In response to the COVID-19 pandemic, Paycheck Protection Program (PPP) loans, administered under the Small Business Administration (SBA) 7(a) guaranty loan program, are being provided through local financial institutions. These loans have been made available to both for-profit and nonprofit organizations.

PPP Loan Guidance

A common question GHJ has received is whether PPP loans obtained by nonprofit organizations are subject to the Uniform Guidance Single Audit requirements. The good news is that GHJ was alerted today that the SBA has informed the AICPA Government Audit Quality Center (GAQC) that PPP loans made to nonprofit organizations will NOT be subject to the Uniform Guidance Single Audit requirements.

EIDL and Other Loans Guidance

However, the SBA informed the GAQC that loans made to nonprofit organizations under the Economic Industry Disaster Loan (EIDL) program are considered to be a direct loan program disbursed from SBA to loan recipients. Therefore, these loans are considered federal financial assistance and ARE subject to the Uniform Guidance Single Audit requirements.

Other Funding Sources

The above addresses one concern that was discussed in GHJ’s recent nonprofit blog about PPP loans and Single Audits, however there is still no definitive guidance regarding the impact of other funding sources and whether previously funded payroll costs under certain government contracts will have to be returned to the government agency once forgiveness occurs.

Please reach out to GHJ’s COVID-19 Response Team if you have any questions as the firm has an experienced team of consultants specializing in cash-flow projections, strategy and operations consulting and re-organizations. We are here to assist organizations to succeed in these very challenging times.

Wilson Donella halfbody

Donella Wilson

Donella Wilson, CPA, leads the Firm’s Nonprofit Practice and has 25 years of public accounting experience providing audit, accounting and special project services and works exclusively in the nonprofit sector. She is also President and Chief Philanthropy Officer for GHJ Foundation, the Firm’s…Learn More

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Mark Kawauchi

Mark Kawauchi, CPA, is a Managing Director within the Firm’s Nonprofit Audit Practice. Mark has more than 30 years of public accounting experience and is dedicated to the Firm’s nonprofit clients with a specialty in healthcare. In addition to performing audits and reviews, Mark enjoys being a…Learn More