Providers Receive New Single Audit Guidance for Reporting COVID-19 ReliefDecember 29, 2020
Many healthcare organizations will face new single audit requirements this year, in light of the government funding they received to recoup COVID-19 damages. Single audits are required of any non-federal entity (for-profit or not-for-profit) that expends more than $750,000 in federal funds during its fiscal year.
To help organizations achieve compliance, the Office of Management and Budget (OMB) has provided new guidance and deadline relief last week in the 2020 Compliance Supplement Addendum.
Single Audit Deadline Extension
With many single audits put on hold in 2020, pending this new guidance, the addendum offers a three-month extension on all single audit deadlines for organizations with 2020 year-ends through September 30, 2020, as long as they received some form of COVID-19 relief funding. For example, the single audit deadline for eligible entities with June 30, 2020 year-ends is extended from March 31, 2021 to June 30, 2021.
Eligible organizations do not need to obtain approval for this extension, but they must document the reason for the delayed filing.
COVID-19 Reporting Guidelines
The addendum contains guidance on how you should report CARES Act or other COVID-19 relief funds, including:
- Do not include Provider Relief Fund (PRF) expenses and lost revenues on the Schedule of Expenditures and Federal Awards (SEFA) until December 31, 2020 year-end or later. There are specific reporting rules to follow to determine when and what amount to report.
- Donated personal protective equipment (PPE) should be included as a footnote to the SEFA and reflect the fair market value of the PPE at time of receipt.
- Auditor must test compliance of COVID-19 programs with the Federal Funding Accountability and Transparency Act (FFATA) reporting rules, which apply to direct recipients of grants or cooperative agreements who make first-tier subawards of $25,000 or more. This requirement applies not only to pandemic relief, but also to all major programs for audits of fiscal years after September 30, 2020.
Remember, even if your healthcare organization did not require a single audit in prior years, it may now be subject to the requirement if this year’s COVID-19 relief funding put it over the $750,000 threshold.
Please contact Joseph Tomaino, CEO of Grassi Healthcare Advisors, for more information or assistance with preparing for your single audit and reporting COVID-19 relief funds.