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					                                              United States Department of Agriculture
                                                     Food and Nutrition Service

                                                          Southeast Region

 Reply to
 Attn. of: SA   9-2 General

 Subject: Policy Number       226.08-04: Audit Requirements: Increase in Dollar Threshold

     To:   All State Directors:
            Child and Adult Care Food Program
           Southeast Region

           This memorandum is a restatement of policy previously issued as CACFP Policy Memorandum
           97-20, on March 14, 1997. Any changes made to the text are in bold.

           The Single Audit Act Amendments of 1996 raised the threshold for a non-Federal entity’s audit
           requirement from $25,000 in Federal Financial Assistance to $300,000. This change became
           effective for the entity’s fiscal year beginning after June 30, 1996. However, USDA’s
           assistance regulations implementing audit requirements – Parts 3015 and 3051—still contain
           the $25,000 threshold. This has created uncertainty about whether the increased threshold is in

           The Food and Nutrition Service has received the following clarification from the Office of
           General Counsel. In the event of a conflict between a statute and an administrative regulation,
           the statute prevails. Therefore, the $300,000 threshold is the present threshold for establishing
           a non-Federal entity’s audit requirement for fiscal years which began after June 30, 1996.

           While a statute takes precedence, it does not simply nullify USDA regulations. Those
           regulations must still be followed, to the extent that they are consistent with the Single Audit
           Act Amendments of 1996.

           If you have any questions regarding this matter, please contact our office.

           Regional Director
           Special Nutrition Programs

                                     61 Forsyth Street, S.W., Room 8T36, Atlanta, GA 30303-3415
FORM FCS-603 (3-96)

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