DCAA Misapplication of Credits Related to PPP Loans in Rate Development

Recently, our office has become aware of a few instances of auditors misunderstanding the DCAA Headquarters’ guidance pertaining to the treatment of credits associated with PPP Loan Forgiveness.

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Topics: Paycheck Protection Program (PPP) Loans

New DCAA Low for Taking Advantage of Small Businesses

In our last newsletter, we focused on some of the unnecessary obstacles small businesses face in the regulatory environment and areas where, in our opinion, Government auditors, particularly DCAA, misinterpret regulatory guidance in their efforts to question costs.

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Topics: Paycheck Protection Program (PPP) Loans

DOJ is Diving Deeper into the Paycheck Protection Program (PPP) Pool

The focus of fraud used to be primarily on defense contractors, health care providers and health care suppliers. However, other companies are now being exposed to the Federal Claims Act (FCA) including software companies, private equity financiers, insurance companies, and educational institutions. Additionally, fraud is not just related to companies receiving the funds.

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Topics: Incurred Cost Submission, Defense Contractors, DOD IG, Government Compliance Training, Incurred Cost Proposals, Cost-Type Contracts, Accounting & Billing System, DOD Contractors, Paycheck Protection Program (PPP) Loans

PPP Loan Forgiveness – Impacted by Related Party Lease Cost

Apportioning the Costs of Buildings

The SBA and Treasury have made it clear that if you own or lease a building that you sublet to another company, the portion of the lease or mortgage expense that can be used as nonpayroll costs for PPP loan forgiveness is limited to the share of the expense applied to the business who’s PPP loan is being forgiven. The simple example is, you lease an office building for $10,000 per month and sublease part of the space to another company for $2,500 per month. Only $7,500 would be used toward your nonpayroll cost for loan forgiveness. This proration applies to utility and other shared costs of the tenants.

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Topics: Defense Contractors, Defense Procurement and Acquisition Policy (DPAP), Accounting & Billing System, Government Regulations, DOD Contractors, COVID-19, Paycheck Protection Program (PPP) Loans

UPDATE: New SBA FAQs on PPP Loans – Repay Date Extended to May 18

SBA Extends the Repayment Date Again – May 18, 2020

On May 13th the Small Business Administration (SBA) updated its Frequently Asked Questioned (FAQs) – adding Questions 46 and 47.  Question 47 extends the safe harbor (repayment) date to May 18th.  Question 46 is very interesting; it lays out the SBA and Department of Treasury plan to review certifications of the necessity of the loans. 

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Topics: DCAA Audit Support, COVID-19, Paycheck Protection Program (PPP) Loans