Providers who received over $750,000 PRF are also subject to a compliance audit. Commercial organizations have two options in fulfilling the audit requirement: 1) an audit in conformance with the requirements of 45 CFR 75 Subpart F (single audit), or 2) a financial audit of the award or awards in accordance with Government Auditing Standards.
Amounts reported on the schedule in the PRF audit (regardless of the option chosen as described above) will align with the PRF period of availability and what is reported in the PRF Reporting Portal. For calendar year-ends, total expenditures and lost revenues from both Period 1 and Period 2 report submissions to the Health Resources and Services Administration (“HRSA”) PRF reporting portal would have been included on the 12/31/21 schedule in the PRF audit. This would include PRF funding received from April 10, 2020, to December 31, 2020. Audits for calendar year-ends of December 31, 2022 will include Period 3 and Period 4 payments.
In addition to PRF amounts, the schedule should also include any other HHS awards received during 2021 including 93.461, COVID 19 Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Funds (Assistance Listing 93.461), COVID-19 Testing and Mitigation for Rural Health Clinics (assistance listing 93.697), and other HHS awards such as NIH Research and Development grants.
The compliance audits are due the earlier of 30 days after the receipt of the audit or nine months after fiscal year end.
The Office of Management and Budget (“OMB”) granted a six-month extension for recipients in Puerto Rico, Alaska, Florida, South Carolina, and North Carolina with Single Audits due between September 18 and December 31, 2022.
Many organizations have been through their first compliance audit for the HHS awards. Below are some common compliance audit issues identified in these audits:
- Missing or incorrect information – Auditors are required to agree certain line items of the HRSA PRF portal submission to the underlying detail. In certain instances, providers were unable to provide supporting detail, or the supporting detail provided did not agree to what was reported in the submission.
- Expense reporting – Expenses reported in the HRSA PRF portal submission as “Other PRF Expenses” should only include the PRF expenses for that reporting period. These should not be cumulative.
- Alternative Reasonable Methodology narrative – The narrative included for the lost revenue calculation did not support the calculation or did not include an explanation of why the methodology was reasonable for the circumstances and how the lost revenues were attributable to COVID.
As providers prepare for the next round of compliance audits, below is information to keep in mind:
- Ensure all HHS award information is readily available and supports amounts reported in the HRSA PRF portal.
- Ensure policies and procedures surrounding the funding are documented and accurately depict the use of the funds and the controls in place over the funds.
- Review the related compliance requirements. The OMB releases a compliance supplement which details the compliance requirements for the funds. Providers should review these to gain a better understanding of the testing to be performed as part of the compliance audit.