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Page 36 of 52 Federal agency, or pass -through entity in the case of a subrecipient, approves in advance a program -specific audit. (d) Exemption when Federal awards expended are less than $750,000. A non -Federal entity that expends less than $750,000 during the non -Federal entity's fiscal year in Federal awards is exempt from Federal audit requirements for that year, except as noted in 200.503 Relation to other audit requirements, but records must be available for review or audit by appropriate officials of the Federal agency, pass -through entity, and Government Accountability Office (GAO). (e) Federally Funded Research and Development Centers (FFRDC). Management of an auditee that owns or operates a FFRDC may elect to treat the FFRDC as a separate entity for purposes of this part. (f) Subrecipients and Contractors. An auditee may simultaneously be a recipient, a subrecipient, and a contractor. Federal awards expended as a recipient or a subrecipient are subject to audit under this part. The payments received for goods or services provided as a contractor are not Federal awards. Section 200.330 Subrecipient and contractor determinations sets forth the considerations in determining whether payments constitute a Federal award or a payment for goods or services provided as a contractor. (g) Compliance responsibility for contractors. In most cases, the auditee's compliance responsibility for contractors is only to ensure that the procurement, receipt, and payment for goods and services comply with Federal statutes, regulations, and the terms and conditions of Federal awards. Federal award compliance requirements normally do not pass through to contractors. However, the auditee is responsible for ensuring compliance for procurement transactions which are structured such that the contractor is responsible for program compliance or the contractor's records must be reviewed to determine program compliance. Also, when these procurement transactions relate to a major program, the scope of the audit must include determining whether these transactions are in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. (h) For -profit subrecipient. Since this part does not apply to for -profit subrecipients, the pass - through entity is responsible for establishing requirements, as necessary, to ensure compliance by for -profit subrecipients. The agreement with the for -profit subrecipient must describe applicable compliance requirements and the for -profit subrecipient's compliance responsibility. Methods to ensure compliance for Federal awards made to for - profit subrecipients may include pre -award audits, monitoring during the agreement, and post -award audits. See also 200.331 Requirements for pass -through entities. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014] Agreement No. R18AP00081 Agreement Template 20 D-40 (03/2019)