The Impact of COVID-19 on Single Audits

By John D'Amico  |  October 21, 2020

COVID-19 has greatly impacted the U.S. economy, resulting in a complete shutdown of many businesses and organizations when the pandemic started. The impact is continuing as many of those businesses are still closed and/or operating at limited capacity to help stop the spread of COVID-19.

The federal government responded to this crisis by passing the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act provided direct economic assistance to American workers, families, state and local governments and small businesses, including countless nonprofits. The most prominent federal assistance is the Paycheck Protection Program (PPP) implemented by the U.S. Small Business Administration. The PPP assistance is not subject to a Single Audit.

COVID-19-related federal assistance programs that are subject to a Single Audit include the following:

Program Name	CFDA #	In Addendum
Provider Relief Fund (PRF)	93.498	Yes
Uninsured Testing Portal	93.461	Yes
Rural Health Clinic Testing	93.697	Yes
Coordinated Services and Access to Research For Woman, Infants, Children, and Youth (HRSA)	93.153	Yes
HIV Emergency Relief Projects Grants	93.914	Yes
HIV Care Formula Grants	93.917	Yes
Grants to Provide Outpatient Early Intervention Services	93.918	Yes
Coronavirus Relief Fund (CRF)	21.019	Yes
Education Stabilization Fund	84.425	Yes
Coronavirus Emergency Supplemental Funding Program	16.034	Yes
Indian Community Development Block Grant	14.862	Yes
Community Development Block Grant (CDBG)	14.218	Yes
Emergency Solutions Grant Program, Homelessness Assistance	14.231	Yes
Telehealth Program	32.006	Yes
Disaster Assistance Loans	59.008	No
Cares Act Project SERV	84.184c	No
Coronavirus Food Assistance Program (CFAP)	10.130	No

Auditors performing a Single Audit are required to use the 2020 OMB Compliance Supplement (the “Supplement”) for organizations with fiscal year ends of June 30, 2020 and thereafter until the next Supplement is issued. The Supplement is needed for the recipients of these federal awards to understand and comply with the requirements and for auditors to use the Supplement to test those requirements.Nonprofits and state and local governments are subject to a federal Single Audit if they expend $750,000 of federal financial assistance or more in their fiscal year. This includes the above COVID-19 assistance either in grants or loans and all their other non-COVID-19 federal financial assistance expended in their fiscal year.

The 2020 Supplement was issued in August 2020 but did not include guidance for auditing COVID-19-related federal financial assistance. The Office of Management and Budget (OMB) advised that they will be issuing an addendum to the 2020 Supplement by the fall of 2020.  A draft was provided to the AICPA Government Audit Quality Center (GAQC) in early October 2020 and the GAQC advised that they had significant comments and concerns with the addendum. The GAQC believes that the addendum will be issued in late October to mid-November. 

Since the addendum has not yet been issued, it would be nearly impossible for recipients of COVID-19-related federal financial assistance to be in compliance with these requirements since they would only know of them a long time after receiving the assistance.

We will issue another article on this topic once the addendum is issued.

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