Single Audit Extensions for COVID-19 Programs Discussed in Compliance Supplement Addendum
Language in the 2020 revisions to the Office of Management and Budget’s (OMB) uniform guidance now defines the usage of “must” (i.e., a requirement) and “shall” (i.e., a best practice) within the document. Where exactly does the terminology “strongly recommend” fit within OMB’s spectrum?
OMB yesterday finally released a long-awaited addendum to its 2020 Compliance Supplement to address auditor responsibilities for testing programs created under the CARES Act and other stimulus bills in response to the COVID-19 pandemic, as well making a few other random updates. However, due to a backup of emergency submissions at the Federal Register, an official notice about the addendum will not be included in the Federal Register for some time. We at Thompson Grants are preparing an article providing details on the addendum for our subscribers that will be posted on Monday. However, we thought we’d focus on one aspect here within the new document — a discussion on single audit due dates in Appendix VII of the addendum.
OMB states in the addendum that in light of the late issuance of audit guidance for the COVID-19 programs contained in the addendum, awarding agencies, in their capacity as cognizant or oversight agencies for audit, must allow recipients and subrecipients that received COVID-19 funding with original single audit due dates from Oct. 1, 2020, through June 30, 2021, an extension for up to three months beyond the normal due date to submit their single audit reporting package. No further action by awarding agencies is required to enact this extension, and the extension does not require individual recipients and subrecipients to seek approval for the extension by the cognizant or oversight agency for audit. However, recipients and subrecipients should maintain documentation of the reason for the delayed filing, and they should be aware that they would still qualify as a “low-risk auditee” (§200.520(a)).
However, due to the large size of the COVID-19 programs, OMB “strongly encourage(d) auditees and auditors to complete and submit their relevant portions of single audit reporting packages for fiscal year ends, subject to the provisions of the extension described herein, as early as possible prior to the normal due dates of the earlier of 30 days after the receipt of the auditor’s reports or nine months after the fiscal year end date.”
The language in the addendum also cited discussion in the 2020 Compliance Supplement stating that although OMB Memoranda M-20-11 and M-20-17 provided some extension for submission of single audit reporting packages for recipients and subrecipients impacted by COVID-19, both of these memoranda were rescinded with OMB Memorandum M-20-26.
Auditors and auditees should review all the details in the addendum to stay up-to-date on their audit responsibilities.