New Guidance and Deadlines for 2020 Single Audits

Many nonprofits are facing new single audit requirements this year, in light of the additional government funding they received to recoup COVID-19 damages. In response to these changes, the Office of Management and Budget (OMB) has provided new guidance and deadline relief to help these organizations maintain compliance.

The new guidance, issued in the 2020 Compliance Supplement Addendum, was released by the OMB on December 23 and includes specific instructions for preparing single audits in the wake of the COVID-19 pandemic.

Single Audit Deadline Extension

With many single audits put on hold in 2020, pending this new guidance, the addendum offers a three-month extension on all single audit deadlines for nonprofits with 2020 year-ends through September 30, 2020, as long as they received some form of COVID-19 relief funding. For example, the single audit deadline for eligible nonprofits with June 30, 2020 year-ends is extended from March 31, 2021 to June 30, 2021.

Eligible nonprofits do not need to obtain approval for this extension, but they must document the reason for the delayed filing.

COVID-19 Reporting Guidelines

The addendum contains guidance on how you should report CARES Act or other COVID-19 relief funds, including:

  • Do not include Provider Relief Fund (PRF) expenses and lost revenues on the Schedule of Expenditures and Federal Awards (SEFA) until December 31, 2020 year-end or later. There are specific reporting rules to follow to determine when and what amount to report.
  • Donated personal protective equipment (PPE) should be included as a footnote to the SEFA and reflect the fair market value of the PPE at time of receipt.
  • Auditor must test compliance of COVID-19 programs with the Federal Funding Accountability and Transparency Act (FFATA) reporting rules, which apply to direct recipients of grants or cooperative agreements who make first-tier subawards of $25,000 or more. This requirement applies not only to pandemic relief, but also to all major programs for audits of fiscal years after September 30, 2020.

Remember, even if your nonprofit did not require a single audit in prior years, it may now be subject to the requirement if this year’s COVID-19 relief funding put it over the $750,000 threshold.

David M. Rottkamp David M. Rottkamp, CPA, is an Audit Partner and Nonprofit Practice Leader, at Grassi. David has over 36 years of experience providing audit and advisory services to the not-for-profit and health care industries. David focuses on organizations serving individuals with special needs, religious organizations, educational institutions, membership associations, social service providers, healthcare providers, foundations, and the arts and culture world. David’s technical knowledge allows... Read full bio

Categories: Advisory