---
kind: "section"
citation: "2 C.F.R. § 200.425"
title: "2"
number: "200.425"
heading: "Audit services."
url: "https://uscodex.org/cfr/2/200.425"
---

# §200.425. Audit services.

- (a) A reasonably proportionate share of the costs of audits required by and performed in accordance with the Single Audit Act Amendments of 1996 ([31 U.S.C. 7501-7507](/usc/31/7501-7507.md)), and the requirements of this part are allowable. However, the following audit costs are unallowable:
  - (1) Any costs when audits required by the Single Audit Act and subpart F of this part have not been conducted, or have been conducted but not in accordance with the requirements; and
  - (2) Except as provided for in [paragraph (c)](#c) of this section, any costs of auditing a non-Federal entity that is exempted from having an audit conducted under the Single Audit Act and [subpart F](/cfr/2/subpartF.md) of this part because its expenditures under Federal awards are less than $1,000,000 during its fiscal year.”
- (b) The costs of a financial statement audit of a recipient or subrecipient that does not currently have a Federal award may be included in the indirect cost pool for a cost allocation plan or indirect cost proposal.
- (c) Pass-through entities may charge Federal awards for the cost of agreed-upon procedures engagements to monitor subrecipients (in accordance with [§§ 200.331-333](/cfr/2/200.331-333.md)) exempt from having an audit conducted under the Single Audit Act and therequirements of this part. This cost is allowable only if the agreed-upon procedures engagements are:
  - (1) Conducted in accordance with GAGAS or applicable international attestation standards, as appropriate;
  - (2) Paid for and arranged by the pass-through entity; and
  - (3) **Limited in scope to one or more of the following types of compliance requirements—** activities allowed or unallowed; allowable costs/cost principles; eligibility; and reporting.

## Notes

### Authority

Authority: 31 U.S.C. 503; 31 U.S.C. 6101-6106; 31 U.S.C. 6307; 31 U.S.C. 7501-7507.

### Source

Source: 89 FR 30136, Apr. 22, 2024, unless otherwise noted.