COVID-19 Update: Payroll, Payroll Fraud, and the PPP Program

Author: Lynn Fountain

CPE Credit:  1 hour for CPAs

In March 2020, the government passed $2.2T in funding due to the COVID crisis. A portion of that funding was to establish the Payroll Protection Program (PPP). The intent of this program was to assist small businesses with less than 500 employees with sufficient funds to provide employees with paid leave. Personnel and payroll are critical to all businesses. The payroll process includes a multitude of factors including pay rates, employee classification, sick leave, paid time off, withholdings, taxing, benefit plans and other elements that impact workers. With the quick onset of the legislation, the potential for fraud within the application and loan repayment process is strong.

Within two weeks of the original bill, the $350B allocated funding for the PPP program had been claimed. In April 2020, Congress passed another bill which added funds to the program. The Small Business Administration was deemed responsible for oversight of the program and instructions and procedures were slow to roll out. In late May 2020, the SBA provided a template form to be used for loan forgiveness. However, many still believed the process had many unanswered questions.

The PPP program has been fraught with questions and unknowns from the beginning. As time has passed, congress has seen various loopholes in the program that allowed organizations who were not intended to be fund recipients, receive the funds. In addition, there have been issues with the process of loan application and funding. With the additional funds added in April, more companies have been added to the mix of questions regarding how the funding can be used and what the repayment terms are. Over the ensuring weeks, guidance was released by the Treasury and the Small Business Administration regarding fund application and loan repayment. However, concerns still existed on the part of small business owners.

From late March through late May, CCH CPELink executed weekly seminars which spoke to fraud potential in payroll as it related to the PPP program. We also discussed the relevant changes that had arisen. However, in June 2020 Congress provided some relief on repayment options for the PPP program. This relief provides an extension beyond the original eight week measurement period for repayment along with other changes. Join Lynn Fountain as she walks through the recent updates related to new legislation passed in June.

Publication Date: June 2020

Designed For
Tax practitioners, Payroll personnel, Small business owners, CFO’s and controllers.

Topics Covered

  • Update PPP and Impact on Payroll
  • Major Changes to PPP
  • Payroll Fraud
  • Other PPP Clarification

Learning Objectives

  • Describe the PPP and relevant updates regarding loan application and loan repayment
  • Recognize and examine frauds that have occurred and potential other areas for Fraud within the PPP process
  • Recognize and examine frauds that have occurred and potential other areas for Fraud within the PPP process
  • Identify payroll process areas to closely manage
  • Describe Internal Controls that are relevant to the Payroll process and specifically the PPP program

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Accounting (1 hour)

Program Prerequisites
None

Advance Preparation
None

Registration Options
Quantity
Fees
Regular Fee $49.00

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