Subrecipient or Beneficiary? Determining if Your CRFs Are Subject to Single Audit
If your organization indirectly received Coronavirus Relief Funds (CRF) (not directly from the U.S. Department of the Treasury), you may have assumed that you were a subrecipient and these funds would be included on your Schedule of Expenditures of Federal Awards and subject to Single Audit. However, according to this frequently asked questions (FAQ) document issued by the Treasury Office of Inspector General (OIG-CA-20-028), organizations classified as a “beneficiary” would not be subject to Single Audit requirements or subrecipient monitoring.
Under OMB Uniform Guidance, only individuals are referenced as being beneficiaries, but through FAQs 2 and 3, the Treasury has created its own definition of beneficiary, which includes entities, e.g., businesses, nonprofits, and educational institutions. If a prime recipient or pass-through entity is providing funds to an organization for its own use, e.g., business interruption, salaries, etc., those entities typically would be considered beneficiaries and, therefore, the CRF funds would not be subject to Single Audit requirements or subrecipient monitoring.
It is the responsibility of the pass-through entity to determine whether the recipient organization is a beneficiary or a subrecipient and communicate necessary information. If such information has not been communicated to your organization, we recommend requesting clarification from the granting agencies.
For more information, reach out to your BKD Trusted Advisor™ or submit the Contact Us form below.