looking over financial data

In recent blog published by Deltek, Baker Tilly shared top questions we encounter related to the Paycheck Protection Program (PPP). Addressed in the blog are the following questions:

  • My company performs government contracts and we received a PPP loan. If the SBA forgives our loan, do we have to give the government credits on our contracts?
  • My company’s PPP Loan amount is $2 million, but we incurred more than $4 million in payroll costs during the 24-week application period. How do I know which payroll costs we need to credit?
  • Only 15% of my company’s work is federal government cost-reimbursement contracts; the rest is Labor Hour (LH) and Firm-Fixed Price (FFP) contracts. The DCAA’s audit guidance doesn’t mention those. We didn’t include payroll from the cost-reimbursement work in our forgiveness application. Will the government have an interest in the forgiven payroll costs related to our LH and FFP contracts?
  • How should the receipt of the PPP Loan proceeds be recorded in the General Ledger?
  • What steps should the company take to determine the best use of the PPP Loan proceeds?
  • Can you provide some best practices for how to calculate that projection of impact on rates?
  • What about projecting the impact of these higher or lower rates on billing and revenue?

For more information on this topic, or to learn how Baker Tilly government contract specialists can help, contact our team.

Brent Calhoon
Partner, CPA
Healthcare data and cybersecurity risk management on an ipad
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