It is my understanding that the contractor is subject to audit (rather than the
contract itself).

If the contractor meets the criteria of receiving more than $300,000 in federal
funds from any combination of sources within the fiscal year of the contractor,
then the contractor is subject to the terms of the GAO's auditing standards.
Federal funds can then support the audit if prorated, usually based on the split
of federal and other funds.

States and other entities can have contract language more stringent than this
minimum dolalr figure.  If so, the federal funds cannot be included in payment
for the audit.

Your accountant/comptroller should be able to answer this definitively.

"Gentilini, Jane" <xxxxxx@RESEARCH.USF.EDU> on 09/01/2000 10:21:31 AM

Please respond to Research Administration Discussion List <xxxxxx@hrinet.org>

To:   xxxxxx@HRINET.ORG
cc:    (bcc: Bonnie J. Brautigam/Wadsworth/DOH)
Subject:  Auditing of Fixed Price Contracts

I would appreciate hearing your views on whether fixed price agreements
containing federal dollars are generally subject to fiscal audit, in
particular the allowability of expenditures regarding cost accounting
standards.  By fixed price I mean agreements where payments are triggered by
the completion of tasks, deliverables, or milestones with a fixed fee
attached to each, rather than reimbursement of actual expenditures.  I'm
interested in contracts you receive as well as the subcontracts you write to
your subrecipients.  Any thoughts, experiences, practice vs. rules, etc. are
welcome.  Thanks.

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