Reporting on Use of Bonus Funds Due to DHS in Less than Two Weeks

Posted on March 24, 2022 by Jeff Bostic

Back in January, DHS distributed $50 million in American Rescue Plan funding to care centers to provide hiring and retention bonuses to staff. Reporting on the use of the funds is due to DHS by end of day on Monday April 4.

Before completing the report on use of funds care centers should review the guidance on use of the bonus funds. Care centers that do not submit their report by the deadline may have their grant funds recovered by DHS.

Because the grants are one-time money and not intended to be part of future rates, the reporting of bonuses is done by cost report line item and will become offsets when rates are set for 2024. DHS is requiring that facilities submit payroll information along with the reporting form to show the exact amount that went to each individual and the date.

Care centers are allowed to accrue the bonuses for up to three months beyond April 4, but they must be reported on the form due April 4 and providers must provide detail about what bonuses are obligated to which employees and when they will be paid. If a bonus is not paid to a particular employee, for example because they leave before the bonus payment date, those funds will be recovered by DHS and cannot be transferred to another employee. When bonuses are paid after April 4 providers must submit payroll records to DHS showing the bonuses were paid.

The amount of grant funds spent reported to DHS is to match exactly the amount received by the care center, which means there is some risk to accruing bonuses beyond April 4. Providers also clearly do not want to overreport the bonuses provided, even if they did spend more on bonuses than they received, because of the offsets on the future rate.

Finally, DHS is asking care centers to report on the use of the 10% of the grant funds that were unrestricted and to report their use by a cost report line item. Because those funds were unrestricted and no guidance was given for their use, combined with the cost report offsets because they are one-time funds, care centers will be best off reporting that they used these funds in areas with no direct rate impact, such as debt payments or utility costs.