Earlier this week on May 5, 2020, the AICPA Government Audit Quality Center (GAQC) provided Alert #404 to its members which included information related to the applicability of the Paycheck Protection Program (PPP) to the Single Audit requirements of the Uniform Guidance. As a reminder, nonprofit organizations that expend more than $750,000 of federal funds in a fiscal year are subject to these additional compliance audit requirements.
In response to numerous questions, the Small Business Administration (SBA) has indicated to the GAQC that nonprofit organizations will not have to include PPP loans when determining if a Single Audit is required, or include PPP loans on the Schedule of Expenditure of Federal Awards (SEFA). This is welcomed relief to nonprofit organizations that previously were not subject to these requirements, and also provided needed clarity to those organizations that already prepare a SEFA and are subject to the requirements.
The SBA did however indicate that any Economic Injury Disaster Loan (EIDL) proceeds are considered a direct loan program from the SBA, and thus, are subject to the Single Audit requirements of the Uniform Guidance.
A link to the AICPA GAQC alert can be found here: https://www.aicpa.org/interestareas/governmentalauditquality/newsandpublications/gaqcalert/2020gaqcarchivedalerts/gaqcalertno404.html
Feel free to contact Jim Shellenberger, Principal at McKonly & Asbury by emailing email@example.com with any questions or concerns.
Questions on submitting your PPP loan application or the forgiveness process?
Our team stands ready to assist you through the PPP loan application and forgiveness process. Do not go at it alone. Ensure you are submitting the right information and receiving the highest forgiveness amount possible. Visit our PPP Loan Consulting webpage by clicking here to request assistance or support.
This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although McKonly & Asbury has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.