Not-for-profit organizations that receive federal funds are subject to the requirements of the Uniform Grant Guidance (UGG), and the Subpart F Single Audit. For several reasons, from the introduction of new federal COVID-19 relief programs to the disruption that accompanied mass shelter-in-place orders, the COVID-19 pandemic is changing what the single audit may look like in 2020 and for your organization’s fiscal year. The following provides a brief recap of what to expect for your single audit in 2020.
Delays to Due Dates for Single Audit Submissions
A memo from the Office of Management and Budget (OMB) clarified that single audit submissions between March 30 and June 30, 2020 (typically covering fiscal year ends June 30, 2019 through Sept. 30, 2019) and for audits not submitted to the Federal Clearing House before March 19, 2020 have an additional six months to submit their audits. Organizations with normal due dates of submission of their single audit from July 31, 2020 through Sept. 30, 2020 (year-ends Oct. 31, 2019 – Dec. 31, 2019) have an additional three months to submit their audits. If your fiscal year started Jan. 31, 2020, your organization will not have a single audit submission extension; the single audit will be due nine months after year-end.
COVID-19 Relief Provisions with Single Audit and UGG Requirements
At least 20 new federal relief programs came about to help organizations respond to the COVID-19 pandemic, several of which came in the Coronavirus Aid, Relief and Economic Security (CARES) Act legislation. Several of these relief programs come with UGG considerations, which the AICPA’s Governmental Audit Quality Center (GAQC) recently summarized. The largest of the programs that come with Single Audit requirements include:
- Provider Relief Fund, which provided assistance for healthcare providers to help with patient expenses and purchases of pandemic-related medical equipment;
- Coronavirus Relief Fund, which provided assistance for state and local government groups; and
- Education Stabilization Fund, which provided assistance for educational institutions to help with K-12 education models, workforce preparation programs, and higher education.
Additional UGG reporting requirements may also be required for some of the key programs as well. For some organizations, receiving federal support from the COVID-19 legislation may make them subject to the UGG requirements for the first time.
Relief Provisions Affect Existing Single Audit Requirements, Too
Organizations that regularly undergo the single audit may find that the COVID-19 relief affects their single audit in a number of ways:
- Single audits may be delayed. The second release of the 2020 OMB Compliance Supplement, published on Aug. 14, incorporates some of the nuances of the UGG’s application to COVID-19 relief programs. The timing of the release may have meant that the single audit completion occurred after meetings between auditors and governance teams.
- Depending on the type and amount of funding received from new programs introduced in the CARES Act, more major programs may need to be audited. More major programs being audited would also affect the overall single audit risk assessment.
- Your auditor may need to test for additional internal controls if the organization made any changes to controls over the compliance requirements for CARES Act relief.
For More Information
We will keep you up-to-date as new developments emerge. For comments, questions or concerns about the single audit, 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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