Our clients routinely ask us questions about how to account for the proceeds from various programs that have received new or additional funding due to COVID-19. As you can likely relate, finding the answers has been a bit of a moving target, as new guidance seems to come out just as we thought we had it all figured out.
As you think ahead for your audit preparation, we want to share some information sources that may help you determine which grants will need to be included in your schedule of expenditures of federal awards.
The Governmental Audit Quality Center (GAQC) of the AICPA has a nonauthoritative summary of information about the federal programs established as a result of the COVID-19 pandemic. The GAQC updates this summary as information becomes available. If you have received any of these grants, that federal program will need to be included on your schedule of expenditures of federal awards if the column indicates that uniform guidance applies. Be aware that when determining which major program(s) your auditor will test, all funding included in 84.425 in the Education Stabilization Fund will be considered under one program. For FID reporting and to assist in testing purposes, the information will still need to be tracked separately for each grant and provided to your auditor to determine what level of testing may be required for each program.
Now that you have determined which grants are required to be reported on your schedule of expenditures of federal awards, the question remains as to the amount to report and when the amounts should be reported. The GAQC has issued nonauthoritative guidance on reporting certain COVID-19 awards on an accrual based SEFA. This document provides some background on how amounts should be reported and helpful scenarios to consider.
Be prepared to share with your auditor any new or additional funding source information that was received during the year to ensure the numbers reported on the schedule of expenditures of federal awards are accurate and that the footnote disclosures are informative to the users of your financial statements.
If you have questions as you prepare this year’s schedule of expenditures of federal awards, please reach out to your Yeo & Yeo professional for assistance.