Home / Resources / 2 CFR 200.516 explained
Plain-English guide · for nonprofits
2 CFR 200.516, explained in plain English
Updated October 2026
If you have a single audit, §200.516 lists what the auditor must report as a finding. That includes weak internal controls and serious rule breaks. It also covers questioned costs over $25,000, fraud, and a misstated summary of past findings.
What has to be reported
§200.516 sits in subpart F, the audit part of the Uniform Guidance. The auditor must put these seven things in the schedule of findings and questioned costs:
Significant deficiencies and material weaknesses in internal control over major programs
The control side. §200.303 is what you were supposed to have in place.
Material noncompliance with statutes, regulations, or award terms for a major program
The rules side.
Known questioned costs above the threshold in a major program
Reported where either known or likely questioned costs are greater than the threshold. It is two separate measurements against the same line, not a sum. Likely questioned costs already include the known ones, so adding them together double-counts and puts you over the line early.
Known questioned costs above the threshold in a program that was not audited as major
Auditors are not required to go looking, but must report what they find.
Why the compliance opinion was other than unmodified
If the report is qualified, adverse, or disclaimed, the circumstances get written down.
Known or likely fraud affecting a federal award
Unless it is otherwise reported.
A materially misstated summary of prior audit findings
If your own account of how you fixed last year's findings does not hold up, that is itself a finding.
The trigger is greater than $25,000, at paragraphs (a)(3) and (a)(4). Several thresholds in Part 200 moved in the 2024 revision, so check the current text before you write a figure into a policy.
What a finding actually costs you
A finding is not a fine. What it produces is a corrective action plan, a management decision from the awarding agency, and a place in next year's summary of prior findings, where item seven above waits for anyone who overstates the fix. Questioned costs may or may not become disallowed costs; that is the agency's call, not the auditor's.
The practical cost is reputational and administrative. Repeat findings are the ones that change how a funder sees you.
What to actually do
Read last year's schedule before this year's fieldwork
Item seven makes an overstated fix a finding of its own.
Fix the control, not the transaction
A questioned cost repaid with no process change comes back as a repeat finding.
Write the corrective action plan yourself
It is your document, not the auditor's, and it is what the agency reads.
This is general information, not legal or accounting advice. Federal grant rules change and are applied differently by different agencies and auditors. Check with your auditor, your grant officer, or an attorney before relying on any of it.
The Ember tool for thisEmber Grants
Ember Grants keeps every award, deadline and report in one place. You can see what you owe each funder, and when. Unlimited users on every tier.
Sources: 2 CFR Part 200 (eCFR), read 29 August 2026 and re-checked 1 September 2026. Federal grant rules change; check the current text before relying on this.