In response to the increased demand and need for healthcare services during the COVID-19 pandemic, the U.S. Department of Health and Human Services (HHS) provided thousands of hospitals and healthcare providers assistance through the Provider Relief Fund (PRF) program (CFDA 93.498) and other programs.  In accordance with subsection 75.216 of the Uniform Guidance issued by the Office of Management and Budget (OMB), any provider who expends more than $750,000 of HHS funding during a given fiscal year is subject to the audit requirements described in the Uniform Guidance. These audit requirements would apply to not-for-profit agencies, as well as for-profit providers.

Not-for-Profit Provider Audit Requirements

Not-for-profit agencies should refer to subpart F of the Uniform Guidance to determine the extent of the audit requirements in conjunction with funding received from other Federal programs. For more information about the new programs related to COVID-19 and the applicability under the Uniform Guidance, see our earlier post on 2020 Compliance Requirements for Federal Funding: What We Know Now. Have a question? Our not-for-profit team of professionals can help – contact us for ideas and insights.

For-Profit Provider Audit Requirements

For-profit providers who expend more than $750,000 have the option to conduct (1) a financial related audit of a particular award (or all awards if received under multiple HHS programs) in accordance with Government Auditing Standards issued by the Comptroller General of the United States; or (2) a full single audit in accordance with Uniform Guidance subpart F, which would require a financial statement audit and an audit of your compliance with the major Federal program. If you have questions or need additional insight, the Barnes Dennig team of assurance professionals is here to help.

Navigating the Nuances Needs In-Depth Knowledge

In August 2020, the OMB issued the most recent compliance supplement, aimed at providing critical guidance to auditors on program information, applicable compliance requirements, and suggested audit procedures for many Federal programs. However, since the PRF program is not specifically listed, auditors will need to follow Part 7 of the supplement (Guidance for Auditing Programs Not Included in This Compliance Supplement).

This guidance is relatively vague and requires a significant amount of judgment regarding the applicable compliance requirements and appropriate audit procedures based on the specifications listed in the grant agreement. Auditors need to be well versed in compliance auditing for similar programs to ensure they have established the right approach and testing strategies for this program.

If your organization is a healthcare provider (either for-profit or not-for-profit) and you have questions about the audit requirements for the funding you received through the CARES Act or other HHS programs, contact us and let’s set up a conversation. We’re here to help.