January 7, 2021

On December 22, 2020 the Management and Budget Office issued an addendum to the 2020 Compliance supplement that includes new guidance and additional relief for certain auditees with Uniform Guidance requirements. This addendum is to be used in conjunction with the 2020 Compliance Supplement by auditors. This supplement, which originally was anticipated to be issued in mid-September, is long-awaited guidance by both auditors and auditees alike.

Due to the late issuance of this addendum, those auditees with a Uniform Guidance audit requirement that has a year-end through September 30, 2020 and also received COVID-19 funding is granted a three-month extension for submission of the Data Collection Form and corresponding Uniform Guidance audit report. As an example, an auditee with a June 30, 2020 year-end that received COVID-19 funding is now due June 30, 2021, instead of March 31, 2021. There is no requirement for auditees with direct awards of pass-through funding to seek approval for the extension, but as expected the addendum advises that auditees maintain documentation of the reason for delay filing, should they file during the three-month extension relief period.

In a previous industry alert, we noted extensions previously granted by OMB for 2019 fiscal year-end auditees with Uniform Guidance audit requirements affected by the COIVD-19 pandemic. These have since expired.

Of important items to note within the addendum, as outlined by an alert from the Government Audit Quality Center of the AICPA:

  • Nonfederal entities that received donated personal protective equipment (PPE) should include the fair market value of the PPE at the time of receipt in a stand-alone footnote to the SEFA that can be marked “unaudited.” There is not a requirement for the auditor to count the donated PPE for purposes of determining the threshold for a single audit or determining the Type A/B program threshold for major programs. Donated PPE is not required to be audited as a major program.


  • Requirement for auditors to test Federal Funding Accountability and Transparency Act (FFATA) for all COVID-19 programs included in the addendum where the reporting type of compliance requirement is marked as “Y” in the Part 2 Matrix and it is determined to be direct and material, and if the recipient makes first-tier subawards of $25,000 or more to report subaward data through the FFATA Subaward Reporting System.


  • Additionally, for all major programs selected for testing for audits of fiscal years after September 30, 2020, audits are required to address the FFATA reporting requirement regardless of whether COVID-19 funding is involved. Noncompliance must be reported with FFATA reporting rules (e.g. FFATA report was not made, incorrect amounts reported, etc.).

Next Steps

Recipients should read the full addendum to understand the potential implications on their federal programs and any compliance requirements. The CPAs and advisors at GRF are available to assist clients and we will continue to provide updates on the firm’s COVID-19 Response page as they develop. For questions about the addendum and Federal awards, contact Tricia Katebini, CPA, MBA, Audit Senior Manager, at tkatebini@grfcpa.com or 301-951-9090.