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U.S. Code as of:
01/19/04
Section 7501. Definitions
(a) As used in this chapter, the term -
(1) "Comptroller General" means the Comptroller General of the
United States;
(2) "Director" means the Director of the Office of Management
and Budget;
(3) "Federal agency" has the same meaning as the term "agency"
in section 551(1) of title 5;
(4) "Federal awards" 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;
(5) "Federal financial assistance" 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;
(6) "Federal program" 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;
(7) "generally accepted government auditing standards" means
the government auditing standards issued by the Comptroller
General;
(8) "independent auditor" means -
(A) an external State or local government auditor who meets
the independence standards included in generally accepted
government auditing standards; or
(B) a public accountant who meets such independence
standards;
(9) "Indian tribe" 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;
(10) "internal controls" means a process, effected by an
entity's management and other personnel, designed to provide
reasonable assurance regarding the achievement of objectives in
the following categories:
(A) Effectiveness and efficiency of operations.(!1)
(B) Reliability of financial reporting.(!1)
(C) Compliance with applicable laws and regulations;
(11) "local government" 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;
(12) "major program" 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);
(13) "non-Federal entity" means a State, local government, or
nonprofit organization;
(14) "nonprofit organization" means any corporation, trust,
association, cooperative, or other organization that -
(A) is operated primarily for scientific, educational,
service, charitable, or similar purposes in the public
interest;
(B) is not organized primarily for profit; and
(C) uses net proceeds to maintain, improve, or expand the
operations of the organization;
(15) "pass-through entity" means a non-Federal entity that
provides Federal awards to a subrecipient to carry out a Federal
program;
(16) "program-specific audit" means an audit of one Federal
program;
(17) "recipient" means a non-Federal entity that receives
awards directly from a Federal agency to carry out a Federal
program;
(18) "single audit" means an audit, as described under section
7502(d), of a non-Federal entity that includes the entity's
financial statements and Federal awards;
(19) "State" 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
(20) "subrecipient" 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.
(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 -
(1) the larger of $30,000,000 or 0.15 percent of the
non-Federal entity's total Federal expenditures, in the case of a
non-Federal entity for which such total expenditures for all
programs exceed $10,000,000,000;
(2) the larger of $3,000,000, or 0.30 percent of the
non-Federal entity's 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
(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.
(c) When the total expenditures of a non-Federal entity's major
programs are less than 50 percent of the non-Federal entity's 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.
(d) Loan or loan guarantee programs, as specified by the
Director, shall not be subject to the application of subsection
(b).
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