On June 14, 2022, the Shuttered Venue Operators Grant (SVOG) team at the Small Business Administration (SBA) launched its third and last webinar in a three-part webinar series dedicated to the audit requirements of the SVOG Program entitled “Audit Requirements for For-Profit Entities.”
The topics covered included:
- Overview of the For-Profit Guidance
- Financial Statement Audit
- Compliance Examination and Compliance Requirements
- Which Option Should I Select?
- Webinar Recap
- Guest Speaker Discussion – Kim McCormick, Chair of AICPA Governmental Audit Quality Center Executive Committee
- Information and Support
The primary audience of this webinar is specifically designed for for-profit entities that received SVOG awards only.
SVOG For-profit webinar key takeaways
- The SBA is currently working on issuing an audit and compliance guidance document, SVOG For-Profit Examination Guidance Document, specific to for-profit entities that receive funds from the SVOG program.
- Up to this point, there have been three ‘audit’ options:
1. Single audit
2. Program-specific audit
3. Compliance Examination
- SBA has added a fourth option – a standard GAAS audit of the company’s financial statements. So, suppose it is common practice for a for-profit entity that received and recognized revenue in excess of $750,000 (compliance audit threshold) to obtain an annual financial statement audit. In that case, the company can submit that to the SBA and comply with the submission requirements. If this option is chosen, the company does not need additional compliance engagement.
- The compliance audit threshold has been redefined for for-profit entities only. Rather than federal awards expenditure based (as it is for the non-federal entities), it is revenue based. “Revenue” equals SVOG award (initial and/or supplemental) revenue recognized in each period. Accrual and cash basis accounting methods are both acceptable. However, they must align with the standard business practices of the company.
- The deadline for completion of the required audit has changed. The updated deadline for for-profit entities is only nine months after the release of the SVOG For-Profit Examination Guidance Document (noted above) or nine months after the entity’s fiscal year-end.
- The AICPA is planning an auditor/practitioner webinar on the compliance examination performed under AT-C 315, Compliance Attestation and GAGAS for SVOG awards. The AICPA plans on putting on the webinar later this summer. You can visit the AICPA Governmental Audit Quality Center (GAQC) for more information.
Our team of experienced professionals can help you understand the compliance requirements and assist you with auditing your SVOG Program funds and any other COVID-related Federal program grant awards your company has received.