According to 2 CFR 200.332, what is required of a PTE?

The correct choice highlights the responsibility of a Pass-Through Entity (PTE) as mandated by 2 CFR 200.332. A PTE must pass on federal requirements to subrecipients to ensure compliance with federal regulations and standards. This obligation underscores the importance of accountability in the flow of federal funds from higher-level federal agencies to local entities and organizations that implement the funded projects. By passing these requirements down the line, the PTE ensures that all parties involved in the grant funding process adhere to the specific guidelines established by the federal awarding agency.

This requirement is crucial for maintaining the integrity of federal grant programs, as it helps enforce adherence to laws, regulations, and conditions specific to federal funding. It is not about unilateral discretion or independent financial management, but rather about fostering compliance among all parties receiving and utilizing federal funds.