If your organization received Provider Relief Funds (PRF) during the COVID-19 pandemic with a fiscal year ending December 31, now is the time to start your compliance audit of the PRF distributions and other U.S. Department of Health & Human Services (HHS) awards, if applicable. An audit of federal awards may be required if your organization expended $750,000 or more in annual federal awards. This requirement applies to all types of organizations: for-profit, nonprofit, and governmental.
Determining what gets reported on the schedule of awards to be audited depends on an organization’s fiscal year-end. For December 31, 2021 fiscal year-end organizations, PRF payments reported in both Period 1 and Period 2 must be combined when determining if the $750,000 threshold has been met. See the table below for details regarding what period of funding is included in the audit, based on fiscal year-end date.
| Year-End | What is Included in the Schedule |
|---|---|
| June 30, 2021 through December 30, 2021 | Total PRF payments used for expenditures and lost revenues from the Period 1 report submission to the Health Resources & Services Administration (HRSA) PRF Reporting Portal |
| December 31, 2021 through June 29, 2022 | Total PRF payments used for expenditures and lost revenues from both Period 1 and Period 2 report submissions to the HRSA PRF Reporting Portal |
| June 30, 2022 through December 30, 2022 | Total PRF payments used for expenditures and lost revenues from both Period 2 and Period 3 report submissions to the HRSA PRF Reporting Portal |
| December 31, 2022 through June 29, 2023 | Total PRF payments used for expenditures and lost revenues from both Period 3 and Period 4 report submissions to the HRSA PRF Reporting Portal |
| June 30, 2023 and after | Reporting guidance related to Period 5 will be included in the 2023 Compliance Supplement |
The type of audit required will depend on the type of organization. Nonprofit organizations will require a Single Audit while for-profit entities have up to three options as listed below, each with different scope and requirements:
- Single Audit
- GAGAS Financial-Related Audit
- Program-Specific Audit*
*Option only applicable if the organization received only one HHS award
Nonprofit organizations must include all federal awards in the Schedule of Expenditures of Federal Awards (SEFA) for their Single Audit, and for-profit entities must include all HHS awards subject to audit requirements. HHS awards include the following:
- 93.498, Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
- 93.461, HRSA COVID-19 Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund
- 93.697, COVID-19 Testing and Mitigation for Rural Health Clinics
- Other HHS awards such as NIH Research & Development Grants, etc.
Such audits will include testing of compliance on use of the funds according to the terms and conditions and may include testing of the organization’s financial statements and internal control over compliance of the program. These audits are generally due nine months after the organization’s fiscal year-end, so for organizations having a calendar fiscal year, the audit is currently set to be due by September 30, 2022.
The determination of the reporting entity at which the audit should be performed can be complicated, particularly with respect to for-profit entities and the parent-subsidiary relationships and the ability to transfer funds to subsidiaries based on need. For further guidance regarding your HHS audit needs, please contact a professional with Forvis Mazars or submit the Contact Us form below.