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Type A Low-Risk Program Test (2 CFR 200.518(c))

What do these figures come to once the work is shown?

Checks a Type A program against each low-risk condition, including the 5 percent questioned cost test, and says whether it must be audited as major.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Low-risk Type A program
Yes
2 CFR 200.518(c)
Against 100%
Questioned costs as % of program3.53%
All results
MeasureResult
Questioned costs as % of program
Fails above 5%
3.53%
Low-risk Type A programYes
ReasonsAll conditions met
Audit as major program this periodNot required by step two
How this was worked out
Work shownrecomputed as you type
Low-risk only if audited as major in one of the two most recent periods, and in the most recent period: no material weakness, no modified opinion, and questioned costs not above 5% of expenditures
No significantly increased risk from 200.519(c), follow-up, or personnel and systems changes
No OMB-approved agency notice under 200.518(c)(2)

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Low-risk only if audited as major in one of the two most recent periods, and in the most recent period: no material weakness, no modified opinion, and questioned costs not above 5% of expenditures
  • No significantly increased risk from 200.519(c), follow-up, or personnel and systems changes
  • No OMB-approved agency notice under 200.518(c)(2)

How it works

2 CFR 200.518(c)(1) sets the step-two test for each Type A program. The program must have been audited as major in at least one of the two most recent audit periods (the most recent period for a biennial audit). In the most recent period it must not have had a material weakness in the report on internal control for major programs, a modified opinion on the program, or known or likely questioned costs above five percent of its federal awards expended.

The auditor also considers whether the criteria in 200.519(c), audit follow-up, or changes in personnel or systems show significantly increased risk. Under (c)(2), OMB can approve an agency request that a program not be low-risk for a recipient, with notice at least 180 days before the fiscal year end. Type A programs that are not low-risk are audited as major under 200.518(e)(1).

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Is this the same as a low-risk auditee?

No. Low-risk auditee status under 200.520 is for the whole entity and sets the 20% coverage rule. This test is program by program.

Does the 5% test use known or likely costs?

Either one. The program fails when known or likely questioned costs exceed 5 percent, so test the likely amount, which includes the known amount.

What about a new Type A program?

A program not audited as major in either of the two most recent periods cannot be low-risk, so it is audited as major.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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