Changes to Single Audit Guidance Issued by OMB on Single Audit Due Dates
On June 18, the Office of Management and Budget (OMB) issued Memorandum 20-26 (M-20-26). This memorandum provides guidance on exceptions allowing federal awarding agencies to grant various administrative, financial, and audit requirement flexibilities to their recipients. It also extends flexibilities that were communicated in previous memorandums that have expired and changes previously issued guidance. The administrative relief exceptions are:
Allowability of Salaries & Other Project Activities – The OMB clarified that while awarding agencies may continue to allow recipients to charge salaries and benefits to federal awards, payroll costs paid with Paycheck Protection Program (PPP) loans or any other federal Coronavirus Aid, Relief, and Economic Security Act programs must not also be charged to current federal awards, as this would result in the federal government paying for the same expenditures twice. Therefore, it’s important that organizations maintain clear documentation on which funding source was used to pay for the expenses. In addition, due to the limited funding resources, recipients should exhaust other funding sources to sustain their workforce and implement necessary steps to save overall operational costs, such as rent negotiations, during the pandemic period, as well as retain documentation of those efforts.
Extension of Single Audit Submission & COVID-19 Emergency Acts Fund Reporting – The OMB changed previously issued guidance provided in Memorandum 20-17, which provided a six-month audit extension for audits in accordance with 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) for year-ends through June 30, 2020. This memorandum expired on June 16, 2020, and the OMB issued M-20-26, which rescinded the extension noted above and provided a different extension based on the original due dates as noted below:
*Per Section 200.512 of the Uniform Guidance, if the due date falls on a Saturday, Sunday, or a federal holiday, the reporting package is due the next business day.
Therefore, there’s no audit extension for any 2020 year-ends. The extension doesn’t require individual recipients and subrecipients to seek approval for the extension, and it won’t affect the organization’s low-risk auditee evaluation. However, recipients and subrecipients should maintain documentation of the reason for the delayed filing.
Finally, the memo requires the schedule of expenditures of federal awards and any audit findings to separately identify COVID-19 Emergency Acts funding. More is expected to be included on this in the compliance supplement, which hasn’t yet been released. The provisions in this memo expire September 30, 2020.
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