091Fmt 8010Sfmt 8010Y:\SGML\232005.XXX232005

§ 200.11§ 200.112 CFR Ch. II (1–1–14 Edition)tities to which specific provisions orexceptions may apply.CFDA program title.CFDA program title means the title ofthe program under which the Federalaward was funded in the CFDA.§ 200.12§ 200.16 Closeout.Closeout means the process by whichthe Federal awarding agency or passthrough entity determines that all applicable administrative actions and allrequired work of the Federal awardhave been completed and takes actionsas described in § 200.343 Closeout.Capital assets.Capital assets means tangible or intangible assets used in operations having a useful life of more than one yearwhich are capitalized in accordancewith GAAP. Capital assets include:(a) Land, buildings (facilities), equipment, and intellectual property (including software) whether acquired bypurchase, construction, manufacture,lease-purchase, exchange, or throughcapital leases; and(b) Additions, improvements, modifications,replacements,rearrangements, reinstallations, renovations oralterations to capital assets that materially increase their value or useful life(not ordinary repairs and maintenance).§ 200.13§ 200.17 Cluster of programs.Cluster of programs means a groupingof closely related programs that sharecommon compliance requirements. Thetypes of clusters of programs are research and development (R&D), studentfinancial aid (SFA), and other clusters.‘‘Other clusters’’ are as defined by OMBin the compliance supplement or asdesignated by a state for Federalawards the state provides to its subrecipients that meet the definition of acluster of programs. When designatingan ‘‘other cluster,’’ a state must identify the Federal awards included in thecluster and advise the subrecipients ofcompliance requirements applicable tothe cluster, consistent with § 200.331Requirements for pass-through entities, paragraph (a). A cluster of programs must be considered as one program for determining major programs,as described in § 200.518 Major programdetermination, and, with the exceptionof R&D as described in § 200.501 Auditrequirements, paragraph (c), whether aprogram-specific audit may be elected.Capital expenditures.Capital expenditures means expenditures to acquire capital assets or expenditures to make additions, improvements, modifications, replacements,rearrangements, reinstallations, renovations, or alterations to capital assets that materially increase theirvalue or useful life.§ 200.14Claim.wreier-aviles on DSK5TPTVN1PROD with CFRClaim means, depending on the context, either:(a) A written demand or written assertion by one of the parties to a Federal award seeking as a matter ofright:(1) The payment of money in a sumcertain;(2) The adjustment or interpretationof the terms and conditions of the Federal award; or(3) Other relief arising under or relating to a Federal award.(b) A request for payment that is notin dispute when submitted.§ 200.18 Cognizant agency for audit.Cognizant agency for audit means theFederal agency designated to carry outtheresponsibilitiesdescribedin§ 200.513 Responsibilities, paragraph (a).The cognizant agency for audit is notnecessarily the same as the cognizantagency for indirect costs. A list of cognizant agencies for audit may be foundat the FAC Web site.§ 200.19 Cognizant agency for indirectcosts.Cognizant agency for indirect costsmeans the Federal agency responsiblefor reviewing, negotiating, and approving cost allocation plans or indirectcost proposals developed under thispart on behalf of all Federal agencies.§ 200.15 Class of Federal awards.Class of Federal awards means a groupof Federal awards either awarded undera specific program or group of programs or to a specific type of non-Federal entity or group of non-Federal en-82VerDate Mar 15 201014:08 Mar 14, 2014Jkt 232005PO 00000Frm 00092Fmt 8010Sfmt 8010Y:\SGML\232005.XXX232005

OMB Guidance§ 200.25The cognizant agency for indirect costis not necessarily the same as the cognizant agency for audit. For assignments of cognizant agencies see thefollowing:(a) For IHEs: Appendix III to Part200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of HigherEducation (IHEs), paragraph C.10.(b) For nonprofit organizations: Appendix IV to Part 200—Indirect (F&A)Costs Identification and Assignment,and Rate Determination for NonprofitOrganizations, paragraph C.1.(c) For state and local governments:Appendix V to Part 200—State/LocalGovernment and Indian Tribe-WideCentral Service Cost Allocation Plans,paragraph F.1.tween a Federal awarding agency orpass-through entity and a non-Federalentity that, consistent with 31 U.S.C.6302–6305:(a) Is used to enter into a relationship the principal purpose of which isto transfer anything of value from theFederal awarding agency or passthrough entity to the non-Federal entity to carry out a public purpose authorized by a law of the United States(see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal government or pass-through entity’s direct benefit or use;(b) Is distinguished from a grant inthat it provides for substantial involvement between the Federal awardingagency or pass-through entity and thenon-Federal entity in carrying out theactivity contemplated by the Federalaward.(c) The term does not include:(1) A cooperative research and development agreement as defined in 15U.S.C. 3710a; or(2) An agreement that provides only:(i) Direct United States Governmentcash assistance to an individual;(ii) A subsidy;(iii) A loan;(iv) A loan guarantee; or(v) Insurance.§ 200.20 Computing devices.Computing devices means machinesused to acquire, store, analyze, process,and publish data and other informationelectronically, including accessories(or ‘‘peripherals’’) for printing, transmitting and receiving, or storing electronic information. See also §§ 200.94Supplies and 200.58 Information technology systems.§ 200.21 Compliance supplement.Compliance supplement means Appendix XI to Part 200—Compliance Supplement (previously known as the Circular A–133 Compliance Supplement).§ 200.25§ 200.22 Contract.Contract means a legal instrument bywhich a non-Federal entity purchasesproperty or services needed to carryout the project or program under aFederal award. The term as used inthis part does not include a legal instrument, even if the non-Federal entity considers it a contract, when thesubstance of the transaction meets thedefinition of a Federal award orsubaward (see § 200.92 Subaward).wreier-aviles on DSK5TPTVN1PROD with CFRCooperative audit resolution.Cooperative audit resolution means theuse of audit follow-up techniques whichpromote prompt corrective action byimproving communication, fosteringcollaboration, promoting trust, and developing an understanding between theFederal agency and the non-Federal entity. This approach is based upon:(a) A strong commitment by Federalagency and non-Federal entity leadership to program integrity;(b) Federal agencies strengtheningpartnerships and working cooperatively with non-Federal entities andtheir auditors; and non-Federal entities and their auditors working cooperatively with Federal agencies;(c) A focus on current conditions andcorrective action going forward;(d) Federal agencies offering appropriate relief for past noncompliancewhen audits show prompt correctiveaction has occurred; and§ 200.23 Contractor.Contractor means an entity that receives a contract as defined in § 200.22Contract.§ 200.24 Cooperative agreement.Cooperative agreement means a legalinstrument of financial assistance be-83VerDate Mar 15 201014:08 Mar 14, 2014Jkt 232005PO 00000Frm 00093Fmt 8010Sfmt 8010Y:\SGML\232005.XXX232005

§ 200.262 CFR Ch. II (1–1–14 Edition)ty determines to be unallowable, in accordance with the applicable Federalstatutes, regulations, or the terms andconditions of the Federal award.(e) Federal agency leadership sendinga clear message that continued failureto correct conditions identified by audits which are likely to cause improperpayments, fraud, waste, or abuse is unacceptable and will result in sanctions.§ 200.32 Data Universal NumberingSystem (DUNS) number.DUNS number means the nine-digitnumber established and assigned byDun and Bradstreet, Inc. (D&B) touniquely identify entities. A non-Federal entity is required to have a DUNSnumber in order to apply for, receive,and report on a Federal award. A DUNSnumber may be obtained from D&B bytelephone (currently 866–705–5711) orthe Internet (currently at http://fedgov.dnb.com/webform).§ 200.26 Corrective action.Corrective action means action takenby the auditee that:(a) Corrects identified deficiencies;(b) Produces recommended improvements; or(c) Demonstrates that audit findingsare either invalid or do not warrantauditee action.§ 200.27 Cost allocation plan.Cost allocation plan means centralservice cost allocation plan or publicassistance cost allocation plan.§ 200.33 Equipment.Equipment means tangible personalproperty (including information technology systems) having a useful life ofmore than one year and a per-unit acquisition cost which equals or exceedsthe lesser of the capitalization level established by the non-Federal entity forfinancial statement purposes, or 5,000.See also §§ 200.12 Capital assets, 200.20Computing devices, 200.48 General purpose equipment, 200.58 Informationtechnology systems, 200.89 Special purpose equipment, and 200.94 Supplies.§ 200.28 Cost objective.Cost objective means a program, function, activity, award, organizationalsubdivision, contract, or work unit forwhich cost data are desired and forwhich provision is made to accumulateand measure the cost of processes,products, jobs, capital projects, etc. Acost objective may be a major functionof the non-Federal entity, a particularservice or project, a Federal award, oran indirect (Facilities & Administrative (F&A)) cost activity, as describedin Subpart E—Cost Principles of thisPart. See also §§ 200.44 Final cost objective and 200.60 Intermediate cost objective.§ 200.34 Expenditures.Expenditures means charges made bya non-Federal entity to a project orprogram for which a Federal award wasreceived.(a) The charges may be reported on acash or accrual basis, as long as themethodology is disclosed and is consistently applied.(b) For reports prepared on a cashbasis, expenditures are the sum of:(1) Cash disbursements for directcharges for property and services;(2) The amount of indirect expensecharged;(3) The value of third-party in-kindcontributions applied; and(4) The amount of cash advance payments and payments made to subrecipients.(c) For reports prepared on an accrual basis, expenditures are the sumof:(1) Cash disbursements for directcharges for property and services;§ 200.29 Cost sharing or matching.Cost sharing or matching means theportion of project costs not paid byFederal funds (unless otherwise authorized by Federal statute). See also§ 200.306 Cost sharing or matching.wreier-aviles on DSK5TPTVN1PROD with CFR§ 200.30 Cross-cutting audit finding.Cross-cutting audit finding means anaudit finding where the same underlying condition or issue affects Federalawards of more than one Federalawarding agency or pass-through entity.§ 200.31 Disallowed costs.Disallowed costs means those chargesto a Federal award that the Federalawarding agency or pass-through enti-84VerDate Mar 15 201014:08 Mar 14, 2014Jkt 232005PO 00000Frm 00094Fmt 8010Sfmt 8010Y:\SGML\232005.XXX232005

OMB Guidance§ 200.40through entity, as described in § 200.101Applicability.(b) The instrument setting forth theterms and conditions. The instrumentis the grant agreement, cooperativeagreement, other agreement for assistance covered in paragraph (b) of § 200.40Federal financial assistance, or thecost-reimbursement contract awardedunder the Federal Acquisition Regulations.(c) Federal award does not includeother contracts that a Federal agencyuses to buy goods or services from acontractor or a contract to operateFederal government owned, contractoroperated facilities (GOCOs).(d) See also definitions of Federal financial assistance, grant agreement,and cooperative agreement.(2) The amount of indirect expenseincurred;(3) The value of third-party in-kindcontributions applied; and(4) The net increase or decrease inthe amounts owed by the non-Federalentity for:(i) Goods and other property received;(ii) Services performed by employees,contractors, subrecipients, and otherpayees; and(iii) Programs for which no currentservices or performance are requiredsuch as annuities, insurance claims, orother benefit payments.§ 200.35Federal agency.Federal agency means an ‘‘agency’’ asdefined at 5 U.S.C. 551(1) and furtherclarified by 5 U.S.C. 552(f).§ 200.39 Federal award date.Federal award date means the datewhen the Federal award is signed bythe authorized official of the Federalawarding agency.§ 200.36 Federal Audit Clearinghouse(FAC).FAC means the clearinghouse designated by OMB as the repository ofrecord where non-Federal entities arerequired to transmit the reportingpackages required by Subpart F—AuditRequirements of this part. The mailingaddress of the FAC is Federal AuditClearingh

Subpart F—Audit Requirements GENERAL 200.500 Purpose. AUDITS 200.501 Audit requirements. 200.502 Basis for determining Federal awards expended. 200.503 Relation to other audit require-ments. 200.504 Frequency of audits. 200.505 Sanctions. 200.506 Audit costs. 200.507 Program-specific audits. AUDITEES 200.508 Auditee responsibilities.