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Planning for a PPP Audit

1 Jun 2020 7:01 AM | Anonymous

Nonprofit organizations that received more than $2 million in funding from the U.S. Paycheck Protection Program (PPP) should expect an audit if they apply for loan forgiveness. These organizations should begin preparing for this audit now.  

Make sure the organization has thoroughly documented the rationale for obtaining the loan as this will be needed to satisfy the loan certification. Due this by putting together an economic uncertainty statement listing all of the reasons why the organization needed the loan -- from concerns over COVID's impact on the nonprofit industry to cash flow concerns. Consider creating detailed forecasts that showcase the financial position of the organization without receipt of the loan.  

In addition, make sure the organization has appropriately tracked all expenses incurred using the PPP funds. Keep all support documentation filed separately and have this ready for review during the audit.  

Having these items prepared now will help expedite the audit process, make it less burdensome, and signals the organization's compliance with the PPP's requirements.

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