KTADDITION
THE
Winter 2022 - 6
A Publication of Ketel Thorstenson, LLP
COMMERCIAL COVID GRANT FUNDING Shelley Goodrich, CPA, Director, Audit Department
Shelley Goodrich, CPA, Director, Audit Department
Over the past 18 months, many commercial entities have received federal grant funding for the first time due to COVID-19. The information regarding how and when to use such grant funds has been limited, vague, or not provided until months after funding is received. To further complicate things, guidance is continually changing. Entities expending more than $750,000 of federal grant funding in a year are required to have a financial statement and compliance audit referred to as a Single Audit. Organizations without prior audit requirements may now have an audit requirement due to federal funding received/spent during 2020/2021. As these federal funds are new and have limited or changing guidance, receiving organizations should work with their accounting firms and granting agencies to ensure compliance.
Proper documentation is also key in that was reported as having been the future when granting agencies spent with payroll, those same or auditors have questions. payroll funds cannot be spent again on PRF. Most expenses are Single Audits are conducted allowed to be charged to PRF if under Subpart F of the Office they are used in preparing for and/ of Management and Budget’s or responding to the pandemic. (OMB) Uniform Administrative Additional examples include costs Requirements, Cost Principles, and incurred to purchase personal Audit Requirements for Federal protective equipment, barriers Awards. OMB annually issues a for social distancing, expanded Compliance Supplement, which hardware or software to allow for identifies compliance requirements remote work by employees, or and suggests audit procedures enhancing telemedicine, just to for numerous federal grant name a few. If payroll is being programs. The 2021 Compliance considered as a PRF expense, Supplement (July 2021), and an remember it must have a COVID addendum for specific programs tie. A nurse working a shift to treat unrelated to commercial entities non-COVID patients in the normal (December 2021) were issued course of business is not allowable. to address COVID funding. In addition to COVID-related One common grant received expenses, organizations can by healthcare service businesses also use PRF monies for lost was Provider Relief Funds (PRF). revenue. For these instances, Entities that received monies businesses will enter quarterly include, but are not limited to, information for two years into the medical and dental practices, Health Resources and Services nursing homes, assisted living Administration (HRSA) portal facilities, vision practices, and and lost revenue will be calculated behavioral health practices. This based on quarterly figures. An money has been disbursed through entity might have more revenue several different phases. The in calendar 2020 than in 2019, but first payments were deposited in may have losses by quarter for the bank accounts on April 10, 2020, PRF lost revenue calculation. and payments are continuing. Normally, federal funding The PRF expenses must have is reported on a Schedule of a direct COVID affiliation and Expenditures of Federal Awards cannot be reported as having been (SEFA) when funds are spent. spent on PRF if already reimbursed However, PRF funding is reported from another grant. For example, on the SEFA depending on when if a business received a Paycheck organizations are required to Protection Program (PPP) loan report in the HRSA portal. See (Commercial COVID Grant Funding continued on page 7)
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