SBA Issues Guidance for For-Profit Shuttered Venue Operators Grant Recipients
On July 14, 2022, the U.S. Small Business Administration (SBA) conducted a webinar titled Audit Requirements for For-Profit Entities, which provided guidance to for-profit entities that received funding under the Shuttered Venue Operators Grant (SVOG) program. Given the lack of detail surrounding the audit requirements for for-profit entities, the SBA announced a nine-month audit submission extension. The extension specifically states that for-profit recipients will be allowed to submit their audit at the later of either of the following:
- Nine months from the date the SBA’s for-profit SVOG guidance is released
- Nine months after the end of the for-profit’s fiscal year
The extension is only applicable to for-profit entities; thus, nonfederal entities are excluded. Not-for-profit entities that received SVOG funding still have the normal reporting requirements under Uniform Guidance.
The SBA also provided insight as to what the upcoming audit requirement will include, calling out the thresholds for audit requirements to be triggered, along with options for for-profit entities to meet the SVOG audit requirements. Traditionally, a threshold of $750,000 of federal expenditures is used to determine the need for all for-profit audit options. However, given that the SVOG allows pre-award costs to be charged to the program, the SBA modified the threshold, now requiring an audit when $750,000 or more of SVOG revenue is recognized during the entity’s fiscal year.
For-profit entities that meet the requirements for an audit based on the above information can choose from the following four options:
- A single audit conducted in accordance with Uniform Guidance requirements
- A program-specific audit conducted in accordance with Uniform Guidance requirements
- An audit of the entity’s financial statements
- A compliance examination attestation engagement
If an entity has already had an audit of its financial statements performed during the fiscal year in which it received over $750,000 of SVOG revenue, the entity will submit those audited financial statements to the SBA. For those entities that did not already have a financial statement audit conducted, the fourth option above will be the most cost-effective and efficient option for compliance with the SBA requirements.
Final guidance is pending and is expected to be released by the SBA in the near future. If you have questions about how this impacts your situation, please contact your KSM advisor or complete this form.
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