The AICPA Governmental Audit Quality Center (GAQC) recently released key guidance for several important items related to COVID-19. This is especially important information for nonprofits, healthcare and HUD entities, higher education and governmental organizations as they try to answer critical components of what relief provisions mean for their industries.
SBA Loan Programs
The Paycheck Protection Program (PPP) was made available to both for-profit and nonprofit organizations. A key question arising from the PPP Loans is whether nonprofits will be subject to single audit requirements.
The GAQC has indicated that PPP loans made available to nonprofits will not be subject to Uniform Guidance single audit requirements.
Please note, the federal government has recently indicated that PPP loans over $2 million will be subject to an SBA audit. It is unclear how this audit requirement will impact nonprofit entities receiving PPP loans. The GAQC has not released guidance at this time.
However, loans granted under another popular SBA loan program, the Economic Injury Disaster Loan (EIDL) program, will be subject to Uniform Guidance single audit requirements. The reasoning for this is that the EIDL program is considered a direct loan program disbursed from the SBA to loan recipients.
We’ve outlined single audit requirements in the CARES Act.
Federal Audit Clearinghouse Update
While the FAC is accepting single audit submissions, COVID-19 has delayed normal processing times and telephone support is limited. Current turnaround time may be a month or longer for a submission to be processed. It’s important to note that, while processing is delayed, this is not impacting the recorded acceptance date. The acceptance date will be based on the actual date of submission.
An additional change noted in the GAQC guidance was an inclusion in audit reporting packages of a reference to memorandum OMB Memo M-20-17 in audit reporting packages when entities are taking advantage of the six-month extension. This will allow federal agencies and pass-through entities to be informed that auditees have taken advantage of the six-month extension due to COVID-19. Further guidance is expected.
HUD COVID-19 Extensions
HUD’s Real Estate Assessment Center (REAC) has made two extensions:
Keep Informed on Updated Guidance
As COVID-19 continues to impact organizations, it’s important to keep up to date on additional guidance affecting your organization and industry. We are working through unprecedented times, and the impact of the COVID-19 pandemic will continue to impact the way our organizations function and the compliance issues that need to be addressed.
We’ve developed resources to help sort through COVID-19 impacts.