Non-Federal Audit Requirements for Commercial (For-Profit) Organizations
1. What are the HHS audit requirements for commercial (For-Profit) organizations?
The Department of Health and Human Services (HHS) has specified requirements for non-Federal audits of for-profit (commercial) organizations in HHS' Title 45, Code of Federal Regulations (CFR), Part 75.501(h) through (k), "Non-Federal Audits." Per the regulations, a for-profit (commercial) organization is subject to audit requirements for a non-Federal audit if, during its fiscal year, it expended $750,000* or more under HHS awards and at least one award is a HHS grant or subgrant. Title 45 CFR Part 75 essentially incorporates the thresholds and deadlines of Office of Management and Budget (OMB) Uniform Guidance: Cost Principles, Audit, and Administrative Requirements for Federal Awards and provides for-profit organizations with two options regarding the type of audit that will satisfy the audit requirements either:
a financial related audit (as defined in the Government Auditing Standards, GPO Stock #020-000-00-265-4) of a particular award in accordance with Government Auditing Standards, in those cases where the recipient receives awards under only one HHS program; or, if awards are received under multiple HHS programs, a financial related audit of all HHS awards in accordance with Government Auditing Standards; or an audit that meets the requirements contained in Title 45 CFR Subpart F.
[* Note: The threshold was $500,000 for audits of fiscal years beginning prior to December 26, 2014.]
2. Do non-federal audit requirements for commercial organizations apply only to HHS grants?
3. How do you define “expended”?
4. Are fixed price contracts included in threshold calculations?
5. Are pass through dollars (i.e., dollars not received directly from HHS) included in the calculations?
6. What is expected if the Yellow Book option is selected?
7. What is the audit period?
8. How often is an audit required?
9. Who can perform the required audit? Can my internal auditor do it?
Who pays for the required audit?
11. What is the deadline for submission of the audit report(s)?
12. Do for-profit entities have to complete the data collection form?
13. Is the management letter to be submitted as part of the reporting package?
14. Where should audit reports of for-profit organizations be submitted?
Audit reports of for-profit organizations are to be electronically submitted by email to: