The 501 S(c)ene

The latest view on not-for-profit accounting issues

Does a Shuttered Venue Operators Grant = a Single Audit?

Many arts and cultural nonprofit organizations will be applying for the Shuttered Venue Operators Grant (SVOG) in early April. The SVOG was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. Organizations can apply to the SBA to receive a grant up to 45% of their gross earned revenue up to a maximum of $10M. For many organizations, this grant could be substantial and since this grant is subject to the Single Audit requirements, many organizations who have never had a Single Audit in the past, may need one for the first time.

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Here are some things you need to know:

• The threshold for federal awards requiring a Single Audit is $750,000. This is not based on each individual federal award, but instead on the total of all federal awards in your fiscal year.

• The threshold is not based on income received but is instead based on expenditures. So, if you receive a SVOG on May 31, 2021, but you only spend $600,000 of it prior to your fiscal year-end of June 30, 2021 (and you have no other federal awards to add to the total), you may not need a Single Audit for fiscal year 2021. Although, you may need one instead for fiscal year 2022.

• The CFDA (Catalog of Federal Domestic Assistance) number assigned to the SVOG’s is #59.075. You can expect your auditors to perform a detailed test of a selection of cash disbursements to ensure that internal controls were in place and to ensure that the expenses charged to the grant are eligible and allowable.

• In addition to the extra compliance and internal control testing required in a Single Audit, the auditors will also be looking for certain written policies you are required to have in place, including a procurement policy that has specific threshold requirements for purchases.

When you apply for the Shuttered Venue Operators Grant, the SBA system is expected to calculate an estimated grant amount that you are eligible for. Once you know that amount, we recommend you discuss with your auditors to determine if and when a Single Audit is needed.

Please contact your Henry + Horne tax professional with any questions. For more information and resources on COVID-19, see our coronavirus page.

Colette Kamps, CPA

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