What You Need to Know Regarding COVID-19 Single Audit Compliance Federal Funds Received
OMB issues M 20-26, a memorandum regarding the extension of Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by COVID-19, dated June 18, 2020, which provides some clarification on “Administrative Relief Exceptions for COVID-19 Crisis” and specifies required appropriate records and documentation to maintain supporting charges against the federal awards. This memorandum rescinds M-20-20 and M-20-17.
Allowable costs related to salaries and project activities under 2CFR section 200.403 through .405
It is important to understand that federal funds have been distributed through various facets, such as the Paycheck Protection Program (PPP) loans and other CARES Act programs. A significant concern for the federal government is the “double dipping” for the same expenditures being claimed by recipients. This concern is being shared and directed to awarding agencies to verify these costs are not being paid for twice by the federal government. Therefore, Awarding Agencies (State and local governments) “….must require recipients to maintain appropriate records and costs documentation…..to substantiate the charging of any salaries and project activities costs…” We highly recommend awarding agencies document and retain their due diligence related to verifying other federal funds have not been received related to other federal programs, such as obtaining bank statements for April through date, verifying federal funds have not been received to cover these costs already.
Extension of Single Audit Submission
OMB clarifies the extension dates on singles audit that were due March 30, 2020 through June 30, 2020. These were granted a six month extension. Any single audit due from July 31, 2020 through September 30, 2020 were granted a three month extension. No action needed to receive this extension. It is important to note that taking advantage of this extension will not jeopardize qualifying as a “low-risk auditee” under 2CFR section 200.520 (a).
COVID-19 Emergency Funds Reporting
All recipients and subrecipients of COVID-19 Emergency Acts funding and programs are required to separately identify the COVID-19 Emergency Acts expenditures on the Schedule of Expenditures of Federal Awards (SEFA) and audit report findings.
Complete memorandum from OMB can be viewed here Extension of Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by the Novel Coronavirus (COVID-19) due to Loss of Operations.
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