Local Government Relief Funds and the American Rescue Plan Act – Elizabeth Thyer, CPA, Partner
It is likely that many of our governmental clients will be required to prepare a Schedule of Expenditures of Federal Awards and will have a Single Audit as required by Title 2, U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) after the expenditure of Local Government Relief and American Rescue Plan Act Funding in the coming year.
Local Government Relief funds were allocated during FY2021 through the CARES Act. Eligible expenditures must be incurred from March 1, 2020, to December 31, 2021.
American Rescue Plan Act Funds were partially allocated (50%) in May 2021 with the remaining 50% to be allocated a year from now. Eligible expenditures must be incurred from March 3, 2021, to December 31, 2024.
What does this mean for our clients? A Single Audit is required when an entity spends more than $750,000 of federal funding during a fiscal year. Many governmental entities that aren’t normally required to have a Single Audit as required by the Uniform Guidance may find themselves requiring a Single Audit in the next couple of years with the expenditure of this funding. For entities requiring a Single Audit, a Schedule of Expenditures of Federal Awards (SEFA) will need to be prepared. It is management’s responsibility to compile this schedule that includes all federal funding expended during the fiscal year. It is crucial to gather all the federal grant information entity-wide to ensure all federal grants are properly reported on the SEFA.
The entity requiring a Single Audit will also be required to submit a reporting package and Data Collection Form to the Federal Clearinghouse that includes the SEFA, the audit report, a corrective action plan, and a summary of prior year audit findings.
As always, feel free to reach out if you have any questions regarding Local Government Relief or American Rescue Plan Act Funding.