Many providers have received several payments from the U.S. Department of Health & Human Services (HHS) and the Health Resources and Services Administration (HRSA) as part of both the general and targeted distributions to reimburse for eligible health care expenses and/or lost revenue attributable to COVID-19. The acceptance and corresponding attestation of these payments were accompanied by numerous terms and conditions, two being compliance with reporting requirements and being subject to Single Audit requirements. At the time of distribution, HHS hadn’t released any additional information related to the reporting requirements or clarification on whether providers who attested to payments under the Provider Relief Fund would be subject to Single Audit. That is, until HHS released a notice of post-payment reporting requirements on July 20, 2020 and three new FAQs added on July 22, 2020 confirming that Provider Relief Fund payments are subject to Single Audit requirements.
Reporting Requirements
The notice posted by HHS on July 20, 2020 confirmed that providers who received one or more payments from the Provider Relief Fund exceeding $10,000 are required to submit reports to HHS within 45 days of the end of the calendar year. Providers will be required to report on their expenditures and use of funds for each payment received through the period ending December 31, 2020. The reporting system HHS has setup to collect this reporting data from recipients will become available on October 1, 2020.
HHS clarified that if a provider has expended all funds received under the Provider Relief Fund through December 31, 2020, they may submit one report detailing use of funds. This type of single report may be submitted as early as October 1, 2020 and no later than February 15, 2021. However, if a provider has not fully expended all funds received under the Provider Relief Fund by December 31, 2020, a second report detailing the use of funds that remained after the end of the calendar year will be required no later than July 31, 2021.
The detailed reporting instructions and data collection templates will be posted to the HRSA website by August 17, 2020 and a corresponding Question and Answer (Q&A) session webinar will be scheduled prior to the submission deadline.
Single Audit Requirements
HHS added three new FAQs to the CARES Act Relief Fund FAQs (link to https://www.hhs.gov/sites/default/files/provider-relief-fund-general-distribution-faqs.pdf) on July 22, 2020, which confirmed that recipients of payments under the Provider Relief Fund are subject to Single Audit requirements as defined in Subpart F – Audit Requirements of the 45 CFR Part 75, Uniform Administrative Requirements, Cost Principles, and Audit Requirements For HHS Awards (link to https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=1&SID=df3c54728d090168d3b2e780a6f6ca7c&ty=HTML&h=L&mc=true&n=pt45.1.75&r=PART#sp45.1.75.f). This audit requirement specifically indicates that entities are required to conduct a Single Audit if the reported annual total federal fund expenditures are equal to or exceed $750,000. Many organizations who have received payments under the Provider Relief Fund may not have prior experience with Single Audit requirements and will want to pay close attention to the corresponding requirements and standards.
For-profit and not-for-profit organizations are both subject to the Single Audit requirement. However, HHS clarified that for-profit organizations that receive $750,000 or more in annual federal awards have two audit options 1) a financial audit conducted in accordance with Generally Accepted Government Auditing Standards (45 CFR 75.216) or 2) a Single Audit in conformance with the requirements under 45 CFR 75 Subpart F. The determining factor for for-profit organizations will be whether payments received under the Provider Relief Fund are equal to or greater than $750,000. If so, the organization will be required to conduct a Single Audit in accordance with 45 CFR 75 Subpart F and electronically submit the resulting audit report directly to the U.S. Department of Health and Human Services, Audit Resolution Division.
Given the unpredictable nature of the COVID-19 pandemic, the Office of Management and Budget (OMB) has provided flexibilities, including the extension of time to submit audit reports. We recommend monitoring the OMB website for further details and emailing HRSA’s Division of Financial Integrity with any questions related to obtaining an extension.
Please be on the lookout for additional blog posts and webinar sessions as we continue to monitor the healthcare legislative and regulatory programs related to COVID-19 to bring you the latest and most relevant information for your organization.
About the Authors:
Kelly J. Sauders is a Partner at Deloitte & Touche LLP with over 25 years of experience in the health care industry. She specializes in providing regulatory compliance, risk and control-related services.
Stephanie Santana is a Senior Consultant at Deloitte & Touche LLP where she assists organizations in strategically navigating a variety of regulatory and compliance risks, opportunities, and challenges.
