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2 CFR 200 Compliance Supplement (Frequently Asked Questions—July 2017 update)
.331-2 Limits on layers of Subrecipients for Indirect Costs
Q: Is there a limit on the number of layers of subrecipients at which the requirement to pay indirect costs is no longer applicable? For example, a state may pass-through Federal grant funds to a local government. The local government may then pass all or some of the funds through to a local nonprofit, which then also utilizes the services of other nonprofit providers as subrecipients.
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