PRF Audit Pricing: What Healthcare Entities Need to Know
The Provider Relief Fund (“PRF”) was created to reimburse healthcare providers for eligible healthcare related expenditures and lost revenues. The PRF distributions were made available through the CARES Act and are administered by the Department of Health and Human Services (“HHS”). Healthcare entities that received greater than $750,000 of HHS awards during their fiscal year will be subject to an audit as described in the previously published article, PRF Audit and Reporting Update.
There are two audit options for healthcare entities to consider. In my PRF audit article series, I shared insights into the pros and cons of the PRF Single Audit option and the Financial Audit option to assist you in determining which audit will work best for your needs.
Another frequently asked question I receive from healthcare entities is “How much will a PRF audit cost?” Included below is information to assist you in understanding the scope of PRF audit services and the fee ranges.
PRF Financial Audit Option: Scope and Estimated Cost
- A full financial statement audit is not required. The healthcare entity is required to present a schedule of a specific element of a financial statement in accordance with AU-C section 805, Special Considerations – Audits of Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement.
- The external auditor will provide a report on internal controls; however, the report is not an opinion over internal controls and specific testing of internal controls is not required.
- The cost of a financial audit is expected to be less than a PRF single audit due to the limited scope of the engagement.
- The cost for a PRF financial audit can range $15,000-$25,000.
PRF Single Audit Option: Scope and Estimated Cost
- The PRF single audit is a universal audit of both financial and non-financial information. If an entity has not received an audit in previous years, it will require the auditor to consider opening balance sheet accounts. A financial statement audit would be in accordance with the basis of accounting used by the healthcare entity and generally would include a balance sheet, statement operations and retained earnings, and cashflow statement.
- The audit will encompass a compliance audit component and the external auditor will be required to provide an opinion on internal controls.
- Management will be required to produce a Schedule of Expenditures of Federal Awards and understand the compliance standards associated with producing this report.
- The costs for a single audit option may be costlier due the requirement to perform a financial statement and compliance audit.
- The cost for a PRF single audit can range $25,000-$50,000.
- Note – A PRF single audit is not the same in scope as a not-for-profit single audit. The estimated cost for a not-for-profit single audit will likely differ from a PRF single audit.
Reminder: PRF Audit Due Dates
Audits for both Period 1 and Period 2 PRF distributions are due the earlier of 30 days after the audit issuance date or 9 months after the healthcare entities year-end.
Once you have selected the audit option that best fits your company’s needs and budget, we encourage you to begin preparing for the audit requirement immediately. To assist with these efforts, download our complimentary checklist.
About the Author
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.