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Healthcare: Are You in Compliance? Understanding New Budgeting and Accounting Rules


8/26/14

Health Resources and Services Administration (HRSA) Policy Information Notice (PIN) 2013-01 establishes new guidance for health centers under the new auspices of the Health Center program – Section 330 of the Public Health Service Act regarding grant funds. Health centers are not only required to continue to establish a “total budget,” reflecting the cost of operations, expenses, and revenues for the scope of project, but also to identify the specific cost being paid for with the section 330 grant funds. This represents a vast departure from prior requirements in that grantees must now track, document, and substantiate 330 grant fund expenses to ensure they are consistent with not only program requirements, but also allowable cost.

Federally Qualified Health Centers (FQHCs) that are not accustomed to quantifying and allocating these expenses will be challenged in meeting the rigid compliance requirements. Health centers need to be prepared for audits from not only their independent auditors under OMB Circular A-133, but also from the Office of the Inspector General (OIG) and HRSA Operational Assessments or any other HRSA audits and site visits. It is critical to properly structure the budgeting of 330 grant funds in a manner that provides evidence of appropriate tracking of the 330 grant funds in relevant accounting records.

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This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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