§ 200.518 Major program determination.
(a) General. The auditor must use a risk-based approach to determine which Federal programs are major programs. This risk-based approach must include consideration of: current and prior audit experience, oversight by Federal agencies and pass-through entities, and the inherent risk of the Federal program. The process in paragraphs (b) through (h) of this section must be followed.
(b) Step one. (1) The auditor must identify the larger Federal programs, which must be labeled Type A programs. Type A programs are defined as Federal programs with Federal awards expended during the audit period exceeding the levels outlined in the table in this paragraph (b)(1):
| Total Federal awards expended | Type A/B threshold |
|---|---|
| Equal to or exceed $750,000 but less than or equal to $25 million | $750,000. |
| Exceed $25 million but less than or equal to $100 million | Total Federal awards expended times .03. |
| Exceed $100 million but less than or equal to $1 billion | $3 million. |
| Exceed $1 billion but less than or equal to $10 billion | Total Federal awards expended times .003. |
| Exceed $10 billion but less than or equal to $20 billion | $30 million. |
| Exceed $20 billion | Total Federal awards expended times .0015. |
(2) Federal programs not labeled Type A under paragraph (b)(1) of this section must be labeled Type B programs.
(3) The inclusion of large loan and loan guarantees (loans) must not result in the exclusion of other programs as Type A programs. When a Federal program providing loans exceeds four times the largest non-loan program it is considered a large loan program, and the auditor must consider this Federal program as a Type A program and exclude its values in determining other Type A programs. This recalculation of the Type A program is performed after removing the total of all large loan programs. For the purposes of this paragraph a program is only considered to be a Federal program providing loans if the value of Federal awards expended for loans within the program comprises fifty percent or more of the total Federal awards expended for the program. A cluster of programs is treated as one program and the value of Federal awards expended under a loan program is determined as described in § 200.502.