Florida Rural Health Transformation Program Compliance: What Awardees Need to Know Now

Florida Rural Health Transformation Program (RHTP) compliance should be built into operations before the first dollar is spent or drawn. Florida announced nearly $188 million in awards spanning more than 80 grants on August 11, 2026. With Year 1 funds required to be fully expended by September 30, 2027, recipients that wait to establish grant controls may find themselves reconstructing documentation later.

Separate What’s Settled From What’s Still in Draft

RHTP funds are federal financial assistance, and Florida subawards are subject to applicable requirements under the Uniform Guidance at 2 CFR Part 200, HHS-specific requirements and the terms of each AHCA award. Several program rules are already established, regardless of what additional guidance may be released. The Centers for Medicare & Medicaid Services (CMS), part of the U.S. Department of Health and Human Services, has also published RHTP reporting and post-award guidance, although much of that guidance is written primarily for states rather than their individual subrecipients.

CMS post-award guidance requires states to limit federal drawdowns to their immediate cash needs and generally disburse those funds within three business days. Subawardees should follow the payment and cash-management requirements in their AHCA awards and maintain documentation showing when grant funds are received and spent. CMS also limits the ability to shift funds between approved budget line items: subrecipients cannot independently make those changes and must obtain approval from the state, which notifies CMS or seeks federal approval when required.

The 10% administrative cap has some flexibility at the subrecipient level. CMS’s September 2026 FAQ allows a state to permit a subrecipient’s administrative rate to exceed 10% of its individual award, provided total administrative costs incurred by the state and its subrecipients remain at or below 10% of the state’s overall award. Florida awardees still need to follow any administrative-cost limit or allocation included in their specific RFA and AHCA award.

Award terms also generally flow down to subrecipients, including applicable quarterly and annual reporting requirements.

Know Where Florida Goes Further Than CMS

Federal rules already place significant limits on how RHTP funds can be used. CMS prohibits using RHTP funds for clinician salaries, including salaries for allied health professionals, behavioral health providers, community health workers, clinical support staff and EMTs. Florida’s guidance applies those same restrictions to its subawards, including medical director salaries.

Florida goes further in at least one important area: direct patient care. AHCA has stated that Florida RHTP funds may not be used to pay for clinical encounters, procedures or patient bills, even for uninsured or underinsured patients. Awardees should therefore distinguish carefully between allowable investments in rural health infrastructure, workforce development and care-delivery capacity and costs that directly reimburse patient services.

The state’s universally unallowable list also includes new construction, vehicle purchases, pre-award costs, supplanting existing funding and profit to any recipient. Commercial awardees should read that last item carefully: RHTP funds may reimburse allowable costs, but they cannot include a profit component.

Awardees planning to replace an existing electronic medical record (EMR) system also need to watch the program’s 5% funding cap. When a certified EMR was already in place as of September 1, 2025, Florida applies that limit to the subrecipient’s total award for the applicable budget period. Minor renovations or alterations require similar caution: they must be tied to program goals and receive required approval before funds are committed. Because the federal 20% renovation limitation is measured at the state-recipient level, awardees should follow the amount and scope specifically approved in their AHCA award rather than assuming they can independently spend up to 20% of their individual award on renovations

Match Your Audit Plan to Your Entity Type

Audit exposure depends on how an awardee is organized. Nonprofits and other entities subject to Uniform Guidance Subpart F that expend $1 million or more in federal awards during a fiscal year cross the single audit threshold and may be subject to testing of internal controls and compliance requirements. Federal expenditures from one multimillion-dollar RHTP subaward can be enough to cross that threshold within a single fiscal year.

For-profit awardees follow a different path. Uniform Guidance Subpart F does not automatically apply to for-profit subrecipients in the same manner as it does to nonprofits and governments. Under federal rules, the pass-through entity is responsible for establishing the audit requirements necessary to ensure compliance, while HHS audit rules identify two potential audit approaches for for-profit organizations receiving HHS awards:

For-profit organizations below the applicable audit threshold may be exempt from the HHS audit requirement for that year, but their records must remain available for review by appropriate federal or pass-through officials.

Because AHCA is the pass-through entity for Florida’s RHTP subawards, the executed subaward is critical in determining the audit requirements applicable to a for-profit recipient.

Commercial awardees should confirm the required audit approach before they engage an auditor.

Build the Accounting Infrastructure Before the First Draw

RHTP compliance starts in the general ledger, long before an auditor arrives. Awardees should set up their accounting systems to tag every RHTP expenditure by initiative, cost category and budget period. Without that coding, tracking against the approved budget, administrative cap and other funding limitations can quickly turn into guesswork. CMS specifically expects financial systems to track the purpose and source of expenditures and the budget period in which costs were incurred.

Personnel documentation deserves the same priority. Florida’s FAQ requires time-tracking consistent with 2 CFR 200.430 for administrative and project management staff charged to the grant. Employees who split their time between RHTP and other activities should have their costs allocated based on records that accurately reflect the work performed, with only the portion attributable to the grant charged to RHTP.

Nonprofit and governmental recipients should maintain a running Schedule of Expenditures of Federal Awards and reconcile RHTP activity regularly. For-profit recipients should similarly maintain a detailed schedule of RHTP and other applicable federal award expenditures so they can evaluate their audit requirements and support any required audit. Organizations without grant accounting capacity in-house can bring in outsourced accounting support to build these systems before grant activity accelerates.

The program is organized into five budget periods through October 30, 2030, and continuation funding beyond Year 1 depends on satisfactory performance, CMS approval of Florida’s annual continuation funding and continued availability of federal funds.

Prepare for Final RHTP Guidance Without Pausing Compliance

Additional CMS and AHCA guidance may refine reporting and implementation requirements, but the core cost principles, funding limitations, documentation expectations and award-specific requirements already apply to Florida awardees. Controls built now will help recipients support Year 1 spending and provide a foundation for each budget period that follows.

The James Moore team helps rural health organizations build grant accounting systems that stand up to federal scrutiny. Contact us when you’re ready to put your RHTP controls in place.

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