With NSW’s COVID-19 business grant program now in full swing, the peak accounting bodies have urged accountants to be aware of professional practice and insurance implications in signing off on decline in turnover declaration letters for their clients.
Gavan Ord, CPA Australia’s senior manager of business and investment policy, believes accountants and bookkeepers will need to approach such requests with their “eyes wide open” as risks emerge.
“You are being asked to determine whether your client is eligible for the payment,” said Mr Ord. “Your client is responsible for providing accurate documentation to enable you to make this assessment.
“As the practitioner, you are responsible for exercising professional judgement and interpreting the information provided. Therein lies the risk.
“Short of declining these requests, which may damage your client relationships, there’s no way to avoid the risk altogether. But you can lower your risk exposure by ensuring your client fully understands their obligations.”
The 2021 COVID-19 business grant provides grants of up to $15,000 to NSW businesses who have suffered a decline in turnover as a result of the state’s ongoing lockdown.
Those who have experienced a decline of 70 per cent or more will be provided with the full $15,000 grant, while those with a 50 per cent decline will receive $10,500, and those with a 30 per cent decline can expect $7,500.
Service NSW, the agency administering the program, has warned businesses that untrue or misleading information included in their application may result in a referral to the NSW Police, with criminal penalties to follow.
The template letter provided by Service NSW notes that practitioners are not expected to have conducted an audit or assurance engagement to verify the reliability, accuracy or completeness of the information provided by their client.
However, Service NSW also notes that the accountant’s letter will be examined in cases where it decides to conduct an audit on an application.
Mr Ord believes practitioners should go one further and include an additional line in their declaration letters: “The business has informed me that their invoice dates are consistent with normal business practice and have not been manipulated for the purpose of receiving the payment.”
Tony Greco, from the Institute of Public Accountants, believes there will be risks with assisting clients who do not have contemporaneous digital records or businesses that are not existing clients.
“The figures in the declaration are factual and if you have the data to support it, I don’t think it is a big deal, but if you haven’t and you have to go digging and it crosses over financial years, then there’s a cost to providing that service,” said Mr Greco.
“If the client is giving you rubbery figures and you haven’t fact-checked [them], then you are just as much at fault.
“Don’t just do nothing and accept your client’s word for it.”
Service NSW crashes on day one
A surge in traffic on Service NSW’s website on Monday resulted in a network outage that halted grant applications for large parts of the day.
The agency has now restored its services, with 5,861 applications being received up to Tuesday morning, with a total request value of approximately $74 million.
Service NSW will also administer the federal and state co-funded JobSaver program, which will provide businesses between $1,000 and $10,000 a week to help them retain employees.
Applications will open from 26 July, with eligibility requirements expected to be published this week.
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