The provider relief fund single audit requirements have been a source of confusion for healthcare organizations navigating federal compliance obligations. On July 15, 2021, the U.S. Department of Health and Human Services (HHS) released updated guidance clarifying how recipients of Provider Relief Funds should handle single audit reporting, including when and how to include these funds on the Schedule of Expenditures of Federal Awards (SEFA). This article breaks down the key rules, timelines, and distinctions between entity types so your organization can stay compliant.
What HHS announced about provider relief fund single audit exclusions
HHS established that Provider Relief Fund expenditures and lost revenues would be excluded from the scope of single audits for non-federal entities with fiscal years ending between December 31, 2020 and June 29, 2021. This exclusion was a significant relief for organizations that received Provider Relief Funds during the early stages of the pandemic, as it meant those funds would not trigger additional audit requirements for the covered fiscal year-end periods.
The exclusion applied specifically to the single audit scope, meaning auditors were not required to test Provider Relief Fund expenditures as a major program for fiscal years falling within that window. However, this did not eliminate all reporting obligations. Recipients were still expected to maintain adequate records and comply with the terms and conditions of the Provider Relief Fund program.
Understanding this exclusion is critical because it directly affects how audit firms plan their engagements and how recipient organizations prepare their financial statements. Organizations that assumed all Provider Relief Funds were permanently excluded from single audit requirements may face unexpected compliance gaps in later fiscal years.
When provider relief funds must appear on the SEFA
Non-federal entities are required to include Provider Relief Fund expenditures and lost revenues on their SEFA for fiscal year ends (FYEs) on or after June 30, 2021. This is the key transition point: any fiscal year ending before June 30, 2021 falls under the exclusion window, while fiscal years ending on or after that date must report these funds.
For organizations with a December 31 fiscal year end, this means the 2021 calendar year SEFA must include the total expenditures and lost revenues from both the Period 1 and Period 2 report submissions to the Provider Relief Fund Reporting Portal. These amounts reflect what the organization reported to HHS through the portal, and they must be accurately carried over to the SEFA.
The SEFA reporting requirements for Provider Relief Funds follow the same general principles as other federal awards. The funds should be reported under the appropriate Assistance Listing Number (ALN), and the amounts should reconcile with what the organization submitted through the HHS reporting portal. Any discrepancies between the portal submissions and the SEFA could trigger audit findings.
Organizations should also be aware that the timing of SEFA inclusion may affect whether the Provider Relief Fund is tested as a major program during the single audit. The determination of major programs depends on the total federal expenditures reported on the SEFA, so adding Provider Relief Funds to the schedule could push the program above the threshold for testing.
How the $750,000 threshold affects audit requirements
The single audit threshold plays a central role in determining which organizations must undergo an audit of their federal awards. Under the Uniform Guidance (2 CFR 200.501), non-federal entities that expend $750,000 or more in federal awards during a fiscal year are required to have a single audit or program-specific audit performed. Working through that determination is a core part of the audit and assurance services Pease Bell CPAs provides to healthcare and nonprofit clients.
For Provider Relief Fund recipients, this threshold applies to the total federal awards reported on the SEFA, not just the Provider Relief Funds alone. If an organization receives Provider Relief Funds and other federal awards that together exceed $750,000, the organization must have a single audit. If the Provider Relief Funds are the only federal awards and they exceed $750,000, a program-specific audit may be an option.
The $750,000 threshold is cumulative across all federal programs. Organizations that were previously below this threshold may find themselves above it once Provider Relief Funds are included on the SEFA, which could trigger a first-time single audit requirement. This is an important planning consideration, as single audits require specialized expertise and can add significant time and cost to the annual audit process.
One note for current planning: the $750,000 figure was the applicable threshold throughout the Provider Relief Fund reporting periods described here. Under OMB’s 2024 revisions to the Uniform Guidance, the single audit threshold increased to $1,000,000 for fiscal years beginning on or after October 1, 2024. Recipients evaluating obligations for recent or future fiscal years should apply the threshold in effect for the year being audited.
Rules for for-profit entities receiving provider relief funds
HHS guidance released on July 15, 2021 applied specifically to non-federal entities, a category that includes state and local governments, tribal organizations, nonprofit organizations, and institutions of higher education. For-profit entities were not directly addressed in that initial guidance, creating uncertainty about their SEFA reporting obligations.
On July 27, 2021, the AICPA confirmed that the SEFA reporting timeline discussed in the HHS guidance was anticipated to be consistent for all recipients of Provider Relief Funds, including for-profit entities. However, no formal HHS communication had been issued to confirm this alignment at the time.
Regardless of entity type, HHS requires that for-profit entities reporting $750,000 or more in federal award expenditures on their SEFA, including Provider Relief Funds, must obtain either a single audit or a GAGAS financial audit. A GAGAS financial audit, also known as a Generally Accepted Government Auditing Standards audit, is conducted in accordance with the Yellow Book standards issued by the Government Accountability Office. This type of audit includes additional requirements beyond a standard financial statement audit, such as reporting on internal controls and compliance with federal program requirements.
For for-profit entities subject to these requirements, the audits could not be completed until after March 31, 2022, and the submission deadline was September 30, 2022. This extended timeline gave organizations and their auditors additional time to address the unique complexities of Provider Relief Fund compliance.
Key differences between a single audit and a GAGAS financial audit
A single audit under the Uniform Guidance is a comprehensive audit that covers an organization’s financial statements and its compliance with federal award requirements. It includes testing of major programs, reporting on internal controls over compliance, and preparation of a schedule of findings and questioned costs. Single audits are the standard requirement for non-federal entities that expend $750,000 or more in federal awards.
A GAGAS financial audit is narrower in scope. It covers the organization’s financial statements and includes reporting on internal controls and compliance, but it does not require the same level of federal program-specific testing as a single audit. For-profit entities that are not subject to the Uniform Guidance may satisfy their provider relief fund compliance obligations through a GAGAS financial audit rather than a full single audit.
The choice between these two audit types depends on the entity’s classification, the total amount of federal awards expended, and the specific requirements set by HHS. Organizations should consult with their auditors early in the process to determine which type of audit applies to their situation and to ensure adequate time is built into the engagement timeline.
How to report lost revenues on the SEFA
Provider Relief Fund recipients were permitted to apply their funds to both eligible expenditures and lost revenues attributable to the COVID-19 pandemic. Both categories must be included when reporting on the SEFA for applicable fiscal years.
Lost revenues are calculated based on the difference between actual patient care revenues and budgeted patient care revenues for the applicable reporting period. The methodology for calculating lost revenues was defined by HHS and applied through the Provider Relief Fund Reporting Portal. Recipients should use the same figures they reported to HHS when preparing their SEFA.
It is important to note that the reporting periods reflected on the SEFA depend on the fiscal year end. Organizations with fiscal years ending from June 30, 2021 through December 30, 2021 report the total expenditures and lost revenues from the Period 1 portal submission, while those with fiscal years ending December 31, 2021 through June 29, 2022 report both Period 1 and Period 2 submissions. Double-counting or omitting amounts from either reporting period could result in audit findings or compliance issues.
Steps to prepare for your provider relief fund single audit
Organizations that have not yet undergone a provider relief fund single audit should take several steps to prepare. First, confirm the total amounts reported through the Provider Relief Fund Reporting Portal for each applicable reporting period. These amounts will form the basis of the SEFA entry.
Second, determine whether the organization exceeds the $750,000 threshold for federal award expenditures. If so, identify whether a single audit or GAGAS financial audit is required based on the entity type.
Third, gather supporting documentation for all Provider Relief Fund expenditures and lost revenue calculations. Auditors will need to verify that the amounts reported on the SEFA are consistent with the portal submissions and that the underlying calculations comply with HHS guidance.
Finally, engage your audit firm early. Provider Relief Fund audits involve specialized knowledge of federal compliance requirements, and firms with experience in this area can help identify potential issues before they become audit findings. For operators in the skilled nursing and long-term care sector, this expertise is especially valuable given the volume of federal funding flowing through the industry.
Frequently Asked Questions
What are the single audit requirements for provider relief fund recipients?
Non-federal entities that expend $750,000 or more in federal awards, including Provider Relief Funds, must have a single audit performed in accordance with the Uniform Guidance (2 CFR Part 200). For-profit entities meeting the same threshold must obtain either a single audit or a GAGAS financial audit. The specific requirements depend on the entity type and the fiscal year end.
When do provider relief funds need to be reported on the SEFA?
Provider Relief Fund expenditures and lost revenues must be included on the SEFA for fiscal year ends on or after June 30, 2021. Fiscal years ending between December 31, 2020 and June 29, 2021 are excluded from the single audit scope for these funds, though basic SEFA reporting may still apply depending on organizational circumstances.
Do for-profit entities need a single audit for provider relief funds?
For-profit entities that report $750,000 or more in federal award expenditures on their SEFA must obtain either a single audit or a GAGAS financial audit. The AICPA confirmed that the SEFA reporting timeline is expected to be consistent across all entity types, though HHS had not issued formal confirmation for for-profit entities at the time of the original guidance.
What is the $750,000 threshold for provider relief fund audits?
The $750,000 threshold refers to total federal award expenditures reported on the SEFA during a fiscal year, not just Provider Relief Funds alone. If an organization’s combined federal awards, including Provider Relief Funds, equal or exceed $750,000, the organization is subject to single audit or GAGAS audit requirements.
What is the difference between a single audit and a GAGAS financial audit?
A single audit is a comprehensive audit covering financial statements and federal award compliance, including major program testing and a schedule of findings. A GAGAS financial audit covers financial statements with additional reporting on internal controls and compliance but does not include the federal program-specific testing required in a single audit. For-profit entities may use a GAGAS audit to satisfy their provider relief fund compliance obligations.
How should lost revenues be reported on the SEFA for provider relief funds?
Lost revenues should be included alongside eligible expenditures when reporting Provider Relief Funds on the SEFA. The amounts must match what the organization reported through the HHS Provider Relief Fund Reporting Portal. The specific reporting periods reflected on the SEFA depend on the fiscal year end: organizations with fiscal years ending from June 30, 2021 through December 30, 2021 report Period 1 amounts, while those with fiscal years ending December 31, 2021 through June 29, 2022 report both Period 1 and Period 2 amounts.
