United States Capitol Building

Authored by Laura Rash

Through the passing of various legislative actions, billions in federal funds have been provided to individuals, schools, businesses, healthcare entities, state and local governments and not-for-profit organizations. More than 20 new federal programs were created to provide funding relating to the pandemic and hundreds of federal programs were expanded to provide additional grant-related funding to address the impacts of COVID-19.

It is imperative that organizations identify all federal funding received relating to COVID-19. Once all funding is identified, management needs to investigate the funds to determine if they are subject to the Uniform Guidance requirements. Although non-authoritative, the Government Audit Quality Center (GAQC) of the American Institute of Certified Public Accountants (AICPA) is compiling a “real-time” summary of all federal funding sources. The summary includes a description of the funds by federal agency, an indication if they are subject to the Uniform Guidance and links to various supporting documentation surrounding each funding source. This is a valuable and free resource for organizations to utilize when summarizing funds and determining their applicability to the Uniform Guidance. Any amounts subject to the Uniform Guidance are required to be reported separately on the Schedule of Expenditures of Federal Awards (SEFA) to clearly indicate they are funds relating to COVID-19 (for example, on a separate row by CFDA number with “COVID-19” reference).

Confusion surrounding compliance requirements

In many situations, COVID-19 funding was disbursed without clear directive of the requirements associated with the funding. In addition, the annual release of the federal compliance supplement has been delayed, leaving additional confusion surrounding compliance requirements. The delay has left many organizations scrambling to identify and understand the requirements for the use of the federal awards. The 2020 federal compliance supplement (which is applicable for fiscal year-ends June 30, 2020 and beyond) is expected to be released on Aug. 17, 2020, and should shed some light on the compliance requirements for COVID-19 funding. However, the Office of Management and Budget (OMB) has communicated that an addendum will be released sometime in the fall that covers specific compliance requirements related to COVID-19. Unless a waiver is provided by the federal agency, organizations will be expected to be in compliance with the requirements outlined in the 2020 federal compliance supplement addendum relating to COVID-19 funding. The timing of the release of the federal compliance supplement addendum could also lead to delays in the ability for organizations to finalize their Uniform Guidance audit.

What should organizations do now?

Due to the significant delays at the federal level, organizations are encouraged to:

  1. Review the documentation provided by federal sources for the COVID-19 award amounts received
  2. Review the information that is available through the GAQC by federal funding source to fully understand the award and known requirements
  3. Consider reaching out to the federal funding agency directly, where appropriate, to obtain any additional clarification necessary to ensure compliance with federal requirements related to COVID-19 funding

For more information on this topic, or to learn how Baker Tilly not-for-profit specialists can help, contact our team.

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