§7501 Definitions

Summary

Defines the words used for audits of federal money given to states, local governments, tribes, and nonprofits, and sets how to pick which federal programs are "major" based on how much money was spent. Comptroller General — the federal official called the Comptroller General; Director — the head of the Office of Management and Budget; Federal agency — has the same meaning as “agency” in another federal law; Federal awards — federal money and cost-reimbursement contracts given to non-federal groups, directly or through others; Federal financial assistance — federal help like grants, loans, loan guarantees, property, cooperative agreements, interest subsidies, insurance, food, direct appropriations, or similar support, but not reimbursements for services to individuals when the Director allows that by guidance; Federal program — all federal awards to one non-federal entity under one Catalog number or as the Director groups them; generally accepted government auditing standards — the government auditing rules set by the Comptroller General; independent auditor — an outside state/local government auditor or a public accountant who meets those independence rules; Indian tribe — any tribe, band, nation, or organized group (including Alaskan Native villages or corporations) recognized by the U.S. for special Indian programs; internal controls — management processes to give reasonable assurance about operations, financial reporting, and following laws; local government — any local unit in a State (counties, cities, towns, school districts, special districts, councils, and similar entities), and groups of local governments as the Director may allow; major program — a federal program picked by the Director using risk-based rules, subject to the limits below; non-Federal entity — a State, local government, or nonprofit; nonprofit organization — a corporation, trust, association, cooperative, or similar group run mainly for public-interest purposes, not for profit, and that uses extra funds to keep or grow the organization; pass-through entity — a non-federal entity that passes federal awards to a subrecipient; program-specific audit — an audit of one federal program; recipient — a non-federal entity that gets awards directly from a federal agency; single audit — an audit covering an entity’s financial statements and its federal awards as described in law; State — any State or listed U.S. territory, their instrumentalities, multi-State/regional/interstate entities with government functions, and any Indian tribe; subrecipient — a non-federal entity that gets federal awards through another non-federal entity to run a federal program (not an individual). When the Director sets risk-based rules to identify major programs, he must not require identifying more programs than would be found if “major” meant any program with total federal expenditures by the entity that exceed the larger of $30,000,000 or 0.15% when total federal spending is over $10,000,000,000; the larger of $3,000,000 or 0.30% when total federal spending is over $100,000,000 up to $10,000,000,000; or the larger of $300,000 or 3% when total federal spending is $300,000 up to $100,000,000. If the selected major programs cover less than 50% of the entity’s federal spending (or a lower percentage set by the Director), auditors must test more programs until they reach at least 50% (or the lower percentage). Loan or loan guarantee programs the Director specifies are not subject to the thresholds above.