Shedding Light on Your Single Audit: 2020 Compliance Supplement & UpdatesJanuary 14, 2021

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Danny Martinez, CPA, CGFM®

Managing Directordmartinez@bkd.com

Presenters

Amy Shreck, CPADirectorashreck@bkd.com

Agenda› General Updates› Program-Specific Updates› SEFA Presentation› Documenting Relationship to COVID-19› Bonus Content: Coronavirus Response and Relief

Supplemental Appropriation Act of 2021

› Questions

General Updates

General Updates› Single Audit due dates

*Extension from M-20-26, not related to COVID funding

Year-End Original Due Date Extended Due DateDecember 31, 2019 September 30, 2020 December 31, 2020*March 31, 2020 December 31, 2020 March 31, 2021May 31, 2020 February 28, 2021 May 31, 2021June 30, 2020 March 31, 2021 June 30, 2021September 30, 2020 June 30, 2021 September 30, 2021

FFATA Reporting› For all new & existing programs where reporting is marked “Y” auditors

must consider testing compliance with FFATA

› When reporting is “direct and material” & recipient makes first-tier awards

› CRF not subject to FFATA reporting requirements

› Recommended reporting table for findings

New Programs› CFDA 10.001 – Programs Impacted by COVID Waivers

› CFDA 16.034 – Coronavirus Emergency Supplemental Funding

› CFDA 21.019 – Coronavirus Relief Fund (CRF)

› CFDA 32.006 – COVID-19 Telehealth Program

New Programs› CFDA 84.425 – ESF Education Stabilization Fund Under the

Coronavirus Aid, Relief, and Economic Security Act

› CFDA 84.425 – HEERF Education Stabilization Fund Under the Coronavirus Aid, Relief, and Economic Security Act

› CFDA 93.461 – COVID-19 Testing for the Uninsured

› CFDA 93.498 – Provider Relief Fund

Pre-existing Programs with Changes› CFDA 14.862 – Indian Community Development Block Grant

Program

› CFDA 93.153 – Coordinated Services and Access to Research for Women, Infants, Children, and Youth (Ryan White Program Part D Women, Infants, Children, and Youth WICY Program)

› CFDA 93.914 – HIV Emergency Relief Project Grants

Pre-existing Programs with Changes› CFDA 93.914 – HIV Emergency Relief Project Grants

› CFDA 93.917 – HIV Care Formula Grants

› CFDA 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease

› Student Financial Assistance Cluster (no substantial changes)

New Cluster› Federal Motor Carrier Safety Assistance (FMCSA) Cluster

• 20.218 – Motor Carrier Safety Assistance• 20.237 – Motor Carrier Safety Assistance High Priority Activities

Program-Specific Updates

Coronavirus Relief Fund – CFDA 21.019

Activities Allowed/Allowable Costs› Necessary expenditures incurred due to the public health emergency

with respect to COVID-19

› Not accounted for in the government’s most recently approved budget as of March 2020

› Incurred during the period that begins on March 1, 2020, & ends on December 30, 2020 (issued before recent extension)

› Real property improvements & acquisitions & equipment acquisitions (See Treasury FAQ No. A.58 for more detail)

Activities Allowed/Allowable Costs› Treasury Guidance

› https://home.treasury.gov/system/files/136/Coronavirus-Relief-Fund-Guidance-for-State-Territorial-Local-and-Tribal-Governments.pdf

› Treasury FAQ

› https://home.treasury.gov/system/files/136/Coronavirus-Relief-Fund-Frequently-Asked-Questions.pdf

Period of Performance› Incurred between March 1, 2020, & December 30, 2020

› What does “incurred” mean?

› Impact of extension to December 31, 2021

Reporting› Quarterly financial process report into the GrantSolutions portal

› Verifying information has been input accurately & timely

› https://www.treasury.gov/about/organizational-structure/ig/Pages/CARESAct-Reporting-and-Record-Keeping-Information.aspx

Subrecipient Monitoring› Subrecipient versus beneficiary

› Evaluation of risk of subrecipients

› Subaward terms & conditions

› Monitoring component

› Verification of Single Audit & resolution of deficiencies

Provider Relief Fund› Schedule of Expenditures of Federal Awards (SEFA) reporting

Fiscal Year-End SEFA Expenditure & Lost Revenue Reporting

On or before December 30, 2020 None

December 31, 2020 Based on December 31, 2020, PRF report

January 1, 2021, to June 29, 2021 Based on December 31, 2020, PRF report

June 30, 2021, & after Guidance will be provided in 2021 Compliance Supplement

Provider Relief Fund

Activities Allowed/Allowable Costs› Used to prevent, prepare for, & respond to coronavirus, & that the

payment shall reimburse the recipient only for health care-related expenses or lost revenues that are attributable to coronavirus

› Funds may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse

› Separate criteria for Skilled Nursing Facility Infection Control Distribution program

Reporting› Recipients must report for the calendar year ending December

31, 2020, & the six months ending June 30, 2021, as described in the General & Targeted Distribution Post-Payment Notice of Reporting Requirements issued September 19, 2020, & guidance issued by HRSA subsequent to the date of this supplement

› https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/reporting-auditing/index.html

Higher Education Emergency Relief Fund – CFDA 84.425 E,F,J,K,L,M, & N

Higher Education Emergency Relief Fund – CFDA 84.425 E,F,J,K,L,M, & N› Interim Final Rule, Eligibility of Students at Institutions of Higher

Education for Funds Under the CARES Act• https://www.federalregister.gov/documents/2020/06/17/2020-12965/eligibility-

of-students-at-institutions-of-higher-education-for-funds-under-the-coronavirus-aid

› Frequently asked questions & other guidance• Strongly recommend auditors to regularly check HEERF website. Information

on compliance supplement is current as of October 19, 2020• https://www2.ed.gov/about/offices/list/ope/caresact.html

Allowable Activities/Allowable Costs› Student aid

• Disbursements made directly to students• For expenses related to the disruption of campus operations due to

coronavirus (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care, & child care)

› Institutional portion• Expenses to cover any costs associated with significant changes to the

delivery of instruction due to the coronavirus, with exclusions• Generally, lost revenue is not a permissible expenditure

Allowable Activities/Allowable Costs› For J,K, L, M, & N

• Funds may be used to› Defray expenses, including lost revenue

› Reimbursement for expenses already incurred

› Technology costs associated with a transition to distance education

› Faculty & staff trainings

› Payroll incurred by IHEs

› Grants to students for any component of the student’s cost of attendance

Allowable Activities/Allowable Costs› No specific language authorizing HEERF funds to be used

for the acquisition of real property or for construction

› May be used for minor remodeling to prevent the spread of COVID-19, where such alterations occur within the confines of a previously completed building

Matching, Level of Effort, Earmarking› Institutions must use no less than 50 percent of funds received

under Section 18004(a)(1) of the CARES Act to provide emergency financial aid grants to students for expenses related to the disruption of campus operations due to coronavirus

› The 50 percent division of the (a)(1) funds into the Student Aid Portion & Institutional Portion was made by ED. Each were given as separate grant awards, the Student Aid Portion under CFDA 84.425E & the Institutional Portion under CFDA 84.425F

Period of Performance› All institutions were given one calendar year (365 days) from

the date of award in their HEERF Grant Award Notification (GAN) to complete the performance of their HEERF grant

› Pre-award costs allowed from March 13, 2020, to the date of HEERF grant award

› Student Aid Portion refund period

Procurement Suspension & Debarment› Sufficiently document the rationales & determinations in making

any sole-source awards during the time of the national emergency due to the coronavirus

› Refer to 2 CFR 200.320(f)(2) public exigency or emergency

› Exceptions are more likely to be acceptable the closer the procurement occurred to the March 13, 2020, declaration of the national emergency

Reporting› Annual Reporting (all HEERF grantees)

› Institutional Portion Quarterly Public Reporting (CFDAs 84.425F, 84.425J, 84.425K, 84.425L, 84.425M, 84.425N, as applicable)

› Student Aid Portion Quarterly Public Reporting (CFDA 84.425E)

SEFA Presentation

› General speaking, expenditures are included on the SEFA when• There is an award in place (terms & conditions accepted) &• Expenditures have been incurred

› This could result in different recognition for financial statement purposes than SEFA purposes

› Exception – Provider Relief Fund – SEFA reporting aligns with the reporting requirements required by HRSA

When Should Funds Be Included on the SEFA?

Separate COVID-19 Program Identification› Nonfederal entities should separately identify COVID-19-related

awards on the SEFA & the data collection form

Personal Protective Equipment (PPE)› Nonfederal entities that received donated PPE should provide

the fair market value of the PPE at the time of receipt as a standalone footnote accompanying their SEFA

› The amount of donated PPE SHOULD NOT be counted for purposes of determining the threshold for a Single Audit or determining Type A/B threshold

› Donated PPE is not required to be audited as a major program› The donated PPE footnote may be marked “unaudited”

Documenting Relationship to COVID-19

Coronavirus Response and Relief Supplemental Appropriations Act of 2021

Issue Area Location in Bill Text

Summary Oversight/Admin Agency

Coronavirus Relief Fund (CRF) Spend Extension

Division N, Title X, Sec. 1001

Spend date extended until December 31, 2021

U.S. Treasury Office of the Inspector General

Education Funding (Schools)

Division M, Title III, Sec. 311

Total funding included = $82 billion

U.S. Department of Education

Employee Retention Tax Credit

Division EE, Title II, Sec. 207

Extends credit until July 1, 2021, & includes higher education & hospitals as eligible

Department of Labor

Federal Paid Leave FFCRA leave requirement expired December 31, 2020, & was NOT extended

Legislation Highlights

Source: Government Finance Officers Association (gfoa.og/flc-December-covid-relief-analysis)

Issue Area Location in Bill Text Summary Oversight/Admin AgencyTransportation Division N, Title IV,

Beginning Sec. 401Total funding included = $45 billion

Federal Aviation Administration, Federal Transportation Administration

Unemployment Insurance

Division N, Title II, Sub. A, Beginning Sec. 200

Total funding included = $120 billion

Administered through state agencies

Health Care COVID Relief Spending

Division M, Title III Total funding included = $69 billion

Health & Human Services, CDC, National Institutes of Health

Legislation Highlights

Source: Government Finance Officers Association (gfoa.og/flc-December-covid-relief-analysis)

Issue Area Location in Bill Text Summary Oversight/Admin Agency

Broadband Division N, Title IX, Sec. 901-903

Total funding included = $7 billion Federal Communications Commission

Municipal Liquidity Facility

Division N, Title X, Sec. 1005

Federal Reserve retains the ability to create emergency lending facilities under Section 13(3) of the Federal Reserve Act.

Federal Reserve

Water Division H, Title II, Sec. 503

Low-income Water Utility Bill Assistance ($638 million)

Department of Labor/HHS

Disaster Assistance

Division M, Title II, Beginning Sec. 201

Total funding included = $2 billion Federal Emergency Management Agency

Legislation Highlights

Source: Government Finance Officers Association (gfoa.og/flc-December-covid-relief-analysis)

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The information contained in these slides is presented by professionals for your information only & is not to be considered as legal advice. Applying specific information to your situation requires careful consideration of facts & circumstances. Consult your BKD advisor or legal counsel before acting on any matters covered