| Dear Center Members: |
| There has been a lot going on behind the scenes on the single audit front over the last two months between the GAQC staff, Executive Committee, and various federal agencies. This GAQC Alert informs you about key developments with the Provider Relief Fund (PRF) program. Look for another alert soon with other single audit updates and news. |
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PRF Background
The last time we communicated with you on PRF (in GAQC Alert #423), we informed you that single audits of December 31, 2020, and later fiscal year ends (FYEs) that included PRF funding could not be completed due to delays in the launch of the U.S. Department of Health and Human Services (HHS) PRF Reporting Portal. The good news is that we finally have an update to provide based on (1) the recent opening of the PRF Reporting Portal for submissions; (2) recent HHS updates (dated 7/15/21) to the Provider Relief Funds Frequently Asked Questions (FAQs); and (3) our review of the vett draft of the Office of Management and Budget (OMB) 2021 Compliance Supplement section for PRF.
Single Audits of FYEs Prior to June 30, 2021 with PRF
The bottom-line news is that single audits of nonfederal entities with PRF funding that have been on hold can now be completed. PRF will be excluded from the scope of single audits of nonfederal entities with FYEs ending on December 31, 2020, through June 29, 2021 (that is, PRF will not be included on the Schedule of Expenditure of Federal Awards (SEFA) for these FYEs). This change is supported by a new HHS FAQ posted late on July 15, 2021, which states that nonfederal entities will include PRF expenditures and/or lost revenues on the SEFA for FYEs ending on or after June 30, 2021. We have confirmed with HHS that this new guidance supersedes previous guidance in the 2020 OMB Compliance Supplement Addendum which had stated that PRF was to begin being reported on SEFAs for December 31, 2020, and later FYEs.
Single Audits of FYEs on or After June 30, 2021 with PRF
HHS has confirmed that the reporting of PRF on the SEFA continues to be tied to the amounts reported in the PRF Reporting Portal. In the updated PRF FAQs, HHS establishes that the reporting in the PRF Reporting Portal will be based on when PRF was received and that PRF recipients must only use payments for eligible expenses including services rendered, and lost revenues during the period of availability (also known as period of performance), as outlined in the table below.
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Payment Received Period (Payments Exceeding $10,000 in Aggregate Received)
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Deadline to Use Funds
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PRF Portal Reporting Time Period |
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Period 1 |
April 10, 2020 to June 30, 2020 |
June 30, 2021 |
July 1, 2021 to
September 30, 2021 |
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Period 2 |
July 1, 2020 to December 31, 2020 |
December 31, 2021 |
January 1, 2022 to March 31, 2022 |
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Period 3 |
January 1, 2021
to June 30, 2021 |
June 30, 2022 |
July 1, 2022 to September 30, 2022 |
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Period 4 |
July 1, 2021 to December 31, 2021 |
December 31, 2022 |
January 1, 2023 to March 31, 2023 |
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Because the approach taken by HHS is to link the SEFA reporting for PRF to the report submissions to the PRF Reporting Portal, HHS has also clarified in an FAQ posted late on July 15, 2021, that reporting of PRF on the SEFA will be as follows (periods mentioned are defined in the table above):
- For a FYE of June 30, 2021, and through FYEs of December 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 FYE of December 31, 2021, and through FYEs 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 FYEs on or after June 30, 2022, SEFA reporting guidance related to Period 3 and Period 4 will be provided at a later date.
During a July 8, 2021, HHS Webcast, Introduction to the PRF Reporting Portal: Provider Webcast, it was clarified that reporting to the PRF Reporting Portal is based on the payment received period (i.e., no early reporting is allowed). Therefore, even if all PRF funding has been fully expended by a recipient as of June 30, 2021, the reporting to the PRF Reporting Portal and the timing of PRF SEFA reporting is based on the table and guidance above.
We have also provided our comments and feedback to HHS on the vett draft 2021 Compliance Supplement section for PRF and are aware that it has been submitted to OMB in final form. One important change from the 2020 Compliance Supplement will be the inclusion of a detailed list of key line items in the PRF Reporting Portal submission on which auditors will focus when auditing the reporting type of compliance requirement.
Also, the PRF section of 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 commencement of the compliance audit of the PRF program until recipients have completed the PRF report. The table above identities the timeframes that the PRF Reporting Portal submission is required to be made. So, for example, nonfederal entities with June 30, 2021, FYEs that are required to make Period 1 PRF Reporting Portal submissions would do so beginning July 1, 2021, but no later than September 30, 2021. Furthering this example, HHS is advising that the auditor of such a June 30, 2021, FYE entity wait to commence the audit until the nonfederal entity submitted the Period 1 PRF report.
Audits of For-Profit Recipients of PRF
We are still trying to determine the impact and relevance of the above guidance on for-profit recipients of PRF funding. We have been emphasizing the need for such guidance in recent meetings with HHS staff, and we believe that HHS will be developing additional guidance addressing for-profit considerations. The GAQC continues to actively monitor this situation and will communicate developments in future GAQC Alerts.
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Sincerely,
AICPA Governmental Audit Quality Center
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| Register for Supplement Event |
| See GAQC Alert #428 to access member registration information for GAQC Web event, 2021 Compliance Supplement and Single Audit Update, to be held on July 27, 2021, from 1:00 PM – 3:00 PM (Eastern Time). We will hold this event regardless of whether the 2021 Supplement has been issued to share the latest information we have. Want to invite a non-member? Have them access the public registration page. |
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