There are several important assurance items for organizations to keep in mind when it comes to relief provisions and what it means for their industries. We break down a few of the key components below.
The Paycheck Protection Program (PPP) was made available to both for-profit and nonprofit organizations. A key question that arose from the PPP Loans is whether the loans would be subject to single audit requirements, to which the SBA said – NO. PPP loans should not be included on an entity’s schedule of expenditures of federal awards and are not subject to single audit.
However, PPP borrowers beware – the SBA has communicated that that PPP loans over $2 million may be subject to an SBA audit, though the SBA has not provided any additional information.
Loans granted under another popular SBA loan program, the Economic Injury Disaster Loan (EIDL) program, should be included on an entity’s schedule of expenditures of federal awards and will be subject to Uniform Guidance single audit requirements. EIDL is a direct loan program disbursed from the SBA to loan recipients.
On March 19, 2021, the Office of Management and Budget issued M-21-20, which allowed entities that had not yet filed their single audits with the Federal Audit Clearinghouse (FAC) as of the date of the memo and that had fiscal years ending on or before June 30, 2021 to delay the submission of their single audit to the FAC for up to six months beyond their normal due date. The extension does not require any further action by awarding agencies or federal award recipients.
What does this mean? An entity with a June 30, 2021 fiscal year end would normally have an FAC filing requirement of March 31, 2022. Memo M-21-20 would extend the filing requirement to six months beyond March 31, 2022 to September 30, 2022.
As COVID-19 continues to impact organizations, it’s important to keep up to date on additional guidance affecting your organization and industry. We continue to be in the midst of unprecedented times, and the COVID-19 pandemic will continue to impact the way organizations operate for years to come.
Make sense of your assurance requirements when it comes to relief funding and more.