Commercial Organizations and Provider Relief Funds: Three Things You Need to Know
With the enactment of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on April 10, 2020, eligible healthcare providers that billed Medicare fee-for-service received Provider Relief Fund (PRF) distributions from the Department of Health and Human Services (HHS). The purpose of these distributions was to provide financial relief to healthcare organizations during the COVID-19 pandemic. PRF distributions have been made in phases and Phase 1 occurred via automatic payments made in April and May 2020. Phase 2 distributions occurred on a rolling basis throughout the remainder of 2020. Further, into the pandemic, PRF Phases 3 and 4 were created, which expanded the funding to newly eligible healthcare providers. Phases 3 and 4 required an application process to receive the distribution.
Commercial organizations which used $750,000 or more of federal funding, which includes the PRF for eligible expenses or lost revenue during the fiscal year will now be subject to a Single Audit or a financial related audit of the award, in accordance with Government Auditing Standards (GAS):
As defined by the Federal Regulation 45 CFR § 75.2, a commercial organization is an organization, institution, corporation, or other legal entity, including, but not limited to, partnerships, sole proprietorships, and limited liability companies, that is organized or operated for the profit or benefit of its shareholders or other owners. The term includes small and large businesses and is used interchangeably with for-profit organizations.
Important Items to Note About the Audit Requirements:
- The audit requirement is due the earlier of 30 calendar days after the receipt of the audit or nine months after the fiscal year. The commercial organization may qualify for a 6-month extension.
- Commercial organizations must submit their audit report to the Health Resources & Services Administration’s Division of Financial Integrity at PRFAudits@hrsa.gov.
- It is critical to understand the reporting requirements for the PRF Portal and the audit requirements outlined below.
| Reporting Period* | Payment Received Period | Deadline to Use Funds | PRF Portal Reporting Time Period | Schedule of Expenditures of Federal Awards (SEFA) Reporting*** |
| Period 1 | April 10, 2020, to June 30, 2020 | June 30, 2021 | July 1, 2021, to September 30, 2021** | Fiscal Year End (FYE)’s of June 30, 2021, through June 29, 2022 |
| Period 2 | July 1, 2020, to December 31, 2020 | December 31, 2021 | January 1, 2022, to March 31, 2022 | FYE’s of December 31, 2021, through FYE’s June 29, 2022 |
| Period 3 | January 1, 2021, to June 30, 2021 | June 30, 2022 | July 1, 2022, to September 30, 2022 | Guidance has not been released |
| Period 4 | July 1, 2021, to December 31, 2021 | December 31, 2022 | January 1, 2023, to March 31, 2023 | Guidance has not been released |
*Reporting period generally corresponds with the Phase. For example, Period 1 is generally Phase 1 funds.
**Grace period until November 30, 2021.
***Corresponds to the audit period.
If your organization received Provider Relief Funds and you have questions about the award and the audit requirements, our seasoned and experienced professionals are here to help. Visit our website or contact a member of our team for more information.
About the Author
McKonly & Asbury is a Certified Public Accounting Firm serving companies across Pennsylvania including Camp Hill, Lancaster, Bloomsburg, and Philadelphia. We serve the needs of affordable housing, construction, family-owned businesses, healthcare, manufacturing and distribution, and nonprofit industries. We also assist service organizations with the full suite of SOC services (including SOC 2 reports), ERTC claims, internal audits, SOX compliance, and employee benefit plan audits.
