Subpart F: Audit requirements 2024 Uniform Guidance · effective Oct 1, 2024

2 CFR 200.521: Management decisions

2 CFR 200.521 sets 3 requirements for organizations that receive federal grants and cooperative agreements. Applies once you spend federal award money, at audit time.

Shows up in your application: Audit historySubaward planOrganizational capacity

What 2 CFR 200.521 requires

1. General

What you must do

A management decision must clearly state whether the audit finding is sustained, the reasons for the decision, and the expected auditee action (repay disallowed costs, make financial adjustments, or take other action); give a follow-up timetable if corrective action is incomplete; and should describe any available appeal process. The issuer may first request additional information or documentation (including auditor assurance) to mitigate disallowed costs.

When it applies

A Federal agency or pass-through entity issues a management decision on a Subpart F audit finding

Audit history
2. General

What you must do

A pass-through entity is responsible for issuing management decisions for audit findings that affect subawards it issues to subrecipients under a Federal award (see § 200.332(e)).

When it applies

Applicant will act as a pass-through entity and its subrecipients report audit findings related to its subawards

Subaward planOrganizational capacity
3. General

What you must do

The Federal agency or pass-through entity must issue the management decision within six months of the FAC's acceptance of the audit report; the auditee must initiate and proceed with corrective action as rapidly as possible, and corrective action should begin no later than upon receipt of the audit report.

When it applies

FAC accepts an audit report containing findings

Audit historyOrganizational capacity
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Sections that refer to 2 CFR 200.521

Regulation text of 2 CFR 200.521

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(a) General. The management decision must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments or take other action. If the auditee has not completed corrective action, a timetable for follow-up should be given. Prior to issuing the management decision, the Federal agency or pass-through entity may request additional information or documentation from the auditee, including a request for auditor assurance related to the documentation, as a way of mitigating disallowed costs. The management decision should describe any appeal process available to the auditee. While not required, the Federal agency or pass-through entity may also issue a management decision on findings relating to the financial statements, which are required to be reported in accordance with GAGAS.

(b) Federal agency. The cognizant agency for audit is responsible for coordinating a management decision for audit findings that affect the programs of more than one Federal agency (see § 200.513(a)(4)(viii)). The awarding Federal agency is responsible for issuing a management decision for audit findings that affect the Federal awards it makes to a non-Federal entity (see § 200.513(c)(3)(i)).

(c) Pass-through entity. The pass-through entity is responsible for issuing a management decision for audit findings that affect subawards it issues to subrecipients under a Federal award (see § 200.332(e)).

(d) Time requirements. The Federal agency or pass-through entity responsible for issuing a management decision must do so within six months of the FAC's acceptance of the audit report. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report.

(e) Reference numbers. Management decisions must include the reference numbers the auditor assigned to each audit finding in accordance with § 200.516(c).

Source: eCFR · checked Sep 17, 2026

Questions about 2 CFR 200.521

What does 2 CFR 200.521 require?

A management decision must clearly state whether the audit finding is sustained, the reasons for the decision, and the expected auditee action (repay disallowed costs, make financial adjustments, or take other action); give a follow-up timetable if corrective action is incomplete; and should describe any available appeal process. The issuer may first request additional information or documentation (including auditor assurance) to mitigate disallowed costs. A pass-through entity is responsible for issuing management decisions for audit findings that affect subawards it issues to subrecipients under a Federal award (see § 200.332(e)). The Federal agency or pass-through entity must issue the management decision within six months of the FAC's acceptance of the audit report; the auditee must initiate and proceed with corrective action as rapidly as possible, and corrective action should begin no later than upon receipt of the audit report.

When does 2 CFR 200.521 apply?

A Federal agency or pass-through entity issues a management decision on a Subpart F audit finding. Applicant will act as a pass-through entity and its subrecipients report audit findings related to its subawards. FAC accepts an audit report containing findings.

Plain-English summaries for information only, not legal advice. Always check the regulation text, your award terms and your agency’s guidance.