All posts by Rachel Owens

Provider Relief Funds – Update

HHS issued revised (again) reporting procedures for Provider Relief Fund (PRF) recipients that received more than $10,000.  The revision:

  • Delayed the deadline for the initial report, originally February 15, 2021 for use of funds through December 31, 2020, however a new due date was NOT announced. The final report for use of funds through June 30, 2021 as of now is unchanged at July 31, 2021.
  • Changed the “lost revenue” calculation to allow more flexibility. Methods now allowable include:
    • Difference between 2019 and 2020 actual patient care revenue
    • Difference between 2020 BUDGETED and 2020 actual patient care revenue (extra reporting required to attest to budget that was approved prior to March 27, 2020)
    • Other reasonable method, which will lead to a higher likelihood of government audit
  • Added flexibility of allocation of funds from Targeted Distributions to subsidiaries

The reporting portal was supposed to open on January 15, however it is now open for registration only.  Here is a link to HHS’ notice.  We are confident additional guidance will be forthcoming.  Stay tuned!

NC Medicaid Transformation – January 2021 Update

Medicaid Transformation is a behemoth of a project that has been in the works long before we were hit with a public emergency in the form of a pandemic.  Both the Standard Plan and the Tailored Plan are on track to go live on time.  The Standard Plan has a implementation date of July 1, 2021 and the Tailored plans will follow one year later.

This is a good reference to keep updated with the latest from the NC Division of Health Benefits.

Guidance for Second-Round of PPP is here!

Small businesses need all the help they can get.  Especially during a public health emergency.  The PPP loans were designed to provide swift relief to these small businesses.  The latest in PPP news is that the latest round still follow the same conditions, processes and terms as the first draw.  March 31, 2021 is the final day to apply for PPP assistance.  Here are some additional resources:

New Federal Tax Relief related to COVID

The latest information related to COVID relief is in the form of two new Federal bills that provide extended financial relief.

The Bipartisan COVID-19 Emergency Relief Act of 2020:

This bill has several payroll provisions that include a second PPP loan through the SBA (Small Business Administration) based on limited eligibility.  The qualifications of this loan are small businesses with less than 301 employees and with lost revenue of 30% or more during any 3-month period of 2020.  The expenses covered in this bill extend safety operations and cover supplier costs, facility “modifications.”  PPP loans of $150,000 or less are eligible for a much more streamlined forgiveness process.

Unemployment is included in this Act as well.  It extends all unemployment insurance programs by 16 weeks, beginning January 1, 2021.  Any Federal supplement to unemployment received is also extended expanded for the same period, by $300 per week.

The Bipartisan State and Local Support and Small Business Protection Act of 2020:

This bill provides $160 billion in governmental relief designated for State, municipal and tribes.  Additionally, it pushes back the deadline to spend the CARES Act Coronavirus Relief Funding to December 31, 2021.

There is guidance included in this bill to provide “liability protection” for businesses.  Those businesses trying to follow current health standards, would not be responsible under federal unemployment law due to COVID-19 exposure and working environment changes.

IRS Backlog – UPDATE

Everyone knows COVID-19 pandemic has affected all of us.  The IRS is no exception.

There can be communication issues when dealing with mixed media: manual, paper letters along with electronic systems on a good day.  When you add the slowed USPS system to the mix, it is only making the IRS processing system more strained.  Currently, there are computer-generated notices going out from the IRS that do not properly reflect the taxpayers’ account status because of this delay.  The IRS is stating online that they are experiencing high call volumes and have issued an “E-News for Tax Professionals Issue 2020-33“.  There are many people who are simply calling to follow up on manual payments that were sent in weeks ago.

If you are frustrated with the IRS, know you are not alone.  The issue is acknowledged and they are trying to resolve the backlog by bringing in additional help. The Journal of Accountancy published an article on this same topic as well.

As of August 21, the IRS has temporarily suspended the mailing of all notices to taxpayers with balances due. The latest article shared by the IRS explains more about the steps the System is taking to eliminate confusion and keep the process moving as smoothly as possible.

Please contact our office if we can answer any of your questions.

Retroactive Rate Increase – NC Medicaid

NC Medicaid issued Special Bulletin COVID-19 #124 on Wednesday, August, 19, 2020.  This bulletin outlines the specifics regarding a retroactive rate increase for any fee-for-service codes that are billed through NCTracks.  The increase will retro to March 1 and will incorporate any service codes that have not already received a rate increase through a Managed Care Organization (MCO).

The service codes are defined in COVID-19 Special Bulletin #99.  If you have any questions, please contact our office for additional information.

The Government Audit Quality Center (GAQC) Updates

This is from the GAQC, Alert No. 404:

The purpose of this GAQC Alert is to provide you with important governmental auditing updates relating to the Novel Coronavirus (COVID-19) as follows:

·   A definitive answer has been provided by the Small Business Administration (SBA) regarding the applicability of single audit requirements to Payment Protection Program (PPP) loans and Economic Injury Disaster loans (EIDL) obtained by not-for-profit entities (NFPs);

·   Statement on Auditing Standard (SAS) 141, Amendment to the Effective Date of SAS Nos. 134 Through 140, has been issued by the Auditing Standards Board (ASB).

·   The U.S. Department of Housing and Urban Development (HUD) has further extended certain submission deadlines for multifamily housing entities and public housing agencies (PHAs), as well as updated other COVID-19 guidance.

·   The Department of Energy (DOE) has extended audit submission deadlines for certain for-profit entities;

·   There are several COVID-19-related developments at the Federal Audit Clearinghouse (FAC); and

·   Registration information for an upcoming AICPA Webcast that will cover general audit-related implications of the COVID-19 pandemic.

SBA Loan Programs

In response to the COVID-19 pandemic, SBA PPP loans, administered under the 7(a) guaranty loan program, are being provided through local financial institutions. While these loans have been made primarily to for-profit entities, some NFPs have also received PPP loans. One of the most common questions we have received is whether SBA PPP loans obtained by NFPs are subject to the Uniform Guidance single audit requirements. The good news is that we have recently received an answer to this question. Based on recent discussions with SBA staff, we have been informed that PPP loans made to NFPs will not be subject to single audit.

On the other hand, SBA informed us that loans made to NFPs under the EIDL program are considered a direct loan program disbursed from SBA to loan recipients. Therefore, these loans are considered federal financial assistance and are subject to the Uniform Guidance single audit requirements.

SAS 141 Delays Auditing Standards

SAS 141 was issued in May 2020 and provides a one year delay for implementing SAS Nos. 134-140 to provide relief to auditors amid the challenges created by the COVID-19 pandemic. This suite of standards will, among other things, result in significant changes to the auditor’s reporting. The standards will now be effective for audits of financial statements for periods ending on or after December 15, 2021 (previously they would have been effective for periods ending on or after December 15, 2020). While early implementation was not permitted for these standards as originally issued, SAS 141 does permit early implementation. Additionally, because they are so interrelated, the ASB recommends that the suite of SASs be implemented concurrently.

HUD COVID-19 Extensions

Multifamily Housing Entities. As reported in GAQC Alert #399, HUD’s Real Estate Assessment Center (REAC) had previously provided a 30-day extension for multifamily audit submissions having due dates of 3/31/20 and 4/30/20 (requiring them to be submitted by April 30th and May 31st respectively). We have just heard from HUD staff that they have further extended these submission deadlines to June 30, 2020. A new user alert has been posted for those logging into the Financial Assessment Subsystem – Multifamily Housing site as follows:

“Global Extension Till June 30th REAC is extending due dates on all submissions that are due April 30th and May 31st. The new due dates for these submissions will be June 30th. This applies to all submissions due within this time frame.”

Further, as noted in GAQC Alert #399, HUD issued a question and answer (Q&A) document, Questions and Answers for Office of Multifamily Housing Stakeholders, which has now been updated through May, 1, 2020, Some of the more recent questions added to the document address forbearance provisions described in Mortgagee Letter 2020-09, Implementation of the Coronavirus Aid, Relief, and Economic Security (CARES) Act Forbearance, which are relevant to multifamily borrowers, servicers, and lenders. Note that Q7 in this Q&A document addresses the audit extension but has not yet been updated to reflect the latest June 30th extension provided by REAC. We assume the next version of the Q&A will reflect this latest change.

PHA Unaudited Submissions. On April 22, 2020, HUD issued an updated version of COVID-19 FAQs for Public Housing Agencies. QC14 of the FAQs extends the submission deadline for unaudited submissions required to be made by PHAs with 12/31/19 and 3/31/20 year-ends to 8/31/20 and 11/30/20 respectively. PHAs are not required to seek HUD approval for these extensions.

FAC Update

Although the FAC is accepting single audit submissions, FAC staff has informed us that the COVID-19 pandemic has impacted normal processing times and that telephone support is limited. It is currently not unusual for a month to pass between the receipt of a submission and for the submission to be processed by the FAC. However, this delay will not impact the recorded acceptance date which will still be based on the actual date of submission.

On another note, the FAC posted information about the 6-month single audit submission extension on the FAC home page under the heading “Important Announcements.” See GAQC Alert #401 for more information on this extension that was established by OMB Memorandum M-20-17, Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by the Novel Coronavirus (COVID-19) due to Loss of Operations (OMB Memo M-20-17). In its announcement, the FAC added the following language that does not appear in the OMB memo: “Individual recipients and subrecipients…are requested to include a reference to the [OMB] memorandum in their audit reporting packages so that Federal agencies and pass-through entities are informed.” We understand this addition was made based on a request from OMB and believe the intent is for the auditee to add a statement in the reporting package when it has taken advantage of the 6-month extension due to the COVID-19 pandemic. We have an inquiry into OMB for confirmation on this, as well as a question about where in the reporting package this notification should be placed. We will follow-up in a future GAQC Alert once we get a response.

DOE For-Profit Audit Extension

In the DOE National Nuclear Security Administration’s implementation of OMB Memo M-20-17, DOE extended the audit submission deadline for for-profit entities subject to a compliance audit under DOE rules. The extension is consistent with the extension language provided by OMB for single audits (i.e., a 6-month extension). See the DOE announcement, section 13, titled “Extension of Single Audit Submission,” for more information.


If you have additional questions, please feel free to contact our office.


U.S. Department of Treasury Expands Income Tax Filing and Payment Relief

In an official pronouncement released Thursday, April 9, the U.S. Department of Treasury expanded on the income tax filing extension and payment relief efforts in response to the current COVID-19 situation.  Effectively, any “income” tax filing or payment that would normally be due during the months of April through June of 2020 has now been automatically extended until July 15, 2020.  As a supplement to the prior income tax filing and payment extensions granted, this new announcement delays the need to remit any quarterly estimated tax payments until July 15th without incurring any penalty or interest charges.  As a result, any business or individual with 2020 quarterly estimated tax payments needs is able to delay both the Quarter 1 and Quarter 2 payments (normally due April 15th and June 15th, respectively) until July 15, 2020.  Also extended are any fiscal year-end income tax return filings (and corresponding tax payments) for businesses (corporate, LLC, partnerships or trusts), gift and estate tax filings, nonprofit organization income tax filings that would have been due in April, May, or June of 2020.  Note that these enhanced extension relief rules do not pertain to Employment Tax Reporting and Payments (including all payroll-related tax returns and deposit requirements).  Finally, as reaffirmation of the recommendations we have previously provided for any business, organization or individual taxpayers that will require additional time to file their respective 2020 income tax returns, the standard extended due dates of September 15 and October 15 may still be requested via filing of the applicable extension form prior to July 15, 2020.

We trust you will find the highlights we have provided on this new pronouncement helpful, but should you have further questions please contact us.

Key Highlights of the CARES Act and the FFCRA Relief Provisions

We have compiled the following useful and concise information for your reference as you consider the various planning opportunities available to address the impact of the COVID-19 situation on nonprofit organizations.  After studying the recently enacted law and interacting with other professionals, by parsing through the voluminous CARES Act, Families First Coronavirus Response Act (“FFCRA”) and relevant peripheral materials, the following includes the highlights of the relevant relief available to you via the government stimulus packages:


  • Loans available under the CARES Act provide the largest measure of assistance available via what is termed the “PPP”.  The borrowing amount is capped at a formula calculating the average monthly “Total payroll” incurred in a trailing 12-month period.  “Total payroll” includes employee compensation (not to exceed $100,000 annually per capita) + health insurance (employer share only) + PTO.  PPP loans will be obtained through traditional lending relationships (local / national banks) and NOT the SBA; best bet is to work with lenders with whom a borrowing relationship already exists as it may help expedite the process.   Our understanding is that local lenders will have finalized the application process and be in a position to initiate the approval process beginning April 3.  We recommend contacting lenders with whom the organization already enjoys a relationship as many banks are refusing to process the PPP applications for new customers without any other current bank connections.
  • Forgiveness of any “PPP” loans received under the CARES Act will be available if proceeds are used for payroll, rent, utilities AND employee labor force or employee compensation after April 1 remains consistent with a pre-April 1 “measurement period”.
  • An alternative loan program will be created in the future [“Midsize Business Loan Program”] will be established for organizations with > 500 employees whom plan to retain workforce.  No details have yet been released on this program.
  • Independently, “Disaster Relief Loans” (referred to as “EIDL”) are available under the more traditional borrowing program offered by the SBA.  The on-line loan application is available at
  • What is interesting and somewhat confusing, the EIDL program administered by the SBA also includes a grant opportunity for up to $10,000 for businesses that have been severely effected by COVID-19.  The grant does not require repayment, nor does it obligate the recipient to execute an EIDL loan; furthermore, it does not preclude the business from also applying for the PPP.  Most prospective borrowers will apply for the grant through the SBA (which should be received on an expedited basis according to the Federal government’s stimulus objectives) while simultaneously applying for the PPP through their local lender.
  • NC-based businesses may also apply for loans of < $50,000 under the “NC COVID-19 Rapid Recovery Loan” program administered by a consortium of local lenders and stakeholders, and funded by the “Golden Leaf Foundation”.  The loans will have favorable repayment terms and the application process is available on-line.



  • Payroll tax deferment is available for employer FICA and Medicare due 4/1/20 – 12/31/20.  Any tax amounts deferred must be repaid in no less than 50% < 12/31/21 and the remaining 50% < 12/31/22.
  • Payroll tax credit is available on up 50% of up to $10,000 of wages per employee (or $5,000 of credit per quarter) by meeting certain workforce retention criteria [50% of wages paid to retained labor force during period when business gross revenues decline > 50% or experienced at least a partial shutdown].  Any employer whom receive a PPP loan and loan forgiveness will be precluded from qualifying for an equivalent amount of payroll tax credit.
  • EFMLA [“Family leave”] and EPSL [“Sick leave”] benefits paid out to qualifying employees will generate a payroll tax credit (rather than the normal deduction).  These “leave” and “sick pay” provisions provide a benefit to employees who file claims with compensation (at least in part) for up to 12 weeks in aggregate.  The mandatory leave provisions may not be applicable to anyone in the healthcare industry, however if a business already has family leave policies in place as part of their employee benefits, the policies should be be adhered to with regard to relevant claims made by employees whom are incapable of working due to COVID-19 issues.
  • Employees whom are separated from service via layoff can qualify for Unemployment Insurance.  Filings are now made via on-line platform by the terminated employee directly.  Under NC Law, even employees whom were not fully terminated but experienced severe decrease in work hours may qualify to receive partial benefits.  Anyone properly terminated would be ineligible for EFMLA or EPSL; in addition, employees severed from service whom were participants in the group health plan will need to offered COBRA coverage.  [Note for exit- counseling purposes and temporary layoff planning, a terminated employee is typically not required to self-pay the monthly premium amount until after a 59-day grace period; therefore, if a business anticipates rehiring the terminated employee < 59 days following the expectation of a return to business activity suspended due to COVID-19, there may not be any additional premium cost to the employee nor significant interruption in health care coverage.  [However, each business should consult with its health plan advisor or representative to verify no other “breaks in service” nor “on-board delays” in coverage would apply under the terms of the group plan in place.]



  • Individual taxpayers beginning in 2020 tax year may make a $300 tax-deductible contribution to public charities, and without any of the standard itemized deduction limitations.
  • Normal Itemized Deduction AGI limitations [60% for 2019] are lifted in 2020
  • Corporate Contribution Limitation [10% of net income for 2019] is increased to 25% for cash and food donations


CARES Act Relief Pertaining to Retirement Accounts

  • The Act allows for “coronavirus-related” distributions from defined contribution retirement plans, such as 401(k), IRAs, and 403(b) plans, of up to $100,000, with the early 10% withdrawal penalty suspended. Income associated with these distributions would be subject to tax over a three-year period rather than in the current year. Taxpayers would be able to choose to repay their retirement plans after receiving these distributions if they wish.
  • Coronavirus-related distributions include those made to individuals who have been diagnosed with COVID-19, a spouse or dependent of such individual, or those who experience adverse financial consequences as a result of the pandemic.
  • The amount that an individual may borrow from a qualified plan is temporarily increased from $50,000 to $100,000.
  • The Act suspends required minimum distributions (RMDs) in the year 2020 for various retirement plans, including IRAs, 403(a) and 403(b) plans, and 457(b) plans. Therefore, the 50% penalty associated with not taking an RMD is suspended in 2020.
  • The RMD suspension covers first RMDs from 2019, which individuals may have deferred until April 1 of this year. Similarly, RMDs are waived for plan participants who turned 70 ½ in 2019 (prior to the enactment of the SECURE Act) and are required to take an RMD prior to April 1 of this year. Though we are waiting on official guidance from the IRS, we expect that if an RMD has already been taken in 2020, the plan participant has up to 60 days to deposit it back into a qualified retirement account. We expect further guidance on a number of questions raised by the Act, including the treatment of 2019 RMDs taken in 2020.


Details continue to be released and we will keep you posted as to any new developments, and of course feel free to contact us should you need further information.



SBA loans may be more difficult than we thought

Small businesses looking to get some relief from the Payroll Protection Program may run into a snag or two.  Because this stimulus package was passed so quickly, the banks are not necessarily prepared to handle the loans like the media initially described.  This article from Fortune provides some additional insight.

If you are a small business looking to apply for one of these loans, here is a link to help you find a lender along with a sample application.

We understand how difficult this time is for you.  If we can be of any assistance, we will be happy to help!  Please contact our office if you have questions or would like to know more about other COVID-19 relief options.