The Novel Coronavirus has continued to make major impacts on businesses and individuals as they struggle to recover from the ongoing turmoil resulting from the pandemic.
Change and adaptation have been the themes of 2020 as the pandemic continues to spread. The U.S. government has offered support by providing funding through several stimulus programs to aid businesses that have been adversely affected by COVID-19.
One of these programs is the CARES Act Provider Relief Fund.
CARES Act Provider Relief Fund Reporting Requirements
The Provider Relief Fund was initially created to provide funding to healthcare service providers impacted by the pandemic. While this aid provides some much-needed relief, the funding received could trigger some additional reporting requirements that healthcare providers may not have been subject to in the past. Per the rules of the Office of Management and Budget, if an entity expends $750,000 or more in federal funding in a year, the entity is subject to an audit under the Uniform Guidance, also known as a Single Audit.
Single audits are not new to nonprofit entities receiving federally funded grants meeting or exceeding the $750,000 threshold each year. However, if a nonprofit has not had a Single Audit before, these funds will create a new requirement for a Single Audit, which combines a financial statement audit and a compliance audit over the federal funds. These single audits are due nine months after the fiscal year end.
Additionally, for-profit healthcare providers will likely have questions concerning their reporting responsibilities and audit requirements as a result of receiving the federal aid. The U.S. Department of Health and Human Services (HHS), which provided the CARES Act funds, has released responses to frequently asked questions to provide clarity on funding requirements and reporting. Specifically, HHS addressed the question as to whether a for-profit healthcare provider is subject to Single Audit requirements.
The FAQs outline two options of audit requirements for commercial healthcare providers that received a minimum of $750,000 in the CARES Act funding:
- An audit of the HHS funds awarded according to Government Auditing Standards (GAS audit) or,
- A Single Audit falling under the requirements of 45 CFR 75 subpart F
Both options will require an audit to be performed by an independent CPA to determine whether the funds were properly expended under the award requirements. Documentation of federal award compliance requires additional time and resources. Our advisors recommend becoming familiar with the award requirements, as well as auditing requirements, to ensure proper reporting.
Additional Coronavirus Relief Programs and Reporting Requirements
While the CARES Act funds may trigger first-time audit reporting requirements for many healthcare entities, not all Coronavirus-related relief will result in an audit. The Governmental Audit Quality Center has summarized a list of reporting requirements to consider for various Coronavirus relief funding provided. For instance, funding received under the Paycheck Protection Program through the Small Business Administration will NOT be subject to Single Audit requirements.
Please see additional resources below that you may find helpful:
- CARES Act Provider Relief Fund: FAQs from HHS
- 2 CFR Part 200, Appendix XI Compliance Supplement
- Electronic Code of Federal Regulations
- GAQC Summary of Uniform Guidance (UG) Applicability for New COVID-19-Related Federal Programs (as of September 4, 2020)
- Department of Treasury Memorandum for Coronavirus Relief Fund Recipients
- Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked Questions Related to Reporting and Recordkeeping (Revised)
More Information about Requirements
Compliance with these requirements may leave you questioning what your next move should be.
Warren Averett’s trusted advisors can guide you through your first GAS or Single Audit with ease, and our advisors are equipped with the expertise needed to meet these reporting requirements. Contact your Warren Averett advisor today to get the conversation started, or ask a member of our team to reach out to you.
This article was originally published on August 12, 2020 and was most recently updated on November 16, 2020.