Today's post is from Cory Rutledge, Principal and leader of CLA’s Senior Living Practice. He previews what we know to date about the single audit requirement related to COVID relief funds.
The Department of Health and Human Services (DHHS) recently indicated that payments received via the Provider Relief Fund (PRF) will be subject to single audit requirements. Unless you’ve previously been involved in a single audit, you may not know this term, understand these audit rules or ensure you’re in compliance. We’re here to help.
What is a single audit?
Generally speaking, a single audit is a report required of Federal grant recipients that outlines the recipient’s compliance with the rules and regulations of the grant award. The single audit is intended to create a level of assurance that the recipient has adequate controls in place surrounding the expenditure of Federal funds. The audit is required to be conducted by an independent public accounting firm hired by the auditee.
To whom is this applicable?
Simply stated, if you received over $750,000 in federal awards, which includes the PRF payments, a single audit will be required. All health care provider types, including hospitals, clinics, skilled nursing facilities, dental groups, and various organizations serving Medicaid populations are included in this requirement. Single audits are required for for-profit, nonprofit, and governmental entities that meet the $750,000 threshold. Given the magnitude of payments being distributed from the PRF, there is a high probability a single audit may be required for your organization.
What we know
To date, very few details have been released in terms of the specific compliance requirements that will need to be tested. However, given what we know about other single audit requirements, we anticipate that DHHS will be interested in at least three components:
- Ensuring the recipient has adequate internal controls surrounding the receipt and use of the funds;
- Ensuring the recipient followed the terms and conditions of the funds received; and,
- Testing of lost revenue and qualified expenditures.
What we do not yet know
Plenty, but as time goes on, we expect specific compliance requirements to be determined and communicated. Rest assured that we are watching this very closely, and we will provide updated communication via the HI2 blog and thought leadership articles as soon as there is news to share.
CLA can help
CLA performs more single audits than any firm in the country. Our experience in helping organizations navigate single audit requirements can give you peace of mind and allow you to focus your energy on your core business…especially during this challenging time.
For organizations that need help preparing for a single audit, we are well equipped to help you in creating a comprehensive approach to evaluating, tracking and documenting internal controls and use of PRF funds in anticipation of single audit requirements. Once the audit details are clarified, we can conduct your single audit – and our technology-forward audit approach allows us to execute the audit without ever stepping in your building!