Many organizations received significant funding under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, either directly from the U.S. Department of Treasury or through another entity, such as their state or county. In either case, the funds originate from the federal government, which means there are certain requirements that recipients must follow.
Entities that expend $750,000 or more in federal funds in a given fiscal year are required to obtain a single audit, a type of audit governed by OMB through a set of rules known as “Uniform Guidance”. Because of the amount of federal grants available for pandemic relief in the past year, entities may require a single audit for the first time this year.
Keep in mind that funds received by an entity from a state/county/local government or agency, or even from another nonprofit, may be a passthrough of federal funds and included in calculating whether the $750,000 threshold has been met. This may require review of grant agreements and conversations with granting agencies to understand the sources of funding received and the nature of the relationship between grantee and grantor.
Pandemic relief that is NOT subject to the Uniform Guidance includes:
- Paycheck Protection Loan Program (PPP loans)
- Coronavirus Food Assistance Program (CFAP)
- Employee Retention Credit (ERC) Program
Pandemic relief programs that ARE subject to the Uniform Guidance include:
- Coronavirus Relief Fund (CRF)
- Education Stabilization Fund (ESF)
- Provider Relief Fund (PRF)
- Loans under the Economic Injury Disaster Loan (EIDL) program are also considered federal financial assistance subject to single audit requirements
- Advances on EIDLs are not subject to single audit requirements
Please contact us today to discuss your specific situation and we can help answer any questions you may have. As always, planning ahead can help you maximize your financial situation and position you for greater success.