As most will recall, several adult cares homes were selected for audit regarding their use of the Kansas SPARK funds, which were distributed to providers in the Fall of 2020 by the State of Kansas. The original source of these funds is the Federal Coronavirus Relief Fund. The SPARK funds are different from the Provider Relief Funds, which were disbursed directly to providers from the U.S. Department of Health & Human Services through the Health Resources and Services Administration.
The criteria for allowable uses of the SPARK funds are different than that of the Provider Relief Funds (for example, lost revenue is not an allowable use of the SPARK Funds). The providers who were selected for the SPARK fund audits can expect to receive their audit results in the next several weeks.
More providers could potentially be selected for future SPARK fund audits, and we have the following important recommendations to pass along –
- Make sure you have identified the allowable expenses that were paid for with SPARK funds. These expenses need to be different from the expenses you have identified as reimbursed by Provider Relief Funds. This analysis must be performed. This could become an issue if you are selected for a SPARK fund audit, OR, an audit of the Provider Relief Funds.
- Ensure your business office has retained supporting detail for these expenses (including purchase orders, invoices, internal memos, calculation detail, emails, etc.) Presumably, an expense that is unsupported will be disallowed, and if you cannot demonstrate full usage of the funds, the government may seek recoupment. For context, the providers who were selected for the SPARK audits were required to provide support for 100% of the expenses that were funded by the SPARK funds.
If you have any questions, please do not hesitate to contact LeadingAge Kansas, or Kailey Riskowski at kriskowski@blandcpa.com.
