Federal stimulus money can be indispensable for nonprofit organizations (NPOs) at any point in time. The COVID-19 pandemic made government assistance even more critical for individuals and organizations of all kinds.
Many NPOs saw contributions plummet due to the economic downturn caused by the pandemic. NPOs involved in healthcare saw demands and expenses skyrocket.
Congress established multiple stimulus programs to assist NPOs and others through laws like the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020. Federal money often brings compliance and reporting obligations. NPOs must account for how they spent the federal money they received.
Reporting deadlines for several programs are fast approaching, with some deadlines as soon as March 31, 2023.
New Requirements for Schedule of Expenditures of Federal Awards
NPOs that have spent at least $750,000 in federal stimulus money during their fiscal year may be subject to an audit of those funds, known as a Single Audit.
Funding recipients must prepare a Schedule of Expenditures of Federal Awards (SEFA), which is a supplemental financial statement that accounts for how the organization spent federal funds during the fiscal year.
According to federal regulations, a SEFA must include the following information:
- For grants in which the NPO was the primary recipient, a list of all federal programs or clusters, organized by federal agency, along with the grant numbers and total amount of each grant
- For grants in which the NPO was a subrecipient, the name and tax ID number of the pass-through entity that received the grant
- The total amount expended for each listed program, including amounts that the NPO received as a subrecipient
- The total amount disbursed by the NPO to subrecipients
- Outstanding balances of loans or loan guarantees as of the end of the audit period
- A description of the accounting methods used in preparing the schedule
- A statement as to whether the organization is using the 10% de minimis cost rate
NPOs must ensure that SEFAs are complete and accurate. The Health Resources and Services Administration (HRSA), which is part of the U.S. Department of Health and Human Services (HHS), is likely to be quite strict in its auditing standards.
Filing Deadlines for Nonprofits
Several stimulus funding programs have reporting deadlines in the near future.
Provider Relief Fund Recipients
The CARES Act established the Provider Relief Fund (PRF) to support healthcare providers that were involved in diagnosing and caring for individuals who had, or suspected they had, COVID-19. The purpose of the fund was to supplement lowered revenues and increased expenses caused by the pandemic’s economic impact.
The Provider Relief Bureau (PRB), which is part of the HRSA, administers the PRF program. Distribution of funds occurred during several designated reporting periods. The reporting deadlines for Periods 1 through 3 have already passed.
The reporting deadline for Period 4 (which covers July 1 to December 31, 2021) was March 31, 2023. NPOs that received PRF funds totaling more than $10,000 during Period 4 are required to file a report with HHS on their use of those funds.
Subsequent reporting periods will begin on the following dates:
- Reporting Period 5: July 1, 2023
- Reporting Period 6: January 1, 2024
- Reporting Period 7: July 1, 2024
Shuttered Venue Operator Grant Recipients
Congress created the Shuttered Venue Operator Grant (SVOG) program in the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act of 2020. The program provided grants to support live venues, movie theaters, and other businesses or organizations that promote the arts. Eligible entities could receive up to $10 million.
The amount for each entity was based on two amounts:
- Gross earned revenue in 2019
- Amounts received through the Paycheck Protection Program (PPP) program, if any
The Small Business Administration (SBA) oversees this program and receives reports from grant recipients. Last year, it issued guidelines for for-profit entities that received SVOG grants. NPOs are subject to the general auditing and reporting requirements for federal grant programs.
An NPO that received a grant or grants through the SVOG program and expended more than $750,000 of that money during its fiscal year must file a report with the SBA by the earlier of:
- Thirty days after receipt of the auditor's report
- Nine months after the end of the NPO's fiscal year
For NPOs with fiscal years that end on June 30th, the filing deadline for fiscal year 2022 is March 31, 2023.
Due to severe weather events, NPOs in Alaska, Florida, North Carolina, Puerto Rico, or South Carolina are eligible for a six-month extension if the deadline for their single audits was between September 18 and December 31, 2022.
If you have any questions or would like additional information, contact one of our accounting professionals.
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