(a) For-profit organizations. This section contains provisions that apply to awards to for-profit organizations. These provisions are in addition to other applicable provisions of this part, or they make exceptions from other provisions of this part for awards to for-profit organizations.

(b) Prohibition against profit. Except for awards under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer Research (STTR) programs (15 U.S.C. 638), no HHS funds may be paid as profit to any recipient even if the recipient is a for-profit organization. Profit is any amount in excess of allowable direct and indirect costs.

(c) Program income. Except for grants for research, program income earned by a for-profit organization may not be used to further eligible project or program objectives except in the SBIR and STTR programs.

(d) For-profit organization audits. (1) For-profit organizations that receive awards (including for-profit hospitals) have two options regarding audits:

(i) A financial related audit of a particular award in accordance with GAGAS, in those cases where the for-profit organization receives awards under only one HHS program; or, if awards are received under multiple HHS programs, a financial related audit of all awards in accordance with GAGAS; or

(ii) An audit that meets the requirements contained in 2 CFR 200, subpart F.

(2) For-profit organizations that receive annual awards totaling less than the audit requirement threshold in subpart F are exempt from HHS audit requirements for that year, but records must be available for review by appropriate officials of Federal agencies or the GAO. (See § 200.501).

(e) Applicability. The provisions of § 200.315(e) do not apply to for-profit organizations.

(a) An HHS agency must have explicit statutory authority that makes Federal agencies eligible for awards.

(b) All provisions of 2 CFR part 200, this part, and other HHS regulations apply to Federal entities receiving Federal awards, except for the following:

(1) Except for grants for research, any program income earned by a Federal institution must be used under the deduction alternative. Any program income earned after the period of performance should be returned to the United States Treasury.

(2) No salary or fringe benefit payments may be made from HHS agency funds to support career, career-conditional, or other Federal employees (civilian or uniformed services) without permanent appointments at a Federal institution receiving an award. While the level of effort required for the project must be allowed by the recipient as part of each individual's official duties, salary costs associated with an individual participating in an official capacity as a Federal employee under an award to that Federal institution are not allowable costs under an HHS award.

(3) Federal agencies may not be reimbursed for indirect costs under Federal awards.