The Coronavirus Aid, Relief, and Economics Security Act (the “CARES Act”) added an additional $100 billion to the Public Health and Social Services Emergency Fund (the “Relief Fund”) to provide funding to healthcare providers responding to the coronavirus pandemic. Providers who receive more than $150,000 from the Relief Fund (“Recipients”) or from funds provided under certain other COVID-19 legislation are required to submit certain reports to the Secretary of Health and Human Services (the “Secretary”) to ensure compliance with the that are imposed on this payment.
According to the Terms and Conditions, the Secretary will specify the information required for and the form of these reports in future program instructions. The Terms and Conditions, however, contain some guidance about the information that will be required. Among other things, the report must contain “detailed information on any level of sub-contracts or subgrants awarded by the covered recipient or its subcontractors or subgrantees . . .” This information must include the data elements required to comply with the Federal Funding Accountability and Transparency Act of 2006 (the “Transparency Act”) allowing aggregate reporting on awards below $50,000 or to individuals, as prescribed by the Director of the Office of Management and Budget.
The Transparency Act requires a significant amount of information about sub-contracts and sub-grants (collectively, “Sub-awards”) and the entities (the “Sub-awardees”) that receive the payments, including: the Sub-awardee’s name, address, and DUNS number; the amount of the Sub-award; a description of the Sub-award project; and the principal place of performance for the project. The Transparency Act also requires disclosure of the name and total compensation of the Sub-Awardee’s top five executives if that information is not otherwise available through public reports to the SEC or IRS and if, in the prior fiscal year, the Sub-awardee: (1) received 80% or more of its annual gross revenue from federal awards; and (2) had annual gross revenue from federal contracts or grants (including any Sub-awards) of $25 million or more.
The Terms and Conditions also reference several federal regulations that impose requirements on a Recipient’s records system. Under these regulations, the Recipient’s financial management system must allow it to maintain certain documentation, including: identification of all federal awards received; accurate, complete, and current disclosure financial results of each federal award; records that identify adequately the source and application of funds for federally funded activities; and comparisons of expenditures with budget amounts for each award. These regulations also require written procedures for minimizing the time elapsing between the transfer of funds and disbursement and for determining the allowability of costs in accordance with the Terms and Conditions and other applicable federal regulations.
If a provider receives payment and does not wish to comply with these reporting requirements designated by the Terms and Conditions, the provider must contact the Department of Health and Human Services (HHS) within 30 days of receipt of payment and remit the full payment to HHS as instructed.