On April 29, 2020, the U.S. Department of Treasury (Treasury) issued an updated FAQ (the Updated Guidance). Notably, Q39 confirms Treasury Secretary Steven Mnuchin’s public statement that the SBA will audit all Paycheck Protection Program (PPP) loans in excess of $2 million upon submission of a loan forgiveness application.

The Updated Guidance further provides that the SBA will audit not only all loans in excess of $2 million dollars but that these audits will be, “in addition to other loans as appropriate.” The audit of such loans will be “following the lender’s submission of the borrower’s loan forgiveness application.” The Updated Guidance also specifies that additional guidance implementing this procedure will be forthcoming.

Also of note, in Q31, Treasury provided a safe harbor provision on whether the borrower acted in good faith in certifying the need for the PPP loan if the borrower repays the loan by May 7, 2020.