Your health center may have been fortunate in receiving an influx of funding from several federal stimulus sources in response to COVID-19, such as HRSA COVID-19 funding, Provider Relief Funds, Uninsured Program Portal funding, and perhaps even additional funding such as support from the Federal Communications Commission (FCC) COVID-19 Telehealth Program. While this additional support provides a substantial benefit to helping your health center maintain capacity through any future COVID-19-related impacts to the business, it also comes with terms, conditions, and regulatory guidance that must be followed. Keep these considerations in mind as you navigate use of these additional funding sources.

1. Is your organization clear on the spending timelines and reporting requirements for the usage of funds?
   
   The Provider Relief Fund (PRF) Reporting Portal recently opened for Reporting Period 2 (Period 2) on Jan. 1, 2022, and will remain open through Mar. 31, 2022, which is when the Period 2 submission is due. All entities that have received $10,001 or more in the aggregate (General and/or Targeted PRF payments) from Jul. 1, 2020, through Dec. 31, 2020, must report on their use of funds (COVID related expenses/Lost Revenue due to COVID-19) in the PRF Reporting Portal for Period 2. The deadline to use funds for payments received in Period 2 was Dec. 31, 2021. HHS has listed some Reporting Portal updates (What's New PRF Reporting 2 Fact Sheet) for returning reporting entities as well as updates for the returning reporting entities who are electing the Lost Revenue option (i.e. changing the methodology for calculating lost revenues, changes to previously reported patient care revenue, etc.). There are also other PRF review resources posted on the Health Resources & Services Administration’s (HRSA) website that can be helpful tools in assisting recipients prepare the PRF reporting submission for Period 2 (Review Resources - PRF Reporting Period 2).
    
2. Have you implemented sufficient procedures for tracking use of funds?
   
   The use of all funding streams will need to be diligently documented so that when reporting on use of funds for Period 2, you will be able to clearly show that multiple funding streams were not being used for the same expenses – that you didn’t engage in any “double-dipping.” This will also facilitate the reporting that will ultimately have to be done for all funding streams to confirm that you have used funding aligned with the terms and conditions on usage. Expenses charged to each funding source should be clearly documented in the accounting records to stand up to audit. Providers should also be cognizant of the fact that the Period of Availability for Period 2 payments has some overlap with PRF Reporting Period 1 (Period 1). Providers will need to demonstrate that expenses and/or lost revenues utilized for Period 2 did not “double-dip” and become duplicative of the same expenses and/or lost revenues recognized in Period 1.
   
   
3. Have you strategically planned how you are going to prioritize?
   
   Each federal funding stream received in response to COVID-19 has different permissible uses and timelines that dictate how and when funds can be spent. Have you examined your operating expenses on a regular basis since the pandemic hit or projected continued impact from COVID-19 to determine how best to allocate funds? Are you prioritizing fund use from the sources that are most restrictive, and with the shortest timeframe, over those that are least restrictive, so that you can make sure you have additional support available if COVID-19 continues to impact your organization?
   
   
4. Have you considered Uniform Guidance Single Audit implications?
   
   Community health centers were eligible for various government funding opportunities, several of which are subject to audit as part of the Center’s annual Single Audit. Health centers have received several COVID-19-related HRSA grants thus far in addition to base grant funding – H8C, H8D, H8E, and H8F Awards – and have been assigned the Assistance Listing (formerly CFDA) number 93.224, which is part of the Community Health Center Cluster Program. Although all these awards have the same Assistance Listing number, they each have different grant numbers, requiring the submission of separate Federal Financial Reports (FFRs – SF-425). Some health centers also received the Health Center Infrastructure Support grant (C8E) through the American Rescue Plan Act (Assistance Listing Number 93.526) which also requires the submission of a Federal Financial Report. Community health centers are expected to track the related expenditures for each individual grant and maintain the related documentation to support the basis of recognition.
   
   The FCC COVID-19 Telehealth Program (Assistance Listing Number 32.006) is a federal award that is subject to Single Audit. Subparts B (General Provisions), E (Cost Principles), and F (Audit Requirements) of the Uniform Guidance are applicable to this program. The program is not considered a grant program. Health centers that are approved for funding must submit an invoice and supporting documentation in order to receive reimbursement for the eligible expenses and services provided. This program is subject to certain compliance requirements as identified in the Office of Management and Budget (OMB) 2021 Compliance Supplement.
   
   Provider Relief Fund General and Targeted Distribution payments (CFDA 93.498), and COVID-19 Testing for the Uninsured reimbursement payments (CFDA 93.461) are also federal awards and subject to Single Audit. Subparts B (General Provisions), D (Post Federal Award Requirements), and F (Audit Requirements) of the Uniform Guidance apply to Provider Relief Funds. Nonfederal entities that expend financial assistance of $750,000 or more in federal awards in a fiscal year are required to have a single or a program-specific audit conducted for that year in order to be compliant with the provisions of 2 CFR 200, Subpart F-Audit Requirements. Provider Relief Funds are subject to certain compliance requirements as identified in the Office of Management and Budget (OMB) 2021 Compliance Supplement. Although, Subpart E (Cost Principles) do not apply to PRF, per the 2021 Compliance Supplement, “charges to the PRF must be necessary, reasonable, accorded consistent treatment and conform to limitations and exclusions of the term and conditions of the award.” Per guidance released through  PRF FAQ's,  entities will be required to include the PRF expenditures and/or lost revenues on their Schedule of Expenditures of Federal Awards (SEFA) for fiscal years ending on or after Jun. 30, 2021. For those entities with fiscal year ends Dec. 31, 2021, through Jun. 29, 2022, entities are required to report on the SEFA the total expenditures and/or lost revenues from both Periods 1 and 2 PRF report submissions to the PRF Reporting portal.

How CohnReznick can help

CohnReznick is prepared to support health centers as they not only work toward compliance but also identify opportunities to enhance revenue maximization. Our team can:

• Identify best practices to track use of Provider Relief Funds and avoid “double-dipping” concerns
• Guide and assist with the preparation or review of the PRF report for Period 2
• Assist in strategic financial planning on how to utilize all Provider Relief Funds and COVID-19-related funding, and maximize full revenue potential
• Educate your team on the compliance and reporting requirements related to Provider Relief Funds and COVID-19-related funding

Contact

Steven D. Schwartz, CPA, Partner

646.254.7484