COVID-19 COMPLIANCE UPDATE - Rochelle Alcon, CPA Hattie Mitchell, CPA, CFE The information provided herein is for informational purposes only and ...
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COVID-19 COMPLIANCE UPDATE Rochelle Alcon, CPA
Hattie Mitchell, CPA, CFE
The information provided herein is for informational purposes only and should not be construed as financial, investment, tax, accounting or legal advice.
OVERVIEW
Background
Different types of COVID-19 funding through new or existing
programs
Updates to new COVID-19 related funding
Audit considerations
Resources
2
BACKGROUND
Five relief laws, including the CARES Act, have been enacted as of
January 31, 2021
As of January 31, 2021, of the $3.1 trillion appropriated by these five laws
for COVID-19 relief, the federal government had obligated a total of $2.2
trillion and expended $1.9 trillion, as reported by federal agencies
CARES Act includes a provision for GAO to report on its ongoing
monitoring and oversight efforts related to the COVID-19 pandemic
Sixth relief law in March 2021: American Rescue Plan Act of 2021
3
Excellence
BACKGROUND (CONT’D)
OMB issued guidance beginning in March 2020 that identified
temporary exceptions to grants management requirements Federal
agencies could make available to their grantees, as the agencies
deemed appropriate and to the extent permitted by law
OMB made most of these exceptions available for between 3 and 5
months; all have been rescinded or expired as of December 2020.
4
BACKGROUND (CONT’D)
OMB issued Promoting Public Trust in the Federal Government
through Effective Implementation of the American Rescue Plan
Act and Stewardship of the Taxpayer Resources, M-21-20
(Washington, D.C.: Mar. 19, 2021).
Appendices:
Management of Payment Integrity Risk
Achieving More Equity-Oriented Results
Disaster Relief Flexibilities to Reduce Burden
5COVID-19 FUNDING – (THROUGH FIRST 4
RELIEF BILLS)
2020 Compliance Supplement Addendum
Includes the 14 COVID-19 funded programs and one new non-COVID-19
program highlighted in yellow.
Part 2 matrix shows 8 new COVID-19 funded programs, 6 pre-existing
program supplements to which COVID-19 funding and compliance
requirements have been added, and 1 new non-COVID-19 program.
Part 4 coverage of new or existing programs with new compliance
requirements as a result of COVID-19 funding.
6COVID-19 FUNDING – LARGEST 4 NEW PROGRAMS
Payment Protection Program Provider Relief Fund
($>600B) ($175B)
Federal Agency: SBA Federal Agency: HHS
For-profits, NFPs For-profits, NFPs, Governmental Entities
Is NOT subject to Single Audit IS subject to Single Audit
CFDA No: 59.073 CFDA No: 93.498
Coronavirus Relief Fund Educational Stabilization Fund
($150B) ($>600B)
Federal Agency: Treasury Federal Agency: Education
Governmental Entities and Tribes States, Schools, IHE
IS subject to Single Audit IS subject to Single Audit
CFDA No: 21.019 CFDA No: 84.425CORONAVIRUS RELIEF FUND (CRF) – 21.019
Purpose of the Coronavirus Relief Fund (the Fund) is to provide
direct payments to state, territorial, tribal, and certain eligible
local governments to cover:
Necessary expenditures incurred due to the public health emergency
with respect to Coronavirus Disease 2019 (COVID–19);
Costs that were not accounted for in the government’s most recently
approved budget as of March 27, 2020; and
Costs that were incurred during the period that begins March 1, 2020.
8CORONAVIRUS RELIEF FUND (CRF) – 21.019
9CORONAVIRUS RELIEF FUND (CRF) – 21.019
Guidance started to level out with the last updates to the FAQs
dated 10.19.20
U.S. Treasury issued guidance on 11.20.20 to help clarify
beneficiary vs. sub-recipient, i.e., beneficiaries not subject to
single audit
U.S. Treasury issued guidance on 11.25.20 to help clarify
reporting and recording keeping (Grant Solutions)
1.15.21 – CRF Guidance, Q&A and updates from CAA 2021
published in the Federal Register
10PROVIDER RELIEF
FUND – 93.498
The Provider Relief Fund (PRF) is
administered by the Health Resources
and Services Administration (HRSA) and
provides relief funds to hospitals and
other healthcare providers, including
those on the front lines of the
coronavirus response. The funding
supports healthcare-related expenses or
lost revenue attributable to COVID-19
and ensures that uninsured Americans
can get treatment for COVID-19.
11PROVIDER RELIEF FUND – 93.498
12PROVIDER RELIEF FUND – 93.498
Generally, expenditures are reported on the SEFA when costs
(or lost revenue, as applicable) are incurred and an award is
determined to exist (except for PRF)
Impacts what is reported on the SEFA
Difference between accounting records and SEFA, reconcile with footnote
13SOME EXISTING PROGRAMS ALSO HAD COMPLIANCE
REQUIREMENT CHANGES DUE TO COVID-19
Student Financial Assistance Cluster (SFA)
USDA food programs
Certain HUD housing program
Assistance
2020 Compliance Supplement
14CAA FY 2021 – SIGNIFICANT RELIEF PROVISIONS
Summary of Tribal Related Provisions
Economic Assistance – CRF extension, Unemployment and
Small Business
Health Care
Agriculture and Nutrition
Housing
Education
Broadband
15AMERICAN RESCUE PLAN ACT (ARPA)
Signed into law March 11, 2021
$1.9 Trillion in federal relief/stimulus
$350 Billon allocated to states, local and tribal governments
$20 Billion to Tribal Governments
Funding more directly provided to local governments
16AMERICAN RESCUE PLAN ACT (ARPA)
Issued May 10, 2021
$20 billion reserved for Tribes will be allocated as follows:
Treasury will equally divide $1 billion among all eligible Tribal
Governments
Not using HUD IHBG numbers
Remaining $19 billion allocation will be based 1) Enrollment and
2)Employment data
17AMERICAN RESCUE PLAN ACT (ARPA)
Issued May 10, 2021 – Payment Schedule
Payment #1
Equal allocation of each Tribal government from the $1 billion
Tribal government’s pro rata share of the 65% of $19 billion ($12.35
billion) based on tribal enrollment
Payment #2
Tribal government’s pro rata share of the reaming 35% of the $19
billion ($6.65 billion) based on Tribal employment (2019 numbers)
18AMERICAN RESCUE PLAN ACT (ARPA)
Breaking News – issued May 10, 2021 – Due dates
Payment #1
The deadline to complete the first submission is June 21, 2021 at 11:59
PM PST (more of a request of recovery monies)
Payment #2
The deadline for confirming or amending a Tribal government’s 2019
employment numbers is July 9, 2021 at 11:59 PM PST. If a Tribal
government does not confirm or amend employment numbers by that
deadline, the Tribal government will not be eligible to receive a share
of the employment allocation.
19AMERICAN RESCUE PLAN ACT (ARPA)
U.S. Department of the Treasury will host an Information
Session on the Reporting and Compliance of $20 billion State
and Local Fiscal Recovery Funds to Tribal Governments – June
28, 2021 3:00- 4:00pm (Eastern Time)
20AMERICAN RESCUE PLAN ACT
Eligible Uses:
To respond to the public health emergency or its negative economic
impacts
To respond to workers performing essential work during the COVID-19
public health emergency by providing premium pay to eligible workers
For the provision of government services to the extent of the
reduction in revenue due to the COVID–19 public health emergency
relative to revenues collected in the most recent full fiscal year prior to
the emergency, and
To make necessary investments in water, sewer, or broadband
infrastructure
21AMERICAN RESCUE PLAN ACT
Ineligible Uses:
Cannot be spent on state or local pensions
State governments are prohibited from spending to replace revenue
declines resulting from tax cuts enacted since March 3, 2021
22AMERICAN RESCUE PLAN ACT
From the U.S. Treasury Interim Guidance
Costs incurred. A cost shall be considered to have been incurred for purposes
of paragraph (a) of this section if the recipient has incurred an obligation with
respect to such cost by December 31, 2024
Return of funds. A recipient must return any funds not obligated by
December 31, 2024, and any funds not expended to cover such obligations
by December 31, 2026.
Unliquidated financial obligations means, for financial reports prepared on a cash
basis, financial obligations incurred by the non-Federal entity that have not been paid
(liquidated). For reports prepared on an accrual expenditure basis, these are financial
obligations incurred by the non-Federal entity for which an expenditure has not been
recorded (Section 200.1 of Uniform Guidance)
23AMERICAN RESCUE PLAN ACT
Reporting Requirements
Subject to the provisions of the Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards (2 CFR
200) (the Uniform Guidance)
Certain regular reporting requirements (depending on the use)
Additional Guidance from Treasury
Increased oversight (OIG office and/or new Office)
Final Regulations still pending
24AMERICAN RESCUE PLAN ACT – OTHER
Look at community needs
ARPA funding is temporary, so its use should be focused on
non-recurring expenditures
Consider an investment plan for the funding
Expect and prepare for change in guidance
25AUDIT CONSIDERATIONS
What COVID-19 funding has the Tribe received?
Through existing awards or new awards
What COVID-19 funding is subject to Single Audit?
Nontraditional awards, such as the Coronavirus Relief Fund, Provider Relief
Fund and Educational Stabilization Fund are subject to Single Audit
However, the Payment Protection Program Loan is not subject to Single Audit
Is COVID-19 funding recorded in separate funds and/or programs?
This is important so the Tribe can keep track of which funding belongs to
which nontraditional or traditional awards
Ensures the Tribe is not double-dipping
26AUDIT CONSIDERATIONS (CONT’D)
SEFA Preparation – separately identify funding sources specifically
related to COVID-19 by Assistance Listing Number and Title
What documentation is available to determine program
requirements?
Treasury FAQs, OMB Memos, Supplemental Fact Sheets, Guidance
Documents, Federal Agency Websites, GASB Technical Bulletins, etc.
Can the audit continue to be performed remotely due to COVID-19
restrictions?
Creatively, audits often can be done remotely!
27OTHER CONSIDERATIONS …
Treasury continues to update and issue guidance.
OMB has issued the 2021 Compliance Supplement.
Know what your reporting requirements are
Ensure written justification documentation.
Implement/revise policies and procedures to support
costs/expenditures charged to each program
Know how the expenditures tie into the pandemic
28Resources
RESOURCES
AICPA – Governmental Audit Quality Center (GAQC)
Treasury and Treasury OIG Resources (website)
OMB Compliance Supplement/Addendum and related guidance
CFRs and actual legislation signed by the President
Treasury’s OIG Resources (Reporting)
GASB Technical Bulletin No. 2020-1
Department of Treasury Interim Final Rule (ARPA)
2 CFR Revised FAQ (www.cfo.gov/financial-assistance/)
29Hattie Mitchell, CPA, CFE Rochelle Alcon, CPA
Senior Manager, Principal
Tribal Consultant ralcon@redw.com
hattie.mitchell@redw.com 505.998.3486
623.469.0058
QUESTIONS? Ask us!
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