Another quiet week on the Provider Relief Fund updates from HHS. Numerous FAQs were updated and modified this week, but none were entirely new. They offered a few additions to the January 15, 2021 Post Payment Reporting Notice with two items of note:
- A question was asked if only April and May 2020 lost revenues could be used for reporting. HHS answered no, that using actual or budgeted lost revenues needed to capture all 12 months of CY 2020 revenues.
- A question regarding reporting on targeted and general distributions was asked and if reporting would be separate. HHS confirmed that reporting would be consolidated by provider and Tax Identification Number and not only by the type of payment received.
This week we have a different message in our Weekly Insights. We’re providing some of the most common talking points that we hear about for you to use to communicate with your board of directors or shareholders regarding PRF payments and reporting requirements.
On the how and why we received funds and will we owe any back
- PRF payments are to support COVID-19 expenses and lost revenues your organization incurred during the pandemic.
- These funds were paid out very quickly by HHS this past spring and were not necessarily tied to the need of your organization at the time of payment. If your organization can’t use all of the grants, they may have to give a portion back.
- HHS is treating the PRF payments as the “payment of last resort” to battle the COVID-19 pandemic. Any other State and local grants or other funds received to support your organization against COVID-19 must be used first before using the PRF funds
- You will report on the use of these funds soon, but the exact timing has been delayed and we await information from the new secretary of HHS
- Guidance on reporting has been limited but continue working to support as much of the payments through lost revenues and incurred COVID-19 expenses
On the recent stimulus bill and changes to the program
- The December 22, 2020 COVID relief bill gave your organization additional flexibility in how we calculate your losses due to COVID-19. Specifically, there are multiple ways to calculate lost revenues and can look at actual year-over-year losses, current year budget to actual losses, or any reasonable method that we deem suitable
- Your organization was also granted additional flexibilities and you can now transfer funds received between entities even if they did not receive the initial payment. As long as you report on the use of the funds for the overall organization the funds can be moved to the area that has the most need
On additional governance and financial reporting
- If you have received more than $750,000 in grants you will be required to complete a single audit in addition to your annual financial audit
- Specifically, the requirement of a single audit will require Generally Accepted Government Auditing Standards to be applied to your financial statement audit, which means there will be a new report of the independent auditors related to internal control over financial reporting and compliance and other matters. There will also be another new report of the independent auditory related to compliance with use of your provider relief funds, as is stipulated by HHS.
- While your organization is expected to report lost revenues on the HHS portal when it opens, this is a separate reporting submission from the Single Audit requirements under the Uniform Guidance. The Single Audit reporting includes a schedule identifying federal expenditures and qualifying lost revenues under the PRF from the inception of the PFR through the entity’s fiscal year end starting with December 31, 2020 year ends. The amounts reported between the HHS portal and the Single Audit could differ based on the evolving HHS guidance.
To download a PDF version of this blog post, click here. For more FAQs from HHS, you can visit their website here. If you have any questions regarding the Provider Relief Funds or the Post Payment Reporting Notice, please contact your local Blue and Co. advisor or reach out to one of Blue and Co.’s Directors, Michael Alessandrini.