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Page 36 of 53 (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] 8. REMEDIES FOR NONCOMPLIANCE (2 CFR 200.338) 200.338 Remedies for noncompliance. If a non -Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency or pass -through entity may impose additional conditions, as described in 200.207 Specific conditions. If the Federal awarding agency or pass -through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or pass -through entity may take one or more of the following actions, as appropriate in the circumstances: (a) Temporarily withhold cash payments pending correction of the deficiency by the non - Federal entity or more severe enforcement action by the Federal awarding agency or pass -through entity. Agreement No. MOAP00077 Agreement Template 20 C -38 (03/2019)