So, you have gotten your PPP funding approved and received your loan proceeds. You also receive funding through state and federal contracts or other restricted funds. How do you track your costs and avoid “double dipping”?

PPP funds and use of restricted funds has been an area of confusion for nonprofits, government contractors and funding sources. How can you ensure that you utilize your PPP loan and forgiveness opportunities and restricted funding awards without inadvertently double dipping?

What should you do?

• Read your grant agreements – the federal government explicitly prohibits being reimbursed twice for the same expense. Other governmental and private funding sources likely restrict double dipping as well
• Talk to your funding sources -Reach out to your funding sources and see if they will allow you to extend your grant periods or re-allocate some of your funding to items other than payroll. The PPP funds could then be used to supplement the grants and the Organization as originally intended.
• Track your costs - For cost reimbursement grants track costs to be utilized for PPP forgiveness similar to a separate grant in order to ensure that the same costs are not applied both to a grant and utilized to create forgiveness of the PPP loan. Identify any potential overlapping expenses.
• Determine how to use the loan proceeds – Now that you have identified the overlapping expenses, you need to determine if you are going to request reimbursement for them or forgiveness on your loan application.
• Think about how this could affect overhead rate calculations - According to Federal Acquisition Regulation (FAR) 31.201-5, the applicable portion of any income, rebate, allowance, or other credit relating to any allowable cost and received by a contractor shall be credited to the government. If any forgiveness is obtained, unless the FAR is amended, it is very possible that the portion of payroll, rent, and utilities normally included in your overhead rate as allowable costs would need to be reduced any amount forgiven. This could significantly impact future overhead rates.

Tips for your PPP loan forgiveness application:

• All eligible payroll costs must be reported - the PPP forgiveness application requires that all eligible payroll costs be reported. Their definition of eligible payroll costs does not contemplate federal contract money. So it basically makes it an all or nothing proposition right now. An organization can’t pick and choose which payroll costs it submits for forgiveness.
• All eligible other costs do not need to be reported – the application will allow you to exclude non-payroll costs at your discretion, including business mortgage interest payments, rent and utility payments.

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