Administrative Requirements of Federal Funds Related to COVID-19

In order to maintain financial stability through the COVID-19 pandemic, many organizations received funds from the Federal Government and now need guidance on the administrative requirements of the awards. In particular, they will need to determine whether or not they will be subject to single audit regulations under the Uniform Guidance.

This article provides a summary of the current requirements of the most common coronavirus-related awards, broken down by the issuing agencies, in order to assist individuals in the audit planning process.

Small Business Administration 

• Paycheck Protection Program
  The program funds, which are available to for-profit and non-profit entities, originate as loans that may be forgiven as long as the borrower meets certain requirements. Single audit requirements do not apply to this program, regardless of whether the loan is repaid or forgiven.

• Economic Injury Disaster Loan Emergency Advance
  The $10,000 advance, which provided immediate relief under the Economic Injury Disaster Loan Program, can be combined with the Paycheck Protection Program and forgiven. These funds are not subject to single audit requirements. 

• Economic Injury Disaster Loan
  These loan funds, available to for-profit and non-profit entities, are subject to single audit requirements. The audit requirement attaches as long as the loan is outstanding and applies only to non-profit entities.

Department of Health and Human Services

• Provider Relief Funds
  Hospitals and health care providers ― including governmental units, non-profits and for-profit healthcare providers ― received these funds to assist with costs related to COVID-19. The awards are subject to single audit requirements, regardless of the entity type. The Department of Health and Human Services continues to develop the specifics related to the audit requirements at this time, and current guidance is subject to change.

Department of Treasury

• Coronavirus Relief Fund
  State and local governments and tribal agencies received these funds, which may be passed through to non-profits and non-Federal entities. Single audit requirements apply to these awards. At this time, it appears that the Department of Treasury will limit the scope of any audits required under this program, but guidance has not been finalized.

Department of Education

• Education Stabilization Fund
  These funds, available to states, schools, and higher education institutions, are subject to single audit requirements. Though the program has several components, the current guidance indicates that all components would be subject to one set of audit requirements. 

Receipt of any of the funds identified as subject to the single audit regulations does not immediately trigger an audit requirement. The single audit regulations are complex, and additional requirements must be met to necessitate an audit. If you have received Federal awards, directly or through another organization, please contact us. We can assist you in evaluating your administrative requirements related to the awards.

Disclaimer of Liability
Our firm provides the information in this article for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this blog are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability and fitness for a particular purpose.