Home / Resources / 2 CFR 200.516 explained
Updated August 2026
Not everything an auditor mentions is a finding. §200.516 is the list of things they have no choice but to write down.
If your nonprofit gets a Single Audit, §200.516 tells the auditor what must go into the schedule of findings and questioned costs. Knowing the list tells you what to prevent, and tells you when something is genuinely a finding rather than a suggestion.
The control side. §200.303 is what you were supposed to have in place.
The rules side.
Reported where known questioned costs are greater than the threshold, and also where known costs plus likely questioned costs exceed it.
Auditors are not required to go looking, but must report what they find.
If the report is qualified, adverse, or disclaimed, the circumstances get written down.
Unless it is otherwise reported.
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). Verified against eCFR on 29 August 2026. Several thresholds in Part 200 moved in the 2024 revision, so check the current text before you write a figure into a policy.
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.
Item seven exists because organizations describe findings as fixed when they are not.
A questioned cost repaid with no process change comes back as a repeat finding.
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.
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2 CFR 200.516 requires the auditor to report significant deficiencies and material weaknesses in internal control over major programs, material noncompliance with federal statutes, regulations or award terms, known questioned costs above the threshold, the reasons for any compliance opinion other than unmodified, known or likely fraud affecting a federal award, and a materially misstated summary of prior audit findings.
$25,000. 2 CFR 200.516(a)(3) requires reporting known questioned costs where known or likely questioned costs are greater than $25,000 for a type of compliance requirement in a major program. Paragraph (a)(4) applies the same figure to a program not audited as major. Verified against eCFR in August 2026.
No. A questioned cost is one the auditor has identified as potentially unallowable. Whether it becomes a disallowed cost you have to repay is decided by the federal awarding agency in its management decision, not by the auditor.
You prepare a corrective action plan, the awarding agency issues a management decision, and the finding appears in your summary of prior audit findings the following year. If that summary materially misstates the status of the finding, 2 CFR 200.516 makes the misstatement itself a reportable finding.
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Sources: 2 CFR Part 200 (eCFR), read 29 August 2026. Federal grant rules change; check the current text before relying on this.