On December 22, 2020, the Office of Management and Budget approved and posted the Compliance Supplement Addendum for COVID-19 programs administered in 2020. This addendum is effective for audits beginning after June 30, 2019.
The reason for the addendum is to provide guidance for entities with COVID-19 program expenditures that may be major federal programs under 2 CFR 200 Subpart F which describes the need for the audit of federal programs at non-federal entities as known as a single audit. Among the new COVID-19 programs are the Coronavirus Relief Fund, COVID-19 Telehealth Program Education Stabilization Fund Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, COVID-19 Testing for the Uninsured, and Provider Relief Fund among other programs.
It should be noted that the addendum is to be utilized if one of the new grants listed in the addendum rises to the level of a major program to be tested in the single audit. Also, if the entity’s single audit has already been completed and issued before the release of this addendum, the addendum is not to be applied to the completed audit as specified by Appendix VII of the 2020 compliance supplement issued in August 2020.
Other changes disclosed in the compliance supplement is an additional requirement related to the Reporting compliance supplement in conjunction with the Federal Funding Accountability and Transparency Act (FFATA). Recipients of grants or cooperative agreements who make sub-awards of $25,000 or more are required to register in the Federal Funding and Accountability and Transparency Act Subaward Reporting System (FSRS).
Appendix VII in the addendum includes other audit advisories related to single audit extended due dates, treatment of donated protective equipment (PPE) on the Schedule of Expenditures of Federal Awards (SEFA), and agency guidance document references throughout the pandemic.
A copy of the 118-page Compliance Supplement Addendum can be found at the Office of Management and Budget’s website here, under the Office of Federal Financial Management. If you should have a question related to how this may affect your audit, please contact Barnes Dennig. We’re here to help.