Audit Threshold Raised
October 9, 2024
Funds disbursed through the CACFP are considered “Federal Awards.” All non-federal entities, such as State agencies and institutions, that receive federal awards must have an audit conducted each year. However, there is a threshold for the dollar amount of federal awards obtained before the audit is required. Previously the threshold was set at $750,000, meaning that every CACFP State agency and sponsoring organization who received more than $750,000 in reimbursement over the course of the year was required to be audited. However, a recent Federal Financial Assistance Rule by the Office of Management in Budget increased the threshold to $1,000,000.
Why It Matters
Sponsoring organizations and centers that exceed the audit threshold are responsible for financing the audit themselves. These audits can be costly and some institutions are not able to afford this expense. For this reason, some sponsoring organizations have been forced to limit their recruitment of providers to their sponsorship, in order to ensure their CACFP reimbursement did not exceed the $750,000 threshold. The increase in the threshold to $1,000,000 will allow these sponsors to grow their business by 25%, without having to worry about their ability to afford an audit.
Regulation
2 CFR, Part 200, Subpart F - Audit Requirements
"(a) Audit required. A non-Federal entity that expends $1,000,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part."
For questions, contact policy@cacfp.org.