OMB Extends Due Date for Certain Single Audits

OMB Extends Due Date for Certain Single Audits

The Office of Management and Budget (OMB) issued a memorandum on March 19th, which announced a six-month extension of the due date for certain single audits submitted to the Federal Audit Clearinghouse. 

The memorandum outlines the OMB’s efforts to supplement the support in the American Rescue Plan Act of 2021 (ARP), promote public trust in the Federal Government’s stewardship of taxpayer resources, and alleviate some of the administrative challenges related to the coronavirus pandemic. 

The OMB is extending authority to federal awarding agencies to grant specific exceptions to recipients affected by the pandemic. These exceptions are allowed, regardless of whether the federal financial assistance awards received were related to COVID-19. Exceptions include delayed filing requirements, expiring award extensions, and other disaster relief flexibilities. Most notable, the memorandum states:

“Awarding agencies, in their capacity as cognizant or oversight agencies for audit, should allow recipients and subrecipients that have not yet filed their single audits with the Federal Audit Clearinghouse as of the date of the issuance of this memorandum that have fiscal year-ends through June 30, 2021, to delay the completion and submission of the Single Audit reporting package, as required under Subpart F of 2 CFR § 200.501 to six months beyond the normal due date.”

Individual recipients and subrecipients are not required to seek approval for the extension by the audit oversight agency. The memorandum does advise recipients and subrecipients to maintain documentation supporting the reason for their delay in filing their single audit. 

For awarding agencies, there is no further action that needs to be taken to enact this extension. Agencies must apply the Uniform Guidance to federal financial assistance funded through the ARP to the maximum extent authorized by law. This stipulation includes financial awards to for-profit organizations. The memorandum states that agencies should “develop a set of standard terms and conditions that are clear and transparent for awards to for-profit organizations,” meaning they should consider whether or not a Single Audit is most appropriate.

Distinct and intricate compliance and reporting requirements accompany the many benefits of Federal aid. Over the last year, many nonprofit organizations and for-profit businesses have received more federal aid than they are accustomed to through the relief programs established by the CARES Act and other legislation enacted since the onset of the COVID-19 pandemic. Some of these entities will be subject to Single Audits for the first time this year. 

Agencies must “perform a risk analysis of ARP programs and request OMB to designate any higher risk programs as Single Audit major 8 programs, i.e., programs which must be tested in a particular year.” The Compliance Supplement will inform auditors of compliance requirements that should be tested.

Additionally, before program administration and award issuance, agencies must submit their proposed implementation of the Uniform Guidance for OMB-approval.

More information on COVID-19-related government auditing developments, including new guidance from the U.S. Department of Education on the latest funding under the Higher Education Emergency Relief Fund and the SBA’s information on the Provider Relief Fund and Shuttered Venue Operators Grant, may be found in the AICPA Governmental Audit Quality Center’s March 24th Alert.

The FASB issued ASU 2021-03, Intangibles—Goodwill and Other (Topic 350): Accounting Alternative for Evaluating Triggering Events, on March 30th. The ASU provides private companies and not-for-profit organizations an accounting alternative expected to reduce the complexity when evaluating a goodwill triggering event. The ASU is effective on a prospective basis for fiscal years beginning after December 15, 2019. If your interim or annual financial statements have not yet been issued or made available for issuance as of March 30, 2021, early adoption is permitted.

Contact ARB

ARB’s Nonprofit Advisory Services Team helps nonprofits stay on the leading edge at any stage of financial growth. Our team provides resources, legislative updates, best practices, and services tailored to your industry and organization’s needs. Contact me today to discuss your organization’s Single Audit requirements and other accounting and advisory needs.

Visit our COVID-19 Financial Resource and Tax Center for information on related matters and check out these additional ARB insights on matters that may affect your organization:

American Rescue Plan Act of 2021: What Business Taxpayers Need to Know

Is Your Organization Subject to a Single Audit This Year?

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