The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and related federal programs have provided businesses and organizations across the U.S. with crucial funding in order to survive the effects of the coronavirus pandemic sweeping the nation. Four of the largest federal programs established include the Paycheck Protection Program, Provider Relief Fund, Coronavirus Relief Fund and Educational Stabilization Fund. Healthcare entities receiving funding from any of these four programs, or any other federal program, should be on the lookout for additional audit and reporting requirements.

Guidelines for Audit Requirements

Based on an update from the U.S. Department of Health and Human Services (“HHS”) on July 22, 2020, Provider Relief Fund payments are required to be included in determining if a recipient organization, other than commercial (for profit) organizations, will be subject to single audit requirements. If total federal fund expenditures are $750,000 or more, the entity is required to have a single audit in accordance with 45 CFR 75. HHS also announced that for-profit entities that expended $750,000 or more of the Provider Relief Funds during the entity’s fiscal year will be subject to audit in accordance with 45 CFR 75. For-profit entities have two options to meet the requirements – a financial audit conducted in accordance with generally accepted government auditing standards or a single audit in conformance with the requirements under 45 CFR 75, Subpart F.

Programs Impacted

The Paycheck Protection Program is not subject to single audit requirements. However, the Coronavirus Relief Fund and Educational Stabilization Fund are subject to single audit requirements. Additionally, other reporting requirements may also be applicable depending on the federal program. Please reach out to your LBMC Audit team with questions as we continue to monitor the ever-changing audit and reporting requirements surrounding the CARES Act and related federal programs.

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