If your organization has a fiscal year-end of 6/30/21, here are a few points to be aware of regarding when to include Provider Relief Funds (PRF) on your SEFA and when to report it as income.
- PRF monies received during “Period 1” (which is monies received from 4/1/20- 6/30/20) has a deadline to use the funds by 6/30/21 and a requirement to submit the report through the HHS portal for the use of these Period 1 funds between 7/1/21 and 9/30/21. These amounts are to be reported on your FY ’21 Schedule of Federal Expenditures (SEFA), even though the funds may have been applied to expenses and/or lost revenue prior to 7/1/20.
- Similar to the above, PRF monies received during “Period 2” (which is monies received from 7/1/20-12/31/20) has a deadline to use the funds by 12/31/21 and a requirement to submit the report through the HHS portal for the use of these Period 2 funds between 1/1/22 and 3/31/22. These amounts are to be reported on your FY ’22 SEFA, even though the funds may have been applied to expenses and/or lost revenue prior to 7/1/21.
- So, if you didn’t receive any PRF monies during Period 1, this also means that none of your PRF monies received from 7/1/20- 6/30/21 would be reported on the FY ’21 SEFA. This is because the earliest date you can submit the amounts for this time period through the portal is 1/1/22, and the auditors are required to match the portal submission to the SEFA amount as part of audit procedures. This timing requirement is to align these required audit procedures with the SEFA reporting.
- The SEFA reporting will be different for this situation than GAAP reporting for financial statement purposes. Regardless of the SEFA timing rules for PRF, you’ll be required to follow GAAP for financial statement purposes. PRF monies would follow the nonprofit accounting guidance for conditional contributions, where the conditions are met (and therefore contribution income is recognized) as the eligible expenses are incurred (and the expenses are not reimbursed by any other source) or as the lost revenues are incurred.
As you can see from the above points, it’s very important to understand the timing requirements relating to PRF and the related SEFA reporting.
Colette Kamps, CPA