2 CFR 200 Uniform Guidance Overview: Subparts A to F After the 2024 Revision

2 CFR Part 200, titled Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the single rulebook that most federal grants and cooperative agreements run on. Recipients follow it when they spend the money. Pass-through entities follow it when they pass the money on. Auditors test against it in a single audit. This page maps the six subparts, summarizes the October 2024 revision, and points to the sections an audit team reaches for most often. For the filing step, see Federal Audit Clearinghouse filing. For the audit procedures, see the single audit walk-through.

What are the six subparts?

Applicability varies by subpart. Under 2 CFR 200.101, subparts A and B apply to all federal financial assistance, with stated exceptions. Subparts C and D apply to grants and cooperative agreements, and Subpart F applies only to non-Federal entities as defined in the Single Audit Act Amendments of 1996. Subpart F does not apply to for-profit organizations; a pass-through entity sets compliance requirements for a for-profit subrecipient in the subaward itself (200.501(i)).

What changed in the 2024 revision?

OMB published the revised guidance on April 22, 2024 (89 FR 30046). The effective date of the final guidance is October 1, 2024. Agencies could apply it to awards issued before that date, though not earlier than June 21, 2024, and were not required to. The audit provisions follow fiscal years rather than award dates. The changes that matter most to finance teams and auditors are these.

• Single audit threshold. The trigger rose from $750,000 to $1,000,000 of federal awards expended, for fiscal years beginning on or after October 1, 2024 (200.501(a)). A calendar-year entity first applies it to the year ended December 31, 2025.
• Equipment threshold. Equipment is tangible personal property with a useful life over one year and a per-unit cost at or above the lesser of the entity's capitalization level for financial statements or $10,000 (200.1). The previous federal figure was $5,000.
• De minimis indirect cost rate. An entity without a negotiated rate may elect up to 15 percent of modified total direct costs (200.414). The earlier ceiling was 10 percent. A pass-through entity may not require the de minimis rate for a subrecipient that holds a negotiated federal rate (200.332(b)(4)).
• Type A thresholds. The table in 200.518 starts at $1,000,000 for total federal awards expended up to $34 million, then steps through 3 percent of total, $3 million, 0.3 percent, $30 million and 0.15 percent of total.
• Subaward content. A pass-through entity must give each subrecipient a defined list of federal award identification data, including the UEI, FAIN and Assistance Listings number (200.332(b)).

Timing differs by item. Changes to indirect cost rates take effect when a new rate is negotiated (200.110(b)), and agencies were not required to apply the revision to earlier awards, so one entity can be running grants under both sets of rules in the same year. Check the award terms before applying either figure.

How do the subparts show up in an audit?

Subpart F is the audit rule, but the audit tests Subparts D and E.

Scope and reporting (200.514, 200.515, 200.516). The audit follows GAGAS and covers the auditee's entire operations or a series of audits of units that expended federal awards. The auditor tests internal control over major programs to support a low assessed level of control risk, tests compliance that may have a direct and material effect, and follows up on prior findings. Findings must be reported when they meet the criteria in 200.516, including known questioned costs over $25,000 for a type of compliance requirement in a major program.

Cost principles (Subpart E). Section 200.403 sets the allowability test. A cost must be necessary and reasonable and allocable to the award, conform to limits in the award, be treated consistently, follow GAAP except where Part 200 provides otherwise for state and local governments and Tribes, not be used to meet cost sharing on another award, and be adequately documented. Payroll charged to an award is tested against 200.430, and indirect charges against 200.414 and the entity's rate agreement.

Procurement (200.317 to 200.327). Formal, competitive procedures are required for purchases above the entity's simplified acquisition threshold (200.320(b)). Micro-purchases rely on a threshold the recipient documents based on internal controls, risk and its written procedures.

Subrecipient management (200.331, 200.332). The pass-through entity decides case by case whether the party receiving funds is a subrecipient or a contractor. Characteristics of a subrecipient include determining who is eligible for the assistance and carrying programmatic decision-making, among others. Payments to a contractor for goods or services are not federal awards expended under Subpart F (200.501(g)). The pass-through entity must verify the subrecipient is not excluded, flow down the required data, evaluate fraud and noncompliance risk, monitor, issue management decisions on audit findings related to its subaward and verify that a subrecipient is audited when Subpart F requires it.

Record retention (200.334). Records must be kept for three years from the date of submission of the final financial report, or of the annual report for awards renewed annually. They must be kept longer while litigation, claims or audit findings are unresolved, or when the agency or pass-through entity notifies the recipient in writing to extend the period. The FAC package carries its own three-year retention rule under 200.512(f).

Worked illustration: Type A and coverage

Illustrative numbers. A nonprofit has total federal awards expended of $40,000,000.

1. Total exceeds $34 million but not $100 million, so the Type A threshold is 3 percent of total: $40,000,000 x 0.03 = $1,200,000.
2. Any federal program above $1,200,000 is Type A. Smaller programs are Type B.
3. The auditor audits all Type A programs not low-risk under 200.518(c), plus high-risk Type B programs.
4. Coverage must reach at least 40 percent of total federal awards expended ($16,000,000), or 20 percent ($8,000,000) if the entity qualifies as a low-risk auditee under 200.520.

Now compare a small entity with $3,000,000 of expenditures. The Type A threshold is $1,000,000. The 20 percent coverage figure is $600,000 and the 40 percent figure is $1,200,000. The auditor must still follow the four-step process rather than choose programs informally.

Implementation problems worth planning for

Practice observations, not requirements:

• Pass-through awards booked as state grants. An entity records a state agency payment as state revenue when the money originated with a federal agency. The SEFA must include it. Ask for the award letter and look for the Assistance Listings number.
• Contractor or subrecipient. A vendor agreement that leaves the vendor in charge of eligibility decisions looks like a subaward. The wrong classification changes both the SEFA and the monitoring file.
• Mixed fiscal years. A fiscal year starting September 1, 2024 stays under the $750,000 threshold; one starting October 1, 2024 does not.
• Indirect cost basis. An entity elects the de minimis rate but applies it to a base that includes equipment or subaward amounts above the modified total direct cost limit. Read the definition of MTDC in 200.1 before accepting the allocation.
• Prior-year findings. The summary schedule of prior audit findings gets prepared in the last week, and the auditor must then assess its reasonableness under 200.514(e).

FAQ

Does 2 CFR 200 apply to for-profit companies?

Subparts A through E may apply to for-profit organizations as permitted in agency regulations or program statutes, under 200.101(a)(2). Subpart F, the audit subpart, does not apply to them. Contract and agreement terms govern.

Is a contractor's revenue counted for the $1,000,000 test?

No. Payments received for goods or services provided as a contractor under a federal award are not subject to audit under Part 200, as 200.501(g) states. The classification depends on the facts under 200.331.

Does a state or local government follow the same Subpart F rules as a nonprofit?

Yes, both are non-Federal entities under Subpart F. Some cost principles in Subpart E differ for states, local governments and Tribes, including the GAAP condition in 200.403(e).

Where is the Compliance Supplement?

The OMB Compliance Supplement is separate from Part 200. The auditor uses it under 200.514(d) to identify compliance requirements and audit procedures for the programs it covers, and for programs outside it the auditor follows the supplement's guidance for programs not included.

Sources

• eCFR, 2 CFR Part 200 (subparts A through F, including 200.1, 200.101, 200.110, 200.320, 200.331, 200.332, 200.334, 200.403, 200.414, 200.501, 200.502, 200.510, 200.511, 200.512, 200.514, 200.516, 200.518, 200.520): https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200
• Federal Register, Guidance for Federal Financial Assistance, 89 FR 30046 (April 22, 2024), effective October 1, 2024: https://www.federalregister.gov/d/2024-07496
• Federal Audit Clearinghouse, submission guide (thresholds by fiscal year): https://www.fac.gov/audit-resources/submission-guide/about/

Related

• Federal Audit Clearinghouse filing
• Single audit and Uniform Guidance walk-through
• Uniform Guidance glossary entry
• Yellow Book (GAGAS)
• Subrecipient monitoring checklist
• Single audit major program determination worksheet
• Nonprofit audit requirements

AU-C references are to AICPA Professional Standards, paraphrased here; read the standard itself before relying on a requirement. This page is guidance, not professional advice. Report an error