GAQC Summary of New COVID-19 Programs
The GAQC has released a nonauthoritative summary of information about federal programs that have been established as a result of the COVID-19 pandemic. Access the summary. The GAQC summary is intended to assist members by addressing whether new COVID-19 federal programs will be subject to single audit. We hope you will also find it useful for gathering information to help in the audit planning process and for purposes of initial discussions with your clients. However, both auditees and auditors should refer to the final 2020 Supplement, once issued, for authoritative guidance on new COVID-19 programs.
The following is among the information included in the GAQC summary:
- The Assistance Listing number (also commonly referred to as the CFDA number);
- An indication of whether the Uniform Guidance and single audit rules apply to each new program;
- Links to any related federal agency or other guidance; and
- A "Notes" section which includes other pertinent information the GAQC is aware of regarding the program.
Much of the information in the GAQC summary has been developed based on public information in https://beta.sam.gov/ (also referred to as the Assistance Listing). However, we would caution that the Assistance Listing has been changing on a periodic basis, so you are encouraged to check it directly by clicking on the hyperlinked program titles in the summary. The GAQC may update this document on a periodic basis as matters evolve. Therefore, if you print the document, be sure to check the GAQC Web site regularly and refer to the "as of" date on the first page. If the date has changed, you will know there has been an update. We will also inform you of any major changes in future GAQC Alerts.
The Largest 4 COVID-19 Programs
Questions we receive generally revolve around whether single audit rules will apply to one of the 4 largest new COVID-19 federal programs. The following is a quick summary of the latest we have on each of those programs:
Paycheck Protection Program Loan Program (59.073). Some not-for-profit (NFP) organizations may have received these loans. However, as noted, in GAQC Alert #404, they are not subject to the Uniform Guidance or single audit rules.
Provider Relief Funds (93.498). These funds are generally being provided to hospitals and other healthcare providers that may be governmental entities, NFPs, or for-profit entities. Currently, HHS has indicated on https://beta.sam.gov/ that subparts B, D, and E of the Uniform Guidance apply to non-federal entities receiving these funds and that the program will be subject to single audit. However, we are aware that HHS is still holding internal discussions about this decision and the situation remains fluid. We are also aware that HHS is separately discussing what audit requirements, if any, will be applied to for-profit entities. Watch for future GAQC communications regarding any new developments. If the current HHS decision stands, there is likely to be a significant increase in the number of hospitals and other providers that may become subject to a single audit.
Coronavirus Relief Funds (21.019). These funds are being provided directly to states, larger local governments, and tribal entities. Further, many of these direct recipients have already or will be passing down some of the funds to other non-federal entities. Both https://beta.sam.gov/ and Treasury Frequently Asked Questions on this program indicate that single audit rules apply. However, both sources also indicate that only 2 specific sections of the Uniform Guidance apply to recipients (i.e., section 200.303 on internal control and sections 200.330 - .332 on subrecipient monitoring). The GAQC has inquired with OMB about the intent of this limited selection of Uniform Guidance provisions, as well as how a single audit would be performed on such limited requirements. To date, we have not been given a definitive response and it may be that we will not have an answer until Treasury develops a 2020 Supplement section for this program (expected over the summer months). We will communicate updated information when we have it.
Education Stabilization Fund (84.425). These funds are being provided to states, schools, and institutions of higher education. Within this large program are various subprograms that Education is delineating with the addition of a letter after the CFDA number (e.g., 84.425A, 84.425B, etc.). The GAQC summary document referred to above identifies the various subprograms. Since the initial launch of this program, https://beta.sam.gov/ has indicated that subparts B, C, D, and E of the Uniform Guidance apply to entities receiving these funds and that the program will be subject to single audit. Related Terms and Conditions documents issued by Education for the various subprograms also indicate that recipients must comply with the Uniform Guidance. Finally, as it relates to major program determination, initial indications from Education's Office of Inspector General are that all subprograms of 84.425 would be considered one program in situations where entities are expending funds under multiple subprograms.
2020 Supplement Status
OMB has indicated that the 2020 Supplement will likely be issued in 2 parts this year. The first part, which is currently in the OMB clearance process, will be primarily what was developed prior to the COVID-19 pandemic. However, it is expected to include some limited information related to the COVID-19 pandemic including a summary of new COVID-19 programs. OMB is hoping for a late June or early July issuance of this first part.
The second part of the Supplement will be an addendum that will address new COVID-19 programs in more detail. For example, new Part 4 sections will likely be provided for certain of the more pervasive programs. OMB staff has stated that the addendum will be issued in late summer or early fall. Look for future GAQC Alerts for updates on the status of the Supplement.
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Sincerely,
AICPA Governmental Audit Quality Center
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