If your organization received funding through the Provider Relief Funds (PRF) program, it is important to note that you are now subject to new audit requirements.
The US Department of Health and Human Services (HHS) has provided audit guidance related to the PRF program, which is the second largest new federal program established by the CARES Act.
HHS has provided funding under this program to thousands of hospitals and other healthcare providers that are non-federal entities (i.e., states, local governments, and not-for-profits), as well as for-profit entities.
There have been many questions about whether non-federal entities expending these funds will be subject to single audit and what, if any, the audit requirements will be for for-profit entities.
HHS has been deliberating these questions internally and below is what they have communicated to the Governmental Audit Quality Center (GAQC):
• Non-Federal Entities. The assistance listing for the PRF program at https://beta.sam.gov has indicated that subparts B, D, and E of the Uniform Guidance apply and that the program will be subject to single audit. However, we were aware that HHS continued to deliberate that conclusion internally.
HHS has now confirmed to the GAQC that the information in https://beta.sam.gov is correct and that these funds will be subject to single audit for non-federal entities. GAQC reports that this program will be addressed in OMB's expected addendum to the 2020 Compliance Supplement which is expected this Fall.
• For-Profit Entities. HHS had not previously decided about the for-profit entity audit requirements for the PRF program. However, HHS has recently informed the GAQC that for-profit entities that expend $750,000 or more of these funds during the entity's fiscal year will be subject to an audit as described in section 75.216 of HHS's adoption of the Uniform Guidance.
That section discusses two options for audits of commercial organizations:
(1) A financial related audit of a particular award or multiple HHS awards in accordance with Government Auditing Standards; or
(2) A full single audit that meets the requirements contained in subpart F of the Uniform Guidance.
The GAQC Executive Committee is currently discussing best practices for performing these for-profit engagements and will consult with HHS as well.