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HHS Provider Relief Fund Audit Requirements

Tiffany Karlin

July 27, 2020

On 7/22/2020, the US Department of Health & Human Services (HHS) issued new FAQs regarding audit requirements for the Provider Relief Fund payments that many healthcare organizations received in response to the economic impact of COVID-19. 

These funds include Provider Relief Fund General, Targeted Distribution payments, Uninsured Testing and Treatment reimbursement payments. This mandate states that both non-profit and for-profit recipients of Provider Relief Fund payments of $750,000 or more (collectively among all payments that have been distributed thus far) will be subjected to government audit requirements.

Non-Profit: Non-profit organizations will be required to include these payments on their Schedule of Expenditures of Federal Awards (SEFA), and if federal expenditures exceed the $750,000 threshold, the organization will be subjected to “Single Audit” requirements. Single Audits require higher levels of testing than a standard audit. They are conducted in accordance with generally accepted government auditing standards and follow testing requirements prescribed by the federal government in an annually issued compliance supplement. The audit will require tests of internal controls over financial reporting and compliance with applicable regulations for major programs. Completed audits will be submitted to the Federal Audit Clearinghouse. Audits are normally due to the Federal Audit Clearinghouse upon the earlier of 30 days from the issuance of the audit reports, or 9 months from the organization’s year-end.

For-Profit: For-profit entities will also be required to have an audit as a result of the receipt of the above-mentioned funding in excess of $750,000. Per the FAQ, there will be two 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 audits of for-profit entities will be sent directly to the HHS Audit Resolution Division.

For many organizations, both non-profit and for-profit, the above requirements regarding the HHS Provider Relief Fund payments will trigger the organization or company’s first audit.  For others that have had previous audits, the payments may require increased auditing requirements since the prior audits may not have been Single Audits, or conducted under generally accepted government auditing standards. 

Next Steps: Our Mueller Prost Healthcare Audit Team is here to support you. If you think you may be subject to the above audit requirements, please reach out and we can look at your specific situation to determine if the audit requirements may apply.  If they do, we can assist you in navigating these new requirements, provide information on what to expect during these enhanced audits, and can conduct the required audit for your organization or company.

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