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Title 31 — Money and FinanceRelease 119-73

§7505 Regulations

Title 31 › Subtitle SUBTITLE V— - GENERAL ASSISTANCE ADMINISTRATION › Chapter CHAPTER 75— - REQUIREMENTS FOR SINGLE AUDITS › § 7505

Last updated Apr 6, 2026|Official source

Summary

The Director must create guidance, after talking with the Comptroller General and other federal, state, local, and nonprofit officials, to put this chapter into practice. Each federal agency must change its own rules to match that guidance and the chapter. The guidance must say when audit costs can be charged to federal awards. It must stop non‑federal entities from charging audits that were not done under this chapter, or that came from awards below the spending thresholds in sections 7502(a)(1)(A) or 7502(a)(3) (except limited scope audits to check subrecipients under section 7502(f)(2)(B)). It must also limit charges so the share billed to federal awards is reasonably proportional, and generally no more than the ratio of federal award spending to the entity’s total spending unless higher actual costs are shown. The guidance must also give small, HUBZone, and disadvantaged‑owned small businesses a fair chance to do audit contracts, and require audit reports to be filed electronically under the data standards in chapter 64.

Full Legal Text

Title 31, §7505

Money and Finance — Source: USLM XML via OLRC

(a)The Director, after consultation with the Comptroller General, and appropriate officials from Federal, State, and local governments and nonprofit organizations shall prescribe guidance to implement this chapter. Each Federal agency shall promulgate such amendments to its regulations as may be necessary to conform such regulations to the requirements of this chapter and of such guidance.
(b)(1)The guidance prescribed pursuant to subsection (a) shall include criteria for determining the appropriate charges to Federal awards for the cost of audits. Such criteria shall prohibit a non-Federal entity from charging to any Federal awards—
(A)the cost of any audit which is—
(i)not conducted in accordance with this chapter; or
(ii)conducted in accordance with this chapter when expenditures of Federal awards are less than amounts cited in section 7502(a)(1)(A) or specified by the Director under section 7502(a)(3), except that the Director may allow the cost of limited scope audits to monitor subrecipients in accordance with section 7502(f)(2)(B); and
(B)more than a reasonably proportionate share of the cost of any such audit that is conducted in accordance with this chapter.
(2)The criteria prescribed pursuant to paragraph (1) shall not, in the absence of documentation demonstrating a higher actual cost, permit the percentage of the cost of audits performed pursuant to this chapter charged to Federal awards, to exceed the ratio of total Federal awards expended by such non-Federal entity during the applicable fiscal year or years, to such non-Federal entity’s total expenditures during such fiscal year or years.
(c)Such guidance shall include such provisions as may be necessary to ensure that small business concerns, qualified HUBZone small business concerns, and business concerns owned and controlled by socially and economically disadvantaged individuals will have the opportunity to participate in the performance of contracts awarded to fulfill the audit requirements of this chapter.
(d)Such guidance shall require audit-related information reported under this chapter to be reported in an electronic form in accordance with the data standards established under chapter 64.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

2019—Subsec. (d). Pub. L. 116–103 added subsec. (d). 1997—Subsec. (c). Pub. L. 105–135 substituted “small business concerns, qualified HUBZone small business concerns, and” for “small business concerns and”. 1996—Pub. L. 104–156 reenacted section catchline without change and amended text generally, substituting present provisions for similar provisions relating to

Regulations

, including implementation guidelines for

Regulations

, criteria for determining appropriate charges to programs of Federal financial assistance for cost of audits, and guidelines to ensure that small business concerns and business concerns owned and controlled by socially and economically disadvantaged individuals have opportunity to participate in contracts awarded to fulfill audit requirements of this chapter.

Statutory Notes and Related Subsidiaries

Effective Date

of 1997 AmendmentAmendment by Pub. L. 105–135 effective Oct. 1, 1997, see section 3 of Pub. L. 105–135, set out as a note under section 631 of Title 15, Commerce and Trade. Guidance Pub. L. 116–103, § 5(b), Dec. 30, 2019, 133 Stat. 3270, provided that: “Not later than 3 years after the date of enactment of this Act [Dec. 30, 2019], the Director [of the Office of Management and Budget] shall issue guidance requiring audit-related information reported under chapter 75 of title 31, United States Code, to be reported in an electronic form consistent with the data standards established under chapter 64 of that title, as added by section 4(a) of this Act.” Guidelines for Acceptance of Audits by State and Local Governments Receiving Federal Assistance Pub. L. 104–201, div. A, title VIII, § 808(c), Sept. 23, 1996, 110 Stat. 2607, provided that: “The Director of the Office of Management and Budget shall issue guidelines to ensure that an audit of indirect costs performed by the Federal Government is accepted by State and local governments that receive Federal funds under contracts, grants, or other Federal assistance programs.”

Reference

Citations & Metadata

Citation

31 U.S.C. § 7505

Title 31 — Money and Finance

Last Updated

Apr 6, 2026

Release point: 119-73