Motivated by applications related to large-scale and complex systems, there has recently been an increased interest in the design and analysis of distributed control and fault accommodation schemes. This note presents a distributed fault detection and accommodation design method for a class of nonlinear interconnected subsystems. A fault may occur in the subsystems local dynamics as well as in the interconnections between the subsystems. The subsystems exchange state information according to a tracking error based communication protocol, where each subsystem transmits its state information only when its tracking error exceeds a certain threshold. The robustness of the distributed fault detection scheme and the closed-loop stability properties of the fault accommodation design are established through a rigorous analysis.