Some healthcare suppliers—together with states, universities and different organizations—are getting an additional three months to audit their COVID-19 reduction assist.
The White Home’s Workplace of Administration and Funds on Tuesday launched steerage with directions on find out how to audit cash acquired below its COVID-19 reduction distributions, together with the Coronavirus Help, Aid, and Financial Safety Act, or CARES Act. The principles lengthen the audit deadline, as many had anticipated. Well being programs that acquired Supplier Aid Fund grants had held off on auditing that cash whereas they waited for particular guidelines.
Some healthcare suppliers might want to have their auditors carry out a sort of audit they’ve by no means been topic to earlier than. So-called single audits are required when not-for-profit and governmental entities obtain greater than $750,000 in federal grant awards, which doesn’t embody Medicare and Medicaid.
Many suppliers acquired greater than $750,000 in Supplier Aid Fund grants alone. As of October, Congress had put aside $175 million for the fund. The most recent COVID reduction bundle Congress unveiled Monday provides one other $three billion.
Whereas federal grants are routine for state governments and universities, they are not as widespread for healthcare suppliers. For some suppliers, this may very well be their first time receiving a federal grant, or greater than $750,000 value, stated Mary Foelster, senior director of governmental auditing and accounting with the American Institute of Licensed Public Accountants.
“For a few of them it is a newer idea in lots of instances,” she stated.
The OMB points new guidelines yearly round the way it expects federal grants to be audited. The steerage covers audit procedures and the way recipients can spend the cash. This 12 months, these guidelines got here out in August.
Nonetheless, the August launch didn’t embody steerage on auditing CARES Act cash and different COVID-19 reduction packages, as they had been simply being rolled out. That is included in Tuesday’s compliance complement.
Single audits are usually due 9 months after the group’s fiscal year-end. Which means a corporation with a June 30, 2020 year-end must file by March 31, 2021.
The OMB’s steerage stated some organizations may have an additional three months to file their single audits. That applies to these whose authentic due dates had been between Oct. 1, 2020 by June 30, 2021. The OMB added that recipients don’t want to hunt approval for the extensions, however they do want to offer a purpose for the delayed submitting.
“I am guessing that healthcare suppliers might be very pleased with that,” Foelster stated of the prolonged deadline.
The additional three months might be essential to suppliers as a result of the foundations up to now been unclear and plenty of hospitals are nonetheless inundated with COVID-19 sufferers whereas additionally attempting to vaccinate their front-line employees, stated Aparna Venkateswaran, a senior supervisor with Moss Adams.
“There’s only a lot occurring that I believe three months could be useful,” she stated.
The prolonged deadline is just for entities that acquired COVID reduction funding.
Some Supplier Aid Fund-specific guidelines included within the OMB’s addendum:
- Grants can go towards making ready for, stopping and responding to the coronavirus. That encompasses constructing short-term buildings, property leases, medical provides and gear, together with private protecting gear and testing provides, elevated workforce and coaching, emergency operation facilities, retrofitting services and including surge capability.
- Grants distributed below the Expert Nursing Facility An infection Management Distribution can solely be used to manage particular COVID-19 assessments, report these assessments to native, state and federal governments and rent employees to offer care or administrative help. They will additionally reimburse for an infection management actions and companies for residents like know-how to attach with members of the family who cannot go to.
- As anticipated, the OMB stated the cash cannot reimburse bills or losses anticipated to be reimbursed by different sources or that different sources are obligated to reimburse. That features the Federal Emergency Administration Company, for instance.
- The steerage additionally has detailed directions on when and the place to report COVID-related bills and misplaced revenues. It says that preserving the grant cash for at the least 90 days with out contacting HHS is deemed to have accepted the phrases and situations.
The brand new COVID reduction bundle once more relaxes the phrases for letting suppliers preserve the grant funds. Suppliers can now put the grants towards misplaced income in contrast with budgeted income for 2020, as an alternative of precise income for 2019. That is according to HHS’ authentic steerage from June, which the company then flip-flopped on quite a few instances earlier than lastly being overruled by Congress.
Federal grant packages sometimes solely enable recipients to submit for expense reimbursement, so when Congress allowed entities to make use of the cash on misplaced income, that was a “new idea on the planet of single audits,” Foelster stated. That is additionally why the steerage has been a shifting goal.
Quite than performing a single audit, for-profit suppliers have the choice of performing an audit below Authorities Auditing Requirements, which focuses extra on the Supplier Aid Fund grants than your complete entity, Foelster stated.
In some instances, this may be the primary time a healthcare supplier might be topic to the one audit, particularly since Medicare and Medicaid are scoped out packages that are not topic to the one audit, stated Kinman Tong, a accomplice with Moss Adams.
“So that is probably, hopefully, their once-in-a-lifetime of that group that requires the one audit,” he stated.
The OMB’s addendum additionally directs organizations that acquired donated private protecting gear bought utilizing federal help funds to offer the truthful market worth of these provides as a standalone footnote of their listing of grant expenditures. That cash isn’t audited, nor does it depend towards the $750,000 single audit threshold, per the OMB.