Let’s Keep Those Provider Relief Funds!

March 25, 2021

By Daniel Gibson

During 2020, many providers of health care services saw “cash drops” into their bank accounts as a result of the U.S. government’s reaction to the pandemic that literally shutdown the American economy. The federal government allocated $175 billion, through their Provider Relief Fund (PRF) Program, to health care providers. Many received, as part of Phase 1, a percentage of a $30 billion general distribution, funds that they weren’t expecting. Subsequently, reporting was required for other PRF distributions for select targeted distributions. The purpose of the PRF was to assist in paying for health care-related expenses and expenses connected with COVID-19 safeguard measures.

In addition to the many reporting requirements that providers will need to complete, health care providers who received a total of $750,000 or more in federal funds (including PRF payments and other federal and state financial assistance) during a fiscal year are subject to Single Audit requirements. (See regulations at 45 CFR 75.501.) Those receiving PRF payments may be subject to additional auditing to ensure the accuracy of the data submitted to Health and Human Services (HHS). Health care providers who provide inaccurate information to HHS will be subject to repayment of funds and other legal action.

So, in summary, the much-needed federal government cash infusion to organizations in the health care industry comes with additional responsibility:

  1. Recipients must keep adequate records and cost documentation in connection with the PRF.
  2. Recipients receiving $750,000 or more will require a Single Audit on the use of these funds. The deadline for submitting this audit to HHS depends on the year-end of the entity. Recently issued Office of Management and Budget (OMB) Memo M-21-20 has provided an extension for Single Audits. For December 31, 2020 year-end entities, the deadline is now March 31, 2022. Due dates can be subject to change by the OMB. Providers are urged to contact their CPA firms as early as possible to plan, prepare and perform this audit.

It is important to work with professionals who have experience guiding clients through this process. Please work with your advisors.

About Daniel Gibson

Daniel Gibson provides accounting, tax planning and consulting services to real estate and services industries and is a member of the AICPA and New Jersey Society of Certified Public Accountants.