business Did your Company Receive COVID-19 Related Funding? Here’s What You Should Know. September 29, 2020 Did you receive COVID-19 funding? Wondering if you need a single audit? Do you know what a single audit is? Changes under the CARES Act may trigger single audit requirements. Here’s what you need to be aware of now. Attention businesses…did you receive funding related to COVID-19? You may need a single audit. Recent funding provided under the Coronavirus Aid Relief and Economic Security (CARES) Act and other recent legislation has resulted in many new federal programs and has also increased funding for certain existing federal programs. Some of this funding will trigger single audit requirements (federal audit) under the Uniform Guidance. If your company has received COVID-19-related funding, here is what you need to know. What is a single audit and when is it required? It is critical to understand your federal COVID -19 funding to determine if a single audit is required under the Uniform Guidance. Many entities will be subject to a single audit for the first time. A single audit is performed to ensure your company is in compliance with the rules and regulations of each federal award. It consists of two main parts: an audit of the financial statements and an audit of compliance with the terms of the major federal award programs. A single audit is required when you expend more than $750,000 in federal awards during the fiscal year. If you only have one federal program, you may be able to elect to have a program-specific audit instead. What is a program-specific audit and when can it be elected? A program-specific audit is an audit of an entity’s compliance with the requirements of a single federal agency. If the awards are under only one federal agency (excluding research and development) and the terms of the award do not require a financial statement audit, you can elect to have a program-specific audit instead of a single audit.Which COVID-19 programs require a single audit? Based on the latest guidance, which is subject to periodic changes, below are some of the federal programs that are subject to a single audit under the Uniform Guidance: Provider Relief Fund (CFDA 93.498) Coronavirus Relief Fund (CFDA 21.019)Education Stabilization Fund (CFDA 84.425)Coronavirus Emergency Supplemental Funding Program (CFDA 16.034)COVID-19 Telehealth Program (CFDA 32.006)Disaster Assistance Loans (Economic Injury Disaster Loans) (CFDA 59.008)The Paycheck Protection Program (PPP) (CFDA 59.073) is not subject to a single audit. What if you received PPP funding as well? If you received PPP funding you may already know that you can't use the same expense as support for multiple grants ("double dip"). It is critical that you allocate expenses to each source of funds. In addition, PPP limits the payroll cost for each employee to $100,000 or less while some of the other funding available has higher payroll limits per employee. Be sure that you understand all of the limitations so you can get the maximum benefit from this funding. What do we need to do? It’s essential to gain a good understanding of your federal awards and their requirements. Here are some steps to take: Retain a copy of the grant application and any information used to support the funding request.Review the contract and any referenced regulations provided by the funding agency.Review and/or implement internal controls over compliance with the federal awards.Put processes in place to track expenditures and retain adequate supporting documentation related to these expenditures.Contact the federal funding agency directly if you need clarification is needed to ensure compliance related to COVID-19 funding.What is the single audit deadline? Single audits are due the earlier of 30 days after receiving the auditor’s report on the financial statements or nine months after the fiscal year-end. The following extensions due to COVID-19 have been provided: 6-month extension for years ended June 30, 2019 through September 30, 20193-month extension for years ended October 31, 2019 through December 31, 2019An extension is no longer available for years ending after December 31, 2019. An updated OMB Compliance Supplement, which provides guidance about specific federal programs, was recently issued; however, it includes very little information about COVID-19 programs. Additional information is expected to be issued in the fall. We will keep you updated about new guidance or changes to the current guidance as soon as it becomes available. Contact us.