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Document, Document, Document

By Joseph Weinberger, on May 19th, 2020

We are living in and working in what we hope are very unusual times. During these times documentation is more important than ever.

Many have applied for and received, the Payroll Protection Program (PPP) loans with the hopes of having at least part of these loans forgiven. Others have applied for the Economic Injury Disaster Loans (EIDL) from the Small Business Administration. These programs were emergency programs put in place to provide economic assistance for small businesses and preserve jobs. Because of the almost immediate impact on the economy from the pandemic, these programs were rushed through in order to provide help before it would be too late to have a meaningful impact. Like anything else that is rushed, there are details that are missed or left to be addressed in the future. Almost daily, there is new information being disseminated about these programs and the related regulations. It is important to document the decisions made when applying for the loans and through the various measurement, dates to ensure compliance and maximize the benefit from these programs. It may be a good time to connect with your accounting professionals to aid you in this documentation.

Items related to PPP/EIDL that must be documented would include but are not limited to the following:

  • Eligibility determinations for participation in the programs (initial and ongoing).
  • Expenditures funded by the loans (type and amount).
  • Periods that the expenditures covered.
  • Employee headcount and full-time equivalents.
  • Related corporate resolutions/board minutes.
  • Others to be determined.

Employers who have decided to defer paying the employer portion of payroll taxes should make sure that they have informed those charged with governance of the decision to defer those payments. Management must also follow adopted policies for incurring new debt. Documentation should be obtained for consideration and resolution of any existing covenants or other contractual restrictions.

Social distancing requirements and the health and safety of employees have resulted in many people working remotely. New policies needed to be developed, often on the fly. Documenting these policies is necessary. Even more important is continuing to capture what is effective and what needs to be improved upon. Reviewing lessons learned can lead to new efficiencies and new opportunities. Evaluating the effectiveness of working remotely, for certain positions, may lead employers to determine that certain job responsibilities can be effectively accomplished remotely. This can open up a larger pool of people to satisfy those positions and free up space at the same time.

An unfortunate reality of the economic turmoil and the suffering brought on by the pandemic will be lawsuits. People have lost jobs and maybe desperate. Others have lost loved ones or suffered and are looking for recompense. There unfortunately are also opportunists who see these tragedies as an opportunity to make money. The advice and regulations from government and health authorities were, and still are, changing rapidly, at times conflicting with earlier advice. Contemporaneous documentation of actions taken and the reason for those decisions with reference to information available at that point may very well be the strongest defense available. A lack of documentation can be your worst enemy.

It is also important to document what has worked well and why it worked well. This can lead to new opportunities. Schools and colleges may find new ways of providing lessons or extracurricular activities for students and others to participate in and benefit from. They may also provide new ancillary services that people find easier to participate in and would be happy to pay for. Hospitals and other health care facilities may have learned new ways to connect patients and residents to family and other caregivers. Telehealth and telemedicine may lead to quicker and more responsive patient and resident care. Community organizations can utilize lessons learned to engage more volunteers and to reach out to those who need their services.

In summary, we may all learn some new things coming out of the pandemic that we may not have considered otherwise. Those new “discoveries” may help provide services into the future in new and better ways.

The information and advice we are providing for this matter relates to COVID-19 legislative relief measures. Because legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that could modify some of the advice and information provided to you, after the conclusion of our engagement. We, therefore, make no warranties, expressed or implied, on the services provided hereunder.

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