The Small Business Administration (SBA) has been issuing quite a bit of clarifying guidance and a number of interim final rules over the past few weeks since administering the original round of funding connected with the CARES Act.
One question that’s been lingering is whether the funds provided under the Paycheck Protection Program (PPP) or the Emergency Injury Disaster Loans (EIDL) are, in fact, federal awards for not-for-profit entities, and if they’re subject to the Single Audit Act, which generally requires audits of federal awards that exceed $750,000.
Well, good news (at least partially)! According to Alert No. 404, released by the AICPA’s Government Audit Quality Center – of which Schneider Downs is a member – the SBA will not consider funds received under the PPP to be federal awards. Loans made under the EIDL, however, are considered to be federal financial assistance and will be subject to the Single Audit requirement.
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.