By Ruth Snell, Holtzman
The federal government responded to the effect of the Coronavirus (COVID-19) pandemic on healthcare providers by making Provider Relief Funds (PRF) available to affected healthcare providers. It was easy for providers to apply for and receive the funds, but the PRF came with strings attached.
Recently, the U.S. Department of Health and Human Services (HHS) decided that funds expended under the new PRF program (notably the second largest new federal program established by the CARES Act), are considered federal awards subject to Uniform Grant Guidance. Therefore, they will be subject to a single audit or a financial-related audit. In other words, if a healthcare provider received $750,000 or more in annual federal awards during 2019, the healthcare provider must obtain a single audit or a program-specific compliance audit.
If your organization received funding through the Provider Relief Funds program, here are 5 things to keep in mind:
- It is important for your organization to identify and document the qualifying PRF expenditures in a timely manner as you spend your funds.
- The $750,000 threshold is calculated at the consolidated organization level, so if multiple entities are owned by single parent, all the PRF received by the different entities might need to be added together to determine if the threshold is met.
- The deadline for completing the audit is usually 9 months after an entity’s year end.
- Now is the time to reach out to your auditor to discuss what effect PRF has on your audit.
- If you do not already have a reliable auditor that is experienced in performing these types of audits, now is the time to find one.
For more insights about this new single audit requirement and how it may impact your organization, watch our On-Demand Accounting Hot Topics Webinar (discussed at 44:36). The Holtzman team will also continue to monitor the situation around this new guidance as it becomes available.
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Note: The content appearing in this article is for informational purposes only and should not be construed as legal, accounting, tax, or investment advice or opinion provided by Holtzman.