Reingruber Alert: Single Audit Update

1/12/2021 - By Allison Jones, CPA

The Compliance Supplement Addendum is here! Released by the Office of Management & Budget on 12/22/2020. Click here to view the entire Addendum.

Takeaways from the Addendum:

Audit Guidance

The Addendum includes new COVID-19 federal programs and the related compliance requirements subject to audit.
The Addendum also includes changes to provisions for several existing federal programs affected by COVID-19.

Audit Reporting for Provider Relief Funds

For providers with fiscal year-ends prior to December 31, 2020, PRF expenditures and lost revenues will NOT be reported on the Schedule of Expenditures of Federal Awards (SEFA) for 2020. Therefore, these funds will not be considered expenditures for purposes of meeting the $750,000 threshold for 2020. Any 2020 expenditures and lost revenues should be captured instead within the Single Audit determination calculation for 2021.
For providers with fiscal year-ends on December 31, 2020, PRF expenditures and lost revenues will be included on the SEFA (and for purposes of determining whether the $750,000 threshold is met) based on amounts submitted for calendar year 2020 to the PRF reporting system, as described in the General and Targeted Distribution Post-Payment Notice of Reporting Requirements issued on Sept. 19, 2020 (subsequently updated and final as of Nov. 2, 2020).
For providers with fiscal year-ends after December 31, 2020, but before June 30, 2021, PRF expenditures and lost revenues will be included on the SEFA based on amounts submitted for calendar year 2020 to the PRF reporting system. The SEFA will also include a footnote that the PRF amount included is based upon the PRF reporting system for calendar year 2020.
For providers with fiscal year-ends on or after June 30, 2021, SEFA reporting guidance will be included in the 2021 Compliance Supplement.
Note that this timing applies only to PRF and does not affect SEFA reporting of other COVID-19 relief that you may have received.

Single Audit Due Dates

Due to audits being put on hold pending the Addendum, entities that received any form of COVID-19 relief payments with original Single Audit due dates from 10/1/20 to 6/30/21 (fiscal years ended after 12/31/19 and through 9/30/20) will receive an automatic 3-month extension for submission of the Single Audit reporting package.
No further action is required to enact the extension.

Donated Personal Protective Equipment (PPE)

If you received PPE donations from federal agencies or federal funding recipients, you should provide the fair market value of the PPE as a stand-alone unaudited footnote in the SEFA. The amount should not be counted for purposes of determining the threshold for a Single Audit.

For more information regarding Single Audit of COVID-19 relief funds, please contact Allison Jones, CPA.

Saltmarsh can help:

Provide guidance in preparation for Single Audit
Conduct Single Audit or program-specific audit procedures
Document proper use of CARES Act Provider Relief Funds
Ensure documentation of PRF fund use includes all permissible direct cost, indirect cost, and lost revenues
Prepare for the February 15, 2021, PRF reporting deadline
Manage the cash flow implications and options regarding AAP refunds
Help you benefit from all resources to meet COVID-19 challenges!