Thanks to a recent memo from the Office of Management and Budget (OMB), some organizations subject to the Uniform Grant Guidance will no longer be provided an extension to file their Single Audit with the Federal Audit Clearinghouse. Memo M-20-26, 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 eliminates a previous six-month extension that had been granted to organizations with fiscal year ends falling between Dec. 31, 2019, through June 30, 2020. Those Single Audits would be due within the normal due date under the Uniform Grant Guidance, nine months after the fiscal year end.
The memo also contained a few other provisions of note, which we have summarized below.
Salaries and Other Project Activities
In what could be welcome news, organizations may continue to charge salaries and benefits to active federal awards from all funding sources (including non-federal) through Sept. 30, 2020. Documentation will be necessary to demonstrate how salaries and program costs charged to federal programs may have been impacted by the COVID-19 disruption.
COVID-19 Legislation and Relief Clarification
Any payroll costs that would be covered by the Paycheck Protection Program (PPP) or other coronavirus legislation benefit may not be charged to current federal awards. Additionally, other sources of funding must be used first before tapping into active federal awards to cover payroll related expenses, including rent renegotiations.
Any funds received from these COVID-19 federal programs, (collectively, COVID-19 Emergency Act expenditures) must be listed separately in the Schedule of Expenditures of Federal Awards.
OMB Compliance Supplement Delayed until Fall
The 2 CFR Part 200, Appendix XI Compliance Supplement (Compliance Supplement) is expected to be issued in two phases in 2020. The first is expected in early summer and will incorporate changes approved prior to COVID-19. The second, and likely most relevant version, is expected later this fall. This version will incorporate changes due to coronavirus legislation. Note that the delay in the issuance of the final Compliance Supplement may delay when auditors can audit certain programs. For organizations that have board meetings and deadlines for financial statements in early fall, the Single Audit financial statements will likely not be available and will be finalized later in the fall or early winter. Organizations may need to consider a second board meeting for review and approval of the Single Audit.
More Information to Come
For comments, questions or concerns about these provisions please contact us.
Looking for more COVID-19 resources? Visit our resource center for expertise on impacts to expect and how your business can respond.
Michelle Sylvia Spriggs is a Shareholder in the Not-For-Profit & Education Practice. She can be reached at 774.206.8336 or firstname.lastname@example.org.
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