Single audit rules clarified for Provider Relief Fund recipients Some confusion was lifted last week for practitioners who perform single audits of health care entities, when the U.S. Department of Health and Human Services (HHS) clarified rules for single audits of nonfederal entities that received pandemic-related assistance from the Provider Relief Fund (PRF). Over the last several weeks, HHS has established in its PRF FAQs that the reporting in the PRF Reporting Portal will be based on when PRF payments were received. HHS also has clarified that PRF recipients must only use payments for eligible expenses including services rendered, and lost revenues during the period of availability (also known as the "period of performance"), as outlined in the table below: Information included in the newly released HHS FAQs states that nonfederal entities will include PRF expenditures and/or lost revenues in the schedule of expenditures for federal awards (SEFA) for fiscal years ending on or after June 30, 2021. The AICPA Governmental Audit Quality Center (GAQC) has confirmed with HHS that the new guidance supersedes previous guidance in the 2020 OMB Compliance Supplement Addendum that indicated PRF reporting was to begin for fiscal years ending Dec. 31, 2020, and later. Therefore, PRF expenditures and/or lost revenues will be excluded from the scope of single audits of nonfederal entities with fiscal years ending Dec. 31, 2020, through June 29, 2021. For those audits, PRF expenditures and/or lost revenues will not be included on the SEFA. Also, according to the FAQs, a nonfederal entity's SEFA reporting is linked to its report submissions to the PRF Reporting Portal. Therefore, the timing of SEFA reporting of PRF payments will be as follows: For a fiscal year end of June 30, 2021, and through fiscal year ends of Dec. 30, 2021, recipients are to report on the SEFA, the total expenditures and/or lost revenues from the Period 1 report submission to the PRF Reporting Portal. For a fiscal year end of Dec. 31, 2021, and through fiscal year ends of June 29, 2022, recipients are to report on the SEFA, the total expenditures and/or lost revenues from both the Period 1 and Period 2 report submissions to the PRF Reporting Portal. For fiscal year ends on or after June 30, 2022, SEFA reporting guidance related to Period 3 and Period 4 will be provided at a later date. The GAQC also expects that the 2021 Compliance Supplement will advise that since the PRF report is to be tested as part of the reporting type of compliance requirement, auditors should consider delaying the start of the compliance audit of the PRF program until recipients have completed the PRF report. The GAQC still is trying to determine the impact and relevance of the above guidance on not-for-profit recipients of PRF funding and will communicate any developments as soon as they are known.https://www.journalofaccountancy.com/news/2021/jul/single-audit-rules-clarified-provider-relief-fund-recipients.html
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