{"identifier":"/us/usc/t31/s7501","title":31,"num":"\u00a7\u202f7501.","heading":"Definitions","text":"\u00a7\u202f7501.\nDefinitions\n(a) As used in this chapter, the term\u2014\n(1) \u201cComptroller General\u201d means the Comptroller General of the United States;\n(2) \u201cDirector\u201d means the Director of the Office of Management and Budget;\n(3) \u201cFederal agency\u201d has the same meaning as the term \u201cagency\u201d in\nsection 551(1) of title 5\n(4) \u201cFederal awards\u201d means Federal financial assistance and Federal cost-reimbursement contracts that non-Federal entities receive directly from Federal awarding agencies or indirectly from pass-through entities;\n(5) \u201cFederal financial assistance\u201d means assistance that non-Federal entities receive or administer in the form of grants, loans, loan guarantees, property, cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, or other assistance, but does not include amounts received as reimbursement for services rendered to individuals in accordance with guidance issued by the Director;\n(6) \u201cFederal program\u201d means all Federal awards to a non-Federal entity assigned a single number in the Catalog of Federal Domestic Assistance or encompassed in a group of numbers or other category as defined by the Director;\n(7) \u201cgenerally accepted government auditing standards\u201d means the government auditing standards issued by the Comptroller General;\n(8) \u201cindependent auditor\u201d means\u2014\n(A) an external State or local government auditor who meets the independence standards included in generally accepted government auditing standards; or\n(B) a public accountant who meets such independence standards;\n(9) \u201cIndian tribe\u201d means any Indian tribe, band, nation, or other organized group or community, including any Alaskan Native village or regional or village corporation (as defined in, or established under, the Alaskan Native Claims Settlement Act) that is recognized by the United States as eligible for the special programs and services provided by the United States to Indians because of their status as Indians;\n(10) \u201cinternal controls\u201d means a process, effected by an entity\u2019s management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:\n(A) Effectiveness and efficiency of operations.\n1\n1 So in original.\n(B) Reliability of financial reporting.\n1\n(C) Compliance with applicable laws and regulations;\n(11) \u201clocal government\u201d means any unit of local government within a State, including a county, borough, municipality, city, town, township, parish, local public authority, special district, school district, intrastate district, council of governments, any other instrumentality of local government and, in accordance with guidelines issued by the Director, a group of local governments;\n(12) \u201cmajor program\u201d means a Federal program identified in accordance with risk-based criteria prescribed by the Director under this chapter, subject to the limitations described under subsection (b);\n(13) \u201cnon-Federal entity\u201d means a State, local government, or nonprofit organization;\n(14) \u201cnonprofit organization\u201d means any corporation, trust, association, cooperative, or other organization that\u2014\n(A) is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest;\n(B) is not organized primarily for profit; and\n(C) uses net proceeds to maintain, improve, or expand the operations of the organization;\n(15) \u201cpass-through entity\u201d means a non-Federal entity that provides Federal awards to a subrecipient to carry out a Federal program;\n(16) \u201cprogram-specific audit\u201d means an audit of one Federal program;\n(17) \u201crecipient\u201d means a non-Federal entity that receives awards directly from a Federal agency to carry out a Federal program;\n(18) \u201csingle audit\u201d means an audit, as described under section 7502(d), of a non-Federal entity that includes the entity\u2019s financial statements and Federal awards;\n(19) \u201cState\u201d means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the Trust Territory of the Pacific Islands, any instrumentality thereof, any multi-State, regional, or interstate entity which has governmental functions, and any Indian tribe; and\n(20) \u201csubrecipient\u201d means a non-Federal entity that receives Federal awards through another non-Federal entity to carry out a Federal program, but does not include an individual who receives financial assistance through such awards.\n(b) In prescribing risk-based program selection criteria for major programs, the Director shall not require more programs to be identified as major for a particular non-Federal entity, except as prescribed under subsection (c) or as provided under subsection (d), than would be identified if the major programs were defined as any program for which total expenditures of Federal awards by the non-Federal entity during the applicable year exceed\u2014\n(1) the larger of $30,000,000 or 0.15 percent of the non-Federal entity\u2019s total Federal expenditures, in the case of a non-Federal entity for which such total expenditures for all programs exceed $10,000,000,000;\n(2) the larger of $3,000,000, or 0.30 percent of the non-Federal entity\u2019s total Federal expenditures, in the case of a non-Federal entity for which such total expenditures for all programs exceed $100,000,000 but are less than or equal to $10,000,000,000; or\n(3) the larger of $300,000, or 3 percent of such total Federal expenditures for all programs, in the case of a non-Federal entity for which such total expenditures for all programs equal or exceed $300,000 but are less than or equal to $100,000,000.\n(c) When the total expenditures of a non-Federal entity\u2019s major programs are less than 50 percent of the non-Federal entity\u2019s total expenditures of all Federal awards (or such lower percentage as specified by the Director), the auditor shall select and test additional programs as major programs as necessary to achieve audit coverage of at least 50 percent of Federal expenditures by the non-Federal entity (or such lower percentage as specified by the Director), in accordance with guidance issued by the Director.\n(d) Loan or loan guarantee programs, as specified by the Director, shall not be subject to the application of subsection (b).","url":"https://projectusc.org/usc/t31/s7501.html","content":[{"t":"sec","id":"/us/usc/t31/s7501","children":[{"t":"num","text":"\u00a7\u202f7501."},{"t":"heading","text":"Definitions"},{"t":"subsec","id":"/us/usc/t31/s7501/a","children":[{"t":"num","text":"(a)"},{"t":"chapeau","text":" As used in this chapter, the term\u2014"},{"t":"para","id":"/us/usc/t31/s7501/a/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" \u201cComptroller General\u201d means the Comptroller General of the United States;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" \u201cDirector\u201d means the Director of the Office of Management and Budget;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/3","children":[{"t":"num","text":"(3)"},{"t":"content","text":" \u201cFederal agency\u201d has the same meaning as the term \u201cagency\u201d in ","children":[{"t":"ref","text":"section 551(1) of title 5","href":"/us/usc/t5/s551/1","tail":";"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/4","children":[{"t":"num","text":"(4)"},{"t":"content","text":" \u201cFederal awards\u201d means Federal financial assistance and Federal cost-reimbursement contracts that non-Federal entities receive directly from Federal awarding agencies or indirectly from pass-through entities;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/5","children":[{"t":"num","text":"(5)"},{"t":"content","text":" \u201cFederal financial assistance\u201d means assistance that non-Federal entities receive or administer in the form of grants, loans, loan guarantees, property, cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, or other assistance, but does not include amounts received as reimbursement for services rendered to individuals in accordance with guidance issued by the Director;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/6","children":[{"t":"num","text":"(6)"},{"t":"content","text":" \u201cFederal program\u201d means all Federal awards to a non-Federal entity assigned a single number in the Catalog of Federal Domestic Assistance or encompassed in a group of numbers or other category as defined by the Director;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/7","children":[{"t":"num","text":"(7)"},{"t":"content","text":" \u201cgenerally accepted government auditing standards\u201d means the government auditing standards issued by the Comptroller General;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/8","children":[{"t":"num","text":"(8)"},{"t":"chapeau","text":" \u201cindependent auditor\u201d means\u2014"},{"t":"subpara","id":"/us/usc/t31/s7501/a/8/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" an external State or local government auditor who meets the independence standards included in generally accepted government auditing standards; or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t31/s7501/a/8/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" a public accountant who meets such independence standards;","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/9","children":[{"t":"num","text":"(9)"},{"t":"content","text":" \u201cIndian tribe\u201d means any Indian tribe, band, nation, or other organized group or community, including any Alaskan Native village or regional or village corporation (as defined in, or established under, the Alaskan Native Claims Settlement Act) that is recognized by the United States as eligible for the special programs and services provided by the United States to Indians because of their status as Indians;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/10","children":[{"t":"num","text":"(10)"},{"t":"chapeau","text":" \u201cinternal controls\u201d means a process, effected by an entity\u2019s management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:"},{"t":"subpara","id":"/us/usc/t31/s7501/a/10/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" Effectiveness and efficiency of operations.","children":[{"t":"ref","text":"1"},{"t":"num","text":"1","tail":"\u202fSo in original."},{"t":"text","text":"\u202fSo in original."}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t31/s7501/a/10/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" Reliability of financial reporting.","children":[{"t":"text","text":"1"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t31/s7501/a/10/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" Compliance with applicable laws and regulations;","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/11","children":[{"t":"num","text":"(11)"},{"t":"content","text":" \u201clocal government\u201d means any unit of local government within a State, including a county, borough, municipality, city, town, township, parish, local public authority, special district, school district, intrastate district, council of governments, any other instrumentality of local government and, in accordance with guidelines issued by the Director, a group of local governments;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/12","children":[{"t":"num","text":"(12)"},{"t":"content","text":" \u201cmajor program\u201d means a Federal program identified in accordance with risk-based criteria prescribed by the Director under this chapter, subject to the limitations described under subsection (b);","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/13","children":[{"t":"num","text":"(13)"},{"t":"content","text":" \u201cnon-Federal entity\u201d means a State, local government, or nonprofit organization;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/14","children":[{"t":"num","text":"(14)"},{"t":"chapeau","text":" \u201cnonprofit organization\u201d means any corporation, trust, association, cooperative, or other organization that\u2014"},{"t":"subpara","id":"/us/usc/t31/s7501/a/14/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest;","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t31/s7501/a/14/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" is not organized primarily for profit; and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t31/s7501/a/14/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" uses net proceeds to maintain, improve, or expand the operations of the organization;","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/15","children":[{"t":"num","text":"(15)"},{"t":"content","text":" \u201cpass-through entity\u201d means a non-Federal entity that provides Federal awards to a subrecipient to carry out a Federal program;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/16","children":[{"t":"num","text":"(16)"},{"t":"content","text":" \u201cprogram-specific audit\u201d means an audit of one Federal program;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/17","children":[{"t":"num","text":"(17)"},{"t":"content","text":" \u201crecipient\u201d means a non-Federal entity that receives awards directly from a Federal agency to carry out a Federal program;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/18","children":[{"t":"num","text":"(18)"},{"t":"content","text":" \u201csingle audit\u201d means an audit, as described under section 7502(d), of a non-Federal entity that includes the entity\u2019s financial statements and Federal awards;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/19","children":[{"t":"num","text":"(19)"},{"t":"content","text":" \u201cState\u201d means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the Trust Territory of the Pacific Islands, any instrumentality thereof, any multi-State, regional, or interstate entity which has governmental functions, and any Indian tribe; and","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/a/20","children":[{"t":"num","text":"(20)"},{"t":"content","text":" \u201csubrecipient\u201d means a non-Federal entity that receives Federal awards through another non-Federal entity to carry out a Federal program, but does not include an individual who receives financial assistance through such awards.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t31/s7501/b","children":[{"t":"num","text":"(b)"},{"t":"chapeau","text":" In prescribing risk-based program selection criteria for major programs, the Director shall not require more programs to be identified as major for a particular non-Federal entity, except as prescribed under subsection (c) or as provided under subsection (d), than would be identified if the major programs were defined as any program for which total expenditures of Federal awards by the non-Federal entity during the applicable year exceed\u2014"},{"t":"para","id":"/us/usc/t31/s7501/b/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" the larger of $30,000,000 or 0.15 percent of the non-Federal entity\u2019s total Federal expenditures, in the case of a non-Federal entity for which such total expenditures for all programs exceed $10,000,000,000;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/b/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" the larger of $3,000,000, or 0.30 percent of the non-Federal entity\u2019s total Federal expenditures, in the case of a non-Federal entity for which such total expenditures for all programs exceed $100,000,000 but are less than or equal to $10,000,000,000; or","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t31/s7501/b/3","children":[{"t":"num","text":"(3)"},{"t":"content","text":" the larger of $300,000, or 3 percent of such total Federal expenditures for all programs, in the case of a non-Federal entity for which such total expenditures for all programs equal or exceed $300,000 but are less than or equal to $100,000,000.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t31/s7501/c","children":[{"t":"num","text":"(c)"},{"t":"content","text":" When the total expenditures of a non-Federal entity\u2019s major programs are less than 50 percent of the non-Federal entity\u2019s total expenditures of all Federal awards (or such lower percentage as specified by the Director), the auditor shall select and test additional programs as major programs as necessary to achieve audit coverage of at least 50 percent of Federal expenditures by the non-Federal entity (or such lower percentage as specified by the Director), in accordance with guidance issued by the Director.","tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t31/s7501/d","children":[{"t":"num","text":"(d)"},{"t":"content","text":" Loan or loan guarantee programs, as specified by the Director, shall not be subject to the application of subsection (b).","tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}