The U.S. Department of Health and Human Services (HHS) established several new funding sources to support healthcare entities in their response to the coronavirus pandemic. One such source is the Provider Relief Fund (PRF), for which HHS allocated $178 billion to be distributed to prevent, prepare for and respond to COVID-19, and as of the end of July 2021, over $118 billion has already been paid out to eligible providers.

After months of uncertainty and changing guidelines on the use and reporting of PRF, HHS released an updated version of the Post-Payment Reporting Requirements for recipients of these funds on June 11, 2021. In addition, HHS maintains an up-to-date Frequently Asked Questions resource on its website for all PRF-related terms and conditions.

While providers are getting ready to report on the use of payments from first-period distributions, there are three key items they should consider to maximize the use of the funds and correctly report on their use for purposes of the single audit.

1. Regardless of when the PRF payment was received, providers can charge qualifying expenses or lost revenues dating all the way back to Jan. 1, 2020.

While it is hard to imagine that significant qualifying expenses related to coronavirus were incurred in January 2020 (due to the timing of the virus spread in the U.S. and the related activity in response to the pandemic by U.S. providers), the key point here is that expenses could be charged to the PRF funding prior to the date it was paid. The following summary outlines the applicable periods when funds are allowed to be used, based on the date of the receipt:






April 10, 2020 to June 30, 2020

Jan. 1, 2020 to June 30, 2021

July 1, 2021 to Sept. 30, 2021


July 1, 2020 to Dec. 31, 2020

Jan. 1, 2020 to Dec. 31, 2021

Jan. 1, 2022 to March 31, 2022


Jan. 1, 2021 to June 30, 2021

Jan. 1, 2020 to June 30, 2022

July 1, 2022 to Sept. 30, 2022


July 1, 2021 to Dec. 31, 2021

Jan. 1, 2020 to Dec. 31, 2022

Jan. 1, 2023 to March 31, 2023

HHS clarified that these extended periods would apply as long as the same expenses are not claimed against payments from multiple periods.

2. The extended timeline above for periods 2 through 4 allows providers to strategically plan for the future and consider additional expenditures and investments they can make in the coming months.

Depending on the timing of when providers received the funds, they might not have eligible expenses or lost revenues to claim for the period prior to the funds receipt as many nonprofit organizations quickly pivoted when the pandemic started and decreased their discretionary spending and received significant additional governmental and private support. However, they can instead consider what additional expenditures they might have in the coming months related to coronavirus that would not be covered by other sources. Such qualifying expenses may also include capital expenditures as long as providers can justify that the expenditures were made to prevent, prepare for and respond to coronavirus. HHS provided several examples listed below, and this list is not all-inclusive:

  1. Upgrading a heating, ventilation, and air conditioning (HVAC) system to support negative pressure units
  2. Retrofitting a COVID-19 unit
  3. Enhancing or reconfiguring ICU capabilities
  4. Leasing or purchasing a temporary structure to screen and/or treat patients
  5. Leasing a permanent facility to increase hospital or nursing home capacity

3. The final key takeaway is that the spending of PRF funding will not necessarily be consistent with when the related expenditures/lost revenues are reported on the Schedule of Expenditures of Federal Awards (SEFA).

HHS made it clear early on that the PRF funding will be subject to a single audit, and in July 2021, it updated the PRF SEFA reporting guidelines, stating that nonprofit providers will mirror reporting of expenditures on the SEFA with the report submissions to the PRF Reporting Portal. Refer to the table below for the summary of the reporting timelines:



June 30, 2021 through Dec. 30, 2021

Expenditures and lost revenues from the Period 1 submission

Dec. 31, 2021 through June 29, 2022

Expenditures and lost revenues from the Period 1 and Period 2 submissions

June 30, 2022

Pending guidance for Period 3 and 4 submissions

As a result, nonprofits that received PRF will most likely have a difference in when the revenue is recognized and the related reporting of expenditures on the SEFA. Revenue recognition for PRF funding follows the contribution recognition guidance under FASB ASC 958-605, whereby conditional contributions are recognized when the related conditions are substantially met or, in this case, qualifying expenditures or lost revenues are incurred. As an example, a nonprofit with a fiscal year-end in June receiving and spending PRF funding in April 2020 would have recognized the related revenue during the year ended June 30, 2020 but would not report the related expenditures on its SEFA until the fiscal year ended June 30, 2021. As a result, nonprofits will need to include a reconciliation of expenditures reported on the SEFA to revenue recognized as disclosed in the notes to the SEFA.


While granting significant relief to many nonprofit healthcare entities, PRF funding comes with a long list of terms and conditions, navigating which and maximizing the use of the funds can be a challenge. As GHJ learns more and more about the funds and how they are being utilized by nonprofits, GHJ’s Nonprofit Team will continue sharing best practices and tips, so be on the lookout for the next blog in the PRF series. For more information or best practices, contact the GHJ Nonprofit Practice here.

Murzaeva Yuliya seated

Yulia Murzaeva

Yulia Murzaeva, CPA, CIA, exclusively serves nonprofit organizations and provides audit and consulting services to a wide range of clients with an emphasis on GHJ’s arts and culture, clinics and healthcare and social service subniches. Yulia is the audit quality control lead at the Firm and…Learn More