2 CFR § 200.520 - Criteria for a low-risk auditee.
An auditee that meets all of the following conditions for each of the preceding two audit periods must qualify as a low-risk auditee and be eligible for reduced audit coverage in accordance with § 200.518.
(a) Single audits were performed on an annual basis in accordance with the provisions of this Subpart, including submitting the data collection form and the reporting package to the FAC within the timeframe specified in § 200.512. A non-Federal entity that has biennial audits does not qualify as a low-risk auditee.
(b) The auditor's opinion on whether the financial statements were prepared in accordance with GAAP, or a basis of accounting required by state law, and the auditor's in relation to opinion on the schedule of expenditures of Federal awards were unmodified.
(c) There were no deficiencies in internal control which were identified as material weaknesses under the requirements of GAGAS.
(3) Known or likely questioned costs that exceeded five percent of the total Federal awards expended for a Type A program during the audit period.