Hi, I am doing an audit on a non- profit project.  The management co, which manages several projects,  pays the wages and payroll taxes for the projects, then the project reimburses them. Salaries and payroll tax expenses are recorded by journal entry into the project’s general ledger when paid.    The management co received a ppp loan. The loan has not been forgiven at this point.

The project is not currently reporting wages or any liability owed to the management company during the 8 weeks.  The project is accrual basis, should they not be recording those wages and the accrual up until it is actually forgiven?