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July 1, 2020 Article 2 min read
The Office of Management and Budget (OMB) has issued memorandum M-20-26 revising single audit extensions, clarifying allowable costs paid with PPP funds, prioritization of funding sources, and proper identification of COVID funding. Here are the key takeaways.
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On June 18, 2020 the OMB issued memorandum M-20-26 which rescinded memorandum M-20-17. The memorandum provides an extension of item 1, Allowability of salaries and other projects activities (item 6 in M-20-17) and revises the extension of single audit submissions.

While you should read memorandum, M-20-26 in its entirety to gain a thorough understanding, the following is a summary of the key takeaways.

1. Single audit extensions were revised: M-20-26 reversed several extensions that were granted under the previous memo. A careful review of the table below reveals that the additional six-month extension was removed for March 31 and June 30, 2020 year ends. These single audits are now required to be submitted within the normal due date provisions under Uniform Guidance. In addition, Dec. 31, 2019 year ends now have a three-month additional extension rather than a six-month extension.

 Nonfederal Entity Fiscal Year-End Normal Due Date Revised Extended Due Date (M-20-26) 
 June 30, 2019  March 31, 2020  Sept. 30, 2020*
 Sept. 30, 2019  June 30, 2020  Dec. 31, 2020*
 Dec. 31, 2019  Sept. 30, 2020  Dec. 31, 2020
 March 31, 2020  Dec. 31, 2020  Dec. 31, 2020 - Extension removed
 June 30, 2020  March 31, 2021  March 31, 2021 - Extension removed

* No change 

We continue to encourage entities to use the above delays as a last resort. If a delay is necessary, you must maintain documentation that includes the reasons for delayed filing.

2. “Double-dipping” is not allowable: M-20-26 clarifies that payroll costs paid with a Payroll Protection Program (PPP) loan or any other federal CARES Act programs shouldn’t be charged to current federal awards as it would result in the federal government paying for the same expenditures twice.

3. Exhaust other funding sources: M-20-26 states that awarding agencies must inform recipients to exhaust other available funding sources to sustain its workforce and implement necessary steps to save overall operational costs during the pandemic period to preserve federal funds for the ramp-up efforts. While OMB’s intent with this statement is not yet clear, we encourage you to continue to read all documents that accompany funding received, to be cognizant of all terms and conditions, to document decisions (including the guidance used), and to carefully track spending.

4. Separately identify COVID Funding on the SEFA: The memo states that the SEFA must separately identify “COVID-19 Emergency Acts expenditures” on the SEFA and in any report findings. The memo doesn’t define “COVID-19 Emergency Acts expenditures.” However, it’s essential that all COVID-related funding be tracked closely and separately to meet funding requirements, including reporting requirements.

If you have any questions about the administrative relief, please reach out to us.

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