PPP Loans to Non-Profits are NOT Subject to Single Audit Requirements

Great news for non-profit organizations regarding PPP loans received!  When the PPP loans were introduced, many questions arose about the treatment of these funds for non-profit organizations. Fortunately, the SBA has recently communicated to the AICPA’s Governmental Audit Quality Center (GAQC) that the PPP loans issued to non-profit organizations are not considered federal funds.  Therefore, the loan amount does not count toward the $750,000 in federal expenditures threshold that would trigger a Single Audit. 

However, if a non-profit organization received an Economic Injury Disaster Loan (EIDL), those loan proceeds are considered federal funds and would be considered in the determinization of the need for a Single Audit.

This clarification was a result of the GAQC’s letter to the Office of Management and Budget (OMB) regarding questions on the CARES Act funding and impact on Single Audits.