Single Audit Requirements for CARES Act Loan Funds

When nonprofits began to access the emergency loan funds available under the CARES Act, it was unclear how this government relief from the U.S. Small Business Administration (SBA) would affect their single audit requirements. This week, we received clarity on this issue from the AICPA’s Government Audit Quality Center (GAQC).

The GAQC has informed the nonprofit community that loans received through the Paycheck Protection Program will not be subject to the Uniform Guidance Single Audit requirements. These loans are not made directly through the SBA, but rather through financial institutions providing SBA funds.

Loans received through the SBA’s Economic Injury Disaster Loan (EIDL) program, however, will be subject to the Uniform Guidance Single Audit requirements because they are disbursed directly from the SBA to the borrower, and will be considered federal financial assistance.

Keep in mind that single audits are only required when a nonprofit expends greater than $750,000 of total federal financial assistance during their fiscal year. EIDL funds will need to be included in this total number when determining the need for a single audit, but PPP funds will not.

For more information on accessing emergency relief during the COVID-19 crisis and its impact on your single audit requirements, please contact David M. Rottkamp, Not-for-Profit Practice Leader, at drottkamp@grassicpas.com or 212.223.5046.


David M. Rottkamp David M. Rottkamp, CPA, is an Audit Partner, Nonprofit Practice Leader, at Grassi. David has over 34 years of experience providing audit and advisory services to the nonprofit and health care industries.  David focuses on organizations serving individuals with special needs, religious organizations, educational institutions, membership associations, social service providers, healthcare providers, foundations, and the arts and culture world. David’s technical knowledge allows him... Read full bio

Categories: Advisory