Through the Coronavirus Aid,
Relief, and Economic Security
(CARES) Act and the Paycheck
Protection Program and Health Care
Enhancement Act (PPPCHEA), the
federal government allocated $178 billion in
Provider Relief Fund (PRF) payments to support
healthcare providers through the COVID-19
pandemic. Because the money comes from the
federal government—it is being distributed by
the Department of Health and Human Services
(HHS)—those accepting the money, including
nonprofits, could be subject to Single Audit
requirements, as outlined in the regulations
at 45 CFR 75 Subpart F. Requirements for a
Single Audit are triggered when an organization
expends, in aggregate, $750,000 or more of
federal funds in a year.
What you should know about the Single
Audit Requirement:
• The federal government specifies that
independent auditors should be engaged to
determine whether the financial statements,
including a schedule of expenditures of
federal awards (SEFA), are presented fairly.
• In conducting a Single Audit, auditors look
to ensure the entity complied with the terms
and conditions of the federal award as well as
test the internal controls of the organization
relevant to compliance.
• The auditor you select should be specifically
trained for and capable of conducting a
Single Audit. Not all auditors or auditing firms
perform Single Audits.
• The Office of Management and Budget’s
(OMB) Compliance Supplement specifies the
PRF reporting requirements.
• The entity, with assistance from the auditor,
will be required to submit the audit through
the Federal Audit Clearinghouse. The data will
be analyzed to determine whether the money
has been used as intended.
• Until recently, many healthcare providers
were uncertain as to how to report their
Provider Relief Fund expenditures. Financial
statements for calendar-year organizations
could not be issued because there was
no definitive guidance or mechanism for
reporting on their uses of the funds until
July 1, 2021.
• The new reporting guidance includes hard
deadlines for the use of the funds and
reporting through both the PRF reporting
portal and on the entity’s SEFA. However,
entities are reporting expenditures in
a manner they are not accustomed to.
Audits for a particular year typically cover
expenditures made during that year. But
entities spending part or all of their funds in
the year they receive them will not report on
those expenditures until the following year
(see chart below).
• HHS had indicated the deadlines to report
are firm; there are no extensions.
What you should do now:
• Start gathering the information you will
need, as indicated in the HHS reporting
portal, including a wide range of
demographic and financial information.
• Draft your SEFA and determine if you
require a Single Audit.
• Document key positions regarding
the calculations of lost revenue and
qualifications of expenses in relation to PRF
compliance requirements.
• Engage an independent auditor with
the proper training and experience, one
who is qualified and practiced at doing a
Single Audit.
We are here to help. Call us at 724-934-5300;
or email me at dmastropietro@hbkcpa.com.
Speak to one of our professionals about your organizational needs
