Published: December 23, 2020
In July, we told you about changes to the single audit due dates and information required to be reported on the Schedule of Expenditures of Federal Awards (SEFA). Additional guidance was published in the 2020 Compliance Supplement Addendum on Dec. 22, 2020, by the U.S. Office of Management and Budget. As you read through the entire addendum, here are some key items for your attention:
Single audit due dates
The Addendum contained a 3-month single audit due date extension for certain entities having a year-end in 2020 and that received COVID-19 funding.
The affected yearends and new due dates are:
|Fiscal Year Ended||Original 9-month Due Date||Extended Due Date|
|Jan. 31, 2020||Oct. 31, 2020||Jan. 31, 2021|
|Feb. 28, 2020||Nov. 30, 2020||Feb. 28, 2021|
|March 31, 2020||Dec. 31, 2020||March 31, 2021|
|April 30, 2020||Jan. 31, 2021||April 30, 2021|
|May 31, 2020||Feb. 28, 2021||May 31, 2021|
|June 30, 2020||March 31, 2021||June 30, 2021|
|July 31, 2020||April 30, 2021||July 31, 2021|
|Aug. 31, 2020||May 31, 2021||Aug. 31, 2021|
|Sept. 30, 2020||June 30, 2021||Sept. 30, 2021|
Note: If the due date falls on a weekend or federal holiday, it changes to the next business day.
No application or approval is needed to use the three month extension. Entities that take advantage of the extension period must document the reasons for doing so, which does not jeopardize their future qualification for “low risk” status under 2 CFR §200.520.
Entities that did not receive COVID-19 funding do not qualify for this extension.
Remember the addendum only affects one of the criteria for determining the actual audit submission due date. Under federal law (2 CFR §200.512), the entity’s due date for an audit submission is the earlier of 1) 30 calendar days after receipt of the audit report, or 2) nine months after the end of the audit period (plus extension).
Schedule of expenditures of federal awards (SEFA)
Additional SEFA guidance was also issued in the Addendum for:
- Provider Relief Program (CFDA 93.498) (PRF) –
- This program, including lost revenue, will be first reported on the SEFA for years ending on or after Dec. 31, 2020. No amounts related to this program are to be reported on the SEFA for fiscal years ending prior to that date.
- For fiscal years ending Dec. 31, 2020, and in 2021 on or before June 29, 2021, the footnotes to the SEFA will contain a disclosure stating that the amount reported (including lost revenue) is based on the Dec. 31, 2020, PRF report to the U.S. Department of Health and Human Services.
- Donated personal protective equipment (PPE) – Some entities received donations of PPE from federal or pass-through agencies for use in their COVID-19 response activities, without an indication of its value.
- Receiving entities should assign a value to the PPE based on its fair market value and report it in a footnote to the SEFA. The value would not be reported with federal program expenditures on the SEFA and may be marked “unaudited.”
- The value of the PPE is not counted toward the federal single audit threshold, nor will it be included in the process of selecting federal programs for the single audit.
- Education Stabilization Fund under the CARES Act (CFDA 84.425) –
- This funding was subdivided into programs as indicated by letters (84.425A – 84.425P) and some further grouped by those covered by the Education Stabilization Fund and by the Higher Education Emergency Relief Fund.
- The SEFA should list the expenditure amounts by individual program, including the letter (e.g. 84.425C, 84.425D, 84.425E, 84.425F), and include a total for the entire program (84.425).
- The program as a whole will be considered in the process of selecting federal programs for the single audit.
Finally, State Auditor Pat McCarthy has encouraged entities to “Document, Document, Document” as it relates to expenditures of COVID-19 awards. The Addendum directs auditors to consider the awarding agency guidance existing at the time of the expenditure when determining compliance with applicable requirements. Some guidance has changed over time. Therefore, it will be especially important for that documentation to demonstrate how the expenditure met the requirement at the time.
The Office of the Washington State Auditor understands all of us in government are working in extraordinary circumstances. We will continue to monitor the situation and keep you apprised of any further developments. Please also remember, we are here to help governments across Washington. Contact your audit team or submit a help desk question on the SAO website.