Finding Text
Criteria: White House OMB Memo M20-26 which states, "payroll costs paid with the Paycheck Protection Program (PPP) loans or any other Federal CARES Act programs must not be also charged to current Federal awards as it would result in the Federal government paying for the same expenditures twice." 2 CFR 200.403 states that "except where otherwise authorized by statute, costs must meet the following general criterai in order to allowable under Federal awards...(f) not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period.
Condition: Management used payroll from a federal grant (Head Start) to apply for PPP loan forgiveness. This same payroll was requested for reimbursement. Such payroll amounts cannot be reimbursed by both the PPP program and other federal funding.
Effect: Previous reporting for Headstart grant expenditures was not accurate due to subsequent receipt of PPP funds forgiveness. The Agency is out of compliance with the PPP requirements, standards of White House OMB Memo M20-26 and 2 CFR 200.403.
Cause: Management applied for the PPP loan not knowing if their grant funds were going to continue during the Covid-19 pandemic. The PPP loan was applied for 6 weeks prior to the White House OMB Memo M20-26 being issued, therefore Management's interpretation of the rules at that time did not contemplate the disallowance for costs also covered by a separate federal grant program.
Recommendation: The Agency should seek grantor guidance regarding deferred grant funds. Management's Response: See the Management's Response to Findings section for management's detailed response to item 2022-001.