The Pros and Cons of College Mergers & Acquisitions

The Pros and Cons of College Mergers & Acquisitions

With growing frequency, colleges and universities across the U.S. are turning to mergers and acquisitions to address fiscal challenges, low enrollment, a shrinking population, tough competition, stagnant state funding, a shift to online learning, and more. A 2020 survey of college and university presidents showed more than 16% explored a merger or acquisition the prior year (the percentage is likely higher, but not reported due to confidentiality). While mergers and acquisitions may not be right for every institute of higher education, the associated pros and cons warrant consideration.

Data from the National Center for Education Statistics shows the higher education industry continues to shrink, even before the anticipated demographic cliff hits in 2025. (Learn more about college and university closings, mergers, and acquisitions by state using Higher Ed Dive’s tracking tool.)  This has a profound impact on costs, revenue, alumni relations, and future planning.

College closings and mergers by state
Each state is colored by how many of its public and private nonprofit colleges have closed or merged, or have announced plans to, since 2016. Click on a state to filter the list.

College Closings and Mergers

So, what factors are enticing so many college presidents and boards of trustees to consider a merger or acquisition?

Mergers and acquisitions can can offer efficiencies and economies of scale, allowing for shared services, campuses, affiliations, partnerships, and branding, as well as staff redeployment. They can help promote growth, by expanding degree and class offerings, entering new markets, and filling new/emerging needs in the local community and society overall (i.e., technical training for manufacturing and construction). There’s also opportunity to increase value for students and prospects while improving competitiveness for the institution(s), as a result of greater brand recognition, an expanded alumni base, broader internships and job placement opportunities, enhanced technology, increased networking potential, and more.

What’s more, mergers and acquisitions can help a college or institution expand its geographic footprint inside the U.S. and out. Plus, they enable fast acquisition of offerings, infrastructure, technology, and facilities by employing a “buy” rather than a “build” strategy.

On the other hand, there are some downsides to consider. Research suggests mergers and acquisitions lead to tuition and fee increases of five to seven percent. Although there are initial savings achieved through economies of scale (no need for duplicate staff or duplicate facilities and equipment), this represents one-time savings versus ongoing.

There’s also concern that mergers and acquisitions can lead to the potential loss of an institution’s identity and in-person learning, as well as enrollment. Alternative curriculum or approaches to education that give students options based on the way they learn may suffer. It’s like replacing a local establishment with a big box store. If students or prospects believe a merger or acquisition is being driven primarily by an institution’s financial issues, there can be a negative impact on applications and income.

Mergers and acquisitions of higher education institutions have unique challenges that aren’t shared by the corporate world. Accrediting bodies, faculty and alumni can all have an impact, as can national, state, and local governments. According to Statista, almost 79 percent of higher education spending comes from private sources like alumni who, at times, have led to a merger being called off.

As is the case for many industries, the COVID pandemic and ensuing changes (i.e., the unprecedented adoption of online learning) are facilitating disruption in higher education. As leadership of these institutions chart their paths forward, consideration of the pros and cons of mergers and acquisitions should be part of their planning. As noted by the Teachers Insurance and Annuity Association of America (TIAA), “Rather than a last resort, mergers and acquisitions can be part of a proactive strategy to help realize institute of higher education missions.”

If you need help understanding the tax and accounting implications of mergers and acquisitions, call RBT CPAs. We’re also available to handle all your tax and accounting needs, so you can focus on what’s important to your institution – learning and the future.

Getting Clarity on New York Marijuana Laws

On March 31, 2021, New York State approved the Marijuana Regulation and Taxation Act (MRTA), making adult use of cannabis legal in the state. In October, the New York Department of Labor issued new guidance on adult cannabis use and the workplace, which covers all New York state employers. Here are some highlights…

As reported by the National Law Review, under NY Labor Law 201-D, “Employers cannot discriminate against employees over the age of 21 based on their use of marijuana provided it takes place outside the workplace, outside working hours, and when not using the employer’s equipment or property.”

Does this mean employers can’t have policies against using marijuana? No. An employer can prohibit its use at work, during meal and rest breaks, and when an employee is on call. What’s more, employers can prohibit marijuana possession on company property, including company vehicles. Finally, employers can take action against an employee if his/her use of marijuana outside of work impairs the employee’s ability to perform job duties or interferes with an employer providing a safe work environment.

What’s still a little fuzzy is how an employer can prove impairment, since it will be based on objectively articulable indications (not the very limited instances when a drug test can be used or the smell of marijuana on a person) and could actually uncover a disability. For example, let’s say an employee operates a heavy machine in an unsafe and reckless manner. It may be an articulable symptom of impairment under the law; it could also be due to a protected disability, triggering the process to determine if an accommodation is needed and can be provided.

In New York, an employer:

  • Cannot test for it unless required by federal law; an employee is impaired while working and articulable symptoms interfere with the employer’s ability to provide a safe and healthy workplace per state and federal safety laws; or it would result in loss of a federal contract or funding.
  • Can test for it when federal or state law makes drug testing a mandatory condition of an employee’s position (i.e., drivers of commercial motor vehicles or for-hire vehicle motor carriers).
  • Can take employment action (but doesn’t have to) if an employee is found to have used marijuana at work.

There are still some hazy areas, like New York’s Scaffold Law which puts liability for gravity-related worksite injuries on the construction company or project owner. The jury’s still out on how this will  play out. Unfortunately, it may take some court cases to bring that level of clarity.

In the meantime, employers should:

  • Review/update related policies to ensure they’re in
  • Identify objectively articulable impairment signals and train managers and supervisors what they are and how to spot them.
  • Educate employees on marijuana use policy.

For assistance or answers to questions, contact New York’s Office of Cannabis Management or consult with a legal advisor.

While RBT CPAs can’t provide legal advice related to the NYS marijuana laws, we can help with your tax and accounting needs. Click here to get started.

Artificial Intelligence: The Next Frontier in Manufacturing

Artificial Intelligence: The Next Frontier in Manufacturing

Artificial Intelligence (AI) represents the next frontier in manufacturing. Is your company ready to get on board?

While the majority of  manufacturers globally already embrace some form of AI, almost 40% don’t.  This means there is still a lot of opportunity for organizations to drive efficiency, reduce downtime, and deliver high quality products with AI. Jumping on the AI bandwagon becomes even more important as reshoring picks up speed. As companies bring manufacturing back to the U.S., AI may very well be the key to winning employees, customers, market share, and more.

So, what exactly is AI?

According to Capgemini, “Artificial intelligence (AI) is a collective term for the capabilities shown by learning systems that are perceived by humans as representing intelligence.” Capabilities can include speech, language processing, smart automation, enhanced creativity, image and video recognition, conversational agents, prescriptive modeling, advanced simulation, analytics, predictions, and more. When it comes to manufacturing, AI appears largely in the form of machine learning (where algorithms and code use data to learn); deep learning (an advanced form of machine learning); and autonomous objects (like a robot or vehicle that can complete a task on their own).

More than just a one-off solution, companies are transforming their entire manufacturing operations with AI. This is logical following digital transformation, according to AIMultiple, which notes “After a company adopts digital processes, the next step is to improve the intelligence of those processes.”

Manufacturing operations are using AI to help maintain systems by identifying product or equipment failures in advance to prevent breakdowns; promote the quality of products by identifying issues early; forecast demands for products and pricing; and manage inventory based on demand and supply. As a result, downtime is decreased, costs are lowered, time to market is maintained, productivity and quality are improved; there’s greater speed and visibility across the supply chain; and inventory management is optimized – but the advantages AI affords don’t end there.

According to Manufacturing Tomorrow, AI makes customization affordable and within reach of more manufacturers. It also takes smart manufacturing to a whole new level, by monitoring parameters and making adjustments in real-time to promote quality and save time from costly breakdowns. AI can help optimize the flow of goods via the supply chain to minimize waste and delays. It also offers cyber security protections by protecting systems and operations from unwanted infiltration, while enhancing productivity and sustainability.

Is there anything AI can’t do?

While it cannot fill the talent shortage or decrease the tremendous competition for employees in today’s job market, it does replace the need for employees to complete repetitive tasks with more attractive prospects for job seekers looking to use higher end skills operating and maintaining cutting edge AI technology.

AI is touching every part of the manufacturing process, from product design to delivery, with the projected market reaching $16.7 billion in 2026.  While AI in manufacturing is growing in the U.S. (28% of manufacturing operations have at least one use), it still has a way to go to catch up with Germany (with 69% of manufacturing operations implementing AI) and Japan (30%). This opens a lot of opportunities to U.S. manufacturers looking to get on board the next frontier with AI.

While you’re exploring what’s next for your manufacturing operations, you can trust RBT CPAs to know what’s next in everything related to accounting and taxes. Let us do what we do best so you can focus on what you do best. Contact us today.

Clamping Down on Anti-Competitive Behavior in Healthcare

Clamping Down on Anti-Competitive Behavior in Healthcare

Last July, President Biden issued Executive Order 14036 to promote competition (and eliminate anti-competitive practices) across a number of industries, including health care, with the hopes of lowering prices, increasing growth and wages, and promoting innovation. The order includes 72 initiatives, including four specifically focused on health care.

In this post, we explore what has happened since the executive order was issued and what’s expected to happen next in relation to the health care initiatives.

Lowering prescription drug costs

Two months after the executive order was issued, the Department of Health and Human Services (HHS) released, “A Comprehensive Plan for Addressing High Drug Prices.” A recent Congressional Budget Office report on prescription drug costs and spending indicate cost increases are slowing but that’s only after seeing spending increase from $30 million in 1980 to $335 million in 2018.

In 2021, 20 states enacted 43 laws to lower costs that included establishing Prescription Drug Affordability Boards (PDABs); regulating Pharmacy Benefit Managers (PBMs); limiting out-of-pocket  insulin costs; and promoting cost transparency. According to the National Conference of State Legislators Bill Tracking Database, New York State introduced 69 bills related to lowering prescription drug costs last year; another 20 have been introduced since the start of this year.

Allow hearing aids to be sold at drug stores

The Food and Drug Administration (FDA) proposed a rule creating a category of hearing aids that could be sold over-the-counter at drug stores without a prescription. The rule was up for public comment during a 90-day period ending January 18 of this year.  According to Harvard Health, approval is expected some time this year and manufacturers are already moving ahead with production that will give consumers access to a $600 on-average device (versus the $5,000 average at a doctor’s office).

Still, 42 states are asking that as part of the rule the FDA preserves related state consumer protection laws. At the same time, the Federal Trade Commission  indicates that, in part, some of those laws hurt competition and access to affordable hearing aids. Several governors are asking that the FDA finalize the rule without delay. 

Stop the negative impacts of healthcare industry consolidation

The Justice Department and Federal Trade Commission (FTC) are encouraged to review merger guidelines to ensure patients are not harmed by hospital mergers, which have traditionally driven up prices and left rural areas without adequate access to care. As a first step, the FTC restored a policy where it could restrict two merging parties from moving forward if it would have anti-competitive impacts on the community. Courts seem to align with this position. However, the American Hospital Association disagrees, asserting current practices actually boost competition and help the economy. Also, a study by the American Medical Association shows mergers actually result in better patient outcomes – something the medical community asserts the political establishment is ignoring.  The FTC is currently soliciting public comments on the issue. So, stay tuned.

Address surprise bills from hospitals

Even before President Biden’s executive order, actions were underway to promote hospital price transparency and eliminate surprise bills for care. This past January 1, new rules took effect under the No Surprises Act requiring uninsured patients receive good faith estimates for the cost of care and insured patients don’t receive surprise bills for emergency care and treatment by an out-of-network provider at an in-network facility.

What’s more, with the Consolidated Appropriations Act of 2021, health plans and health plan issuers are required to track and submit certain prescription drug and health care costs starting December of 2022 (for 2020 and 2021 data) and every June thereafter to help promote price transparency.

Going forward

For decades, addressing escalating health care costs in the U.S. has been the focus of legislation, corporate board rooms, and individuals, and it looks like it’s going to remain a hot topic with both the FTC and the HHS identifying actions related to Executive Order 14036 a priority for 2022.

We’ll keep you updated as the story continues to unfold. In the meantime, RBT CPAs does have staff specializing in accounting and taxes for health care. Should you need advice or assistance, please give us a call.

NOTE: RBT CPAs is an accounting and tax firm – not a law firm. In no way should information in this article be construed as legal advice or direction. For that type of assistance, we encourage you to contact your legal advisor.

The Border Crisis in Our Backyard

The Border Crisis in Our Backyard

When we think about the crisis at the border, images from Texas come to mind.

Actually, the crisis is a lot closer than that. Last year, media coverage about middle-of-the-night flights to New York airports drew attention to the fact that the crisis touches communities throughout the U.S., including the Hudson Valley. In this post, we explore how immigrant children make their way to the Hudson Valley, why, and the effects on local communities and school districts.

Among the masses crossing the boarder are unaccompanied children.

According to Pew Research, there were over 144,000 in 2021. While awaiting immigration proceedings, the Office of Refugee Resettlement (ORR) is required by Federal law to feed, shelter, and care for these minors until they can be released to safe settings with sponsors. About 85% are released to sponsors – usually family – while  others enter foster care or are taken in by charities across the U.S.  Sponsors must provide for a child’s physical and mental well-being.  Because of trafficking, abuse, violence and smuggling, policies protect the children’s identities and locations.

Between October 1, 2020 and August 31, 2021, unaccompanied children transported and released to sponsors across the Hudson Valley include 282 in Orange County; 553 in Rockland County; 570 in Westchester County; 73 in Putnam County; 109 in Dutchess County; and 80 in Ulster County.  Does that mean the local school districts had to absorb the increase in enrollment and educational needs? In a word, yes.

As reported by the U.S. Department of Health & Human Services, “When unaccompanied children are released to an appropriate sponsor, while awaiting immigration proceedings, they have a right — just like other children living in their community — to enroll in local schools regardless of their or their sponsors’ actual or perceived immigration or citizenship status. State laws also require children to attend school up to a certain age.”

While no one can deny the heartbreak felt for unaccompanied children, there are also concerns about the impact on local communities and schools. Some of the children have learning disabilities, can’t speak English, and don’t know Spanish. They may not have attended school before. Although young, there are concerns about potential gang affiliations, violence, and drugs. All of this can put additional stress on a district’s finances, staff, programs, and performance.

The DOE lists these resources that may be helpful for communities enrolling immigrant children:

  • Services for Educationally Disadvantaged Children (Title I):Title I, Part A of the Elementary and Secondary Education Act (ESEA) provides funds to drive achievement of children at high-poverty schools. Newly arrived immigrant children attending Title I schools, may be eligible to receive Title I, Part A services. For more information, click here.
  • Individuals with Disabilities Education Act (IDEA):IDEA funds may be used to evaluate children suspected of having a disability. If a child is found to have a disability, funds may be used to provide special education and related services. For more information, click here.
  • English Language Acquisition Programs:Up to 15% of a state’s Title III funds under the ESEA must be set aside for subgrants to local education agencies with a significant increase in immigrant students to be used for improving instruction, providing tutoring and intensified instruction, and conducting community participation programs. If a state previously reserved a lesser amount, it can increase that amount for next year’s subgrants. Click here and here for more information.
  • McKinney-Vento Act:Children who live with sponsor family members in “doubled-up” housing (i.e., sharing the housing of other persons due to economic hardship or a similar reason) may be eligible for services under the act. Eligibility information is here. Information about rights and services is here.
  • Migrant Education Programs (MEP):MEP provides education and support services to children who are migratory agricultural workers or fishers. Newly arrived immigrant children may qualify, as determined on a case-by-case basis. Additional information is available here.
  • National Clearinghouse for English Language Acquisition:This Clearinghouse provides non-monetary aide in academic language development and models to serve recently arrived immigrant students and English language learners. Additional information is here.

If you have questions, refer to these DOE Resources: Fact Sheet and Fact Sheet II: Enrolling New Immigrant Students. For additional information, please call the U.S. Department of Education  at 1-800-USA-LEARN. Finally, if you know any sponsors or unaccompanied children who could use assistance, here’s A Guide to Resources in the Hudson Valley for Immigrants.

If your district or agency needs any assistance with taxes or accounting, please contact us at RBT CPAs.

What’s Next – ARPA for NEUs

What’s Next – ARPA for NEUs

To recap: The Coronavirus Local Fiscal Recovery Fund will provide $19.53 billion to support tens of thousands of non-entitlement units (NEUs) of local government as a part of the American Rescue Plan Act (“ARPA”) funding passed through New York State. The funding was allocated to NEUs using a specified formula based on population. The allotment is capped at 75% of the annual total operating budget in effect as of Jan 27, 2020. By now, all of the NEUs should know their allocation and have received the first traunch.

The second payment will be made no earlier than 12 months later, expected in July 2022

Generally, funds must be spent by December 31, 2024. Alternatively, contract funds obligated by December 31, 2024, may be spent through December 31, 2026, meaning that contracts should be signed, and funds encumbered by December 31, 2024, if not already spent. Funding can be used for eligible costs beginning March 3, 2021.

Now that the Final Rule has been issued, determining eligible costs can be much simpler. The Final Rule included a $10M safe harbor or minimum cap on eligible spending for government purposes. This broadens eligible costs and simplifies documentation. Above and beyond this limit, there are options to improve your community. Specific eligible uses include:

  • Respond to the COVID-19 public health emergency or its negative impacts
  • Respond to workers performing essential services during the COVID-19 public health emergency by providing premium pay to eligible workers or grants to eligible employers
  • Replace lost public sector revenue
  • Invest in water, sewer, and broadband infrastructure (water includes stormwater)

For reference, ineligible uses include:

  • Directly or indirectly offset a reduction in revenue due to tax cuts enacted from March 3, 2021, through last day of fiscal year in which funds have been spent
  • Deposit to a pension fund (extraordinary contribution)
  • Debt service

While you may still be working through the planning process, keep in mind that, as a NEU, you have reporting responsibilities to the U.S. Treasury. NEUs who receive more than $10 million in ARPA funding must follow the quarterly reporting schedule and NEUs receiving less than $10 million will follow an annual reporting schedule. As it is named, the Project and Expenditure Report requires information to be provided pertaining to project description and status, such as not started, completed less than 50%, more than 50% or completed. Some of the items included in the report are current period and cumulative obligations, and current period and cumulative expenditures. In addition, NEUs will be required to submit a copy of the signed terms and conditions agreement and the signed assurances of compliance with Title VI of the Civil Rights Act of 1964, both of which had to be submitted to NYS when the application for funding was made. A copy of the actual budget documents validating the top-line budget total provided to NYS must also be included.

In December the Treasury Department issued a guide to accessing the Treasury portal, setting up the municipality’s account and submitting documentation. The current version of Treasury’s guidance is available at set up guidance. Reporting guidance is contained in the SLFRF Compliance and Reporting Guidance, the most recent version of which was issued February 28, 2022.

For NEUs receiving less than $10 million in funding, the first annual Project and Expenditure Report is due April 30, 2022 and covers the period from March 3, 2021 through March 31, 2022. The Project and Expenditure Report is required to be filed annually; however, it is important to note that, while the first report covers slightly more than a year, the following annual reports cover the fiscal year which ends on March 31.  It is critical, then, to make sure that your accounting system can provide the information within that time frame and that appropriate accruals are made through March 31 and reversed in the following month to avoid over-inflating the expenditures at the following May 31 or December 31, depending on your fiscal year.

Finally, be aware that this funding is subject to Single Audit Act (“Uniform Guidance”) requirements. Your municipality may never have had a single audit before. If you expend $750,000 or more of federal funding from ALL sources in a fiscal year (including ARPA), you will be required to have a single audit. Expenditures are determined on an accrual basis, meaning that the expenditures are evaluated based on when the cost was incurred, not when the payment was actually made.  Note that the period under consideration is your fiscal year, not the federal fiscal year. Also note that when you receive the funds is not part of the determination.

ARPA funding is a tremendous chance to invest in your community. Proper accounting and reporting is key to maintaining compliance, and maximizing the impact of this once in a lifetime opportunity. Give RBT CPAs a call to partner with you on all your ARPA funding matters.

Mitigating Commodity Price Swing Risk

Mitigating Commodity Price Swing Risk

Just when there was light at the end of the proverbial tunnel and it looked like COVID-spurred commodity price swings were settling down, in comes inflation and a war, driving prices and uncertainties in the construction industry to unprecedented heights once again.

As reported on regarding the war in Ukraine, “The latest developments can slow down production activities and impact the export of commodities and goods. This is true as the tensions have led to supply disruption fears in an already-tight commodity market. A surge in prices of crude, natural gas, grains and metals has already been witnessed. The surging commodity prices can have a far-reaching impact on global economies like the United States and U.K., recovering from the pandemic-led slowdown and witnessing high inflation levels.”

What are construction companies supposed to do now to mitigate risks tied to sky high commodity costs? Here’s a few recommendations we’ve come across from the experts:

  • Evaluate your procurement plan and contracts with suppliers. According to consulting firm McKinsey & Company, cross-company collaboration for proactive decision-making (rather than reactive firefighting) and supplier negotiation strategies can make a big impact.
  • Update client contracts and proposals to include language and clauses that limit risk. For example, a price acceleration clause allows a contractor to revise a price based on the actual cost of labor and materials even after a contract is signed. A material substitution clause allows a contractor to substitute one material for another (should the original become unavailable). There are others: force majeure, material delay, mutual or bilateral material escalation clause, termination clause, risk splitting and thresshold approach, to name a few.
  • Embed risk mitigation tactics into all stages of a project, from bidding and contract to design, procurement and construction (according to com). For example, consider linking bids to cost indexes (i.e., ENR Materials Cost Index or AIQS Building Cost Index). Also, state the time-period that bids are valid. According to, avoiding delays by being prepared for shovel-ready projects and just in time purchasing may help, while other sources say to buy in bulk for several projects and store materials (if possible).

In truth, despite commodity price swings and growing labor costs, industry experts remain optimistic about the opportunities the lay ahead, with good reason when you consider the construction boom expected as a result of the Infrastructure Investment and Jobs Act. Some predict there is going to be more work than construction companies, which will increase competition for their services.

With everything else going on, one thing you don’t need to worry about is accounting and taxes. Let RBT CPAs focus on what we do best (accounting and taxes) so you can focus on what you do best (construction). Give us a call.

Please note: The information in this post should in no way be construed as legal advice. If you need assistance with anything legal-related, please contact a legal expert for direction.

Hudson Valley Manufacturing: Get Ready for Growing Pains

Hudson Valley Manufacturing: Get Ready for Growing Pains

The Hudson Valley enters 2022 with strong economic growth prospects, considering the increasing number of companies expanding manufacturing, fulfillment, and distribution operations, and opening new ones in the region. While the potential positives resulting are many, growth also poses challenges, especially when it comes to attracting and retaining skilled talent in an already-tight labor market.

Here’s a glimpse of the expansion underway… IBM’s footprint is growing in Poughkeepsie. RBW Studio moved its headquarters and is building factory in Ulster, and is being joined by Mio Marino Men’s Clothing Brand.  Amazon is opening a warehouse in Hawthorne and fulfillment centers in Montgomery and East Fishkill. Regeneron is planning a $1.8 billion expansion at its Tarrytown campus. Green Thumb Industries cultivation and manufacturing site is in Warwick. The Food Bank of the Hudson Valley’s new distribution center will be in Montgomery, while Frito Lay’s will be in East Fishkill.

There’s more to come, with Governor Kathy Hochul announcing a proposed $500 million investment for offshore wind ports, manufacturing, and supply chain infrastructure.

According to The Council of Industry, the U.S. is the world’s largest manufacturing economy, with 12.1 million employees and 21% of products worldwide. New York manufacturers employ 4.55% of the workforce (or 400,000 employees in 2020) and account for 4.01% of the state’s output (source: National Association of Manufacturing). While business conditions may be more favorable in other states, there’s still a resurgence taking place in the Hudson Valley, and business activity is growing swiftly.

Now for the kicker: as of December 2021, the Hudson Valley’s 2.7 percent unemployment rate is its lowest in over a decade. It’s lower than the U.S. unemployment rate (3.7 percent) and New York State’s (5 percent). That’s leading to significant challenges finding talent to take advantage of new opportunities and keeping existing talent safe from poachers. It can lengthen the time it takes to hire new employees, and up the ante in terms of what employees may be looking for from their employers.

With employees in the drivers’ seat when it comes to jobs, what can an employer do? The solution may rest with creating a multi-pronged strategy that addresses the challenge from several angles:

  • Digitalize operations Increase efficiency and eliminate non- or low-value activities, so you can focus limited pools of talent on what’s most meaningful. Consider how AI, robotics, the IoT, and cloud computing can help streamline operations and take over low-value repetitive tasks.
  • Engage your employees Hold focus groups with current employees and/or conduct a survey to gauge what’s working (and what’s not) in terms of your value proposition, from benefits and pay to promotion opportunities, development, culture, and more. Share results; develop a plan to address employee input; and communicate what the company is doing to better meet employees’ needs and reward their commitment and contributions.
  • Promote your employment brand and employee value proposition What distinguishes your workplace from others? Is it a great place to work? What percent of employees stay their entire careers? What percent advance on the career ladder? What unique benefits and perks do you offer? How do your pay and benefits compare to other employers’ in the area? Let prospects know by promoting this on your website and via social media.
  • Enhance recruiting Expand your presence and recruiting activities online. Take a more diverse view of the prospective employee population by reaching out to groups where you may find untapped talent (i.e., Veterans, disabled individuals, and others). Consider adding an employee referral program.
  • Streamline hiring. Replace the paper application with a mobile app. Forget about bringing a prospect back and forth to your organization for interview after interview, and instead use Zoom and standardized candidate selection processes. At hiring events, have staff scan resumes and connect virtually with those in the office for on-the-spot interviews. Have templates for job offers ready and digitalize hiring and payroll paperwork.
  • Foster relationships to build a talent pipeline. Check out the Council of Industry’s Hudson Valley Consortium Training; the New York State Manufacturers Intermediary Apprenticeship Program (MIAP); and Westchester’s Office of Economic Development pre-apprenticeship program.

Having enough employees with the right skills and in the right place may very well become one of the largest competitive differentiators in the coming decade. Position your organization to compete and win. Give RBT CPAs a call to partner with you on all tax and accounting matters, so you’re free to focus on creating and executing a winning talent acquisition strategy.

Limited-Scope Audits Expand Auditor and Plan Sponsor Responsibilities

Limited-Scope Audits Expand Auditor and Plan Sponsor Responsibilities

Effective December 15, 2021, new standards apply to audits of financial statements for employee benefit plans subject to the Employee Retirement Income Security Act (ERISA). While this primarily expands what’s required of an auditor, plan sponsors have some new responsibilities as well.

Employee retirement and health plans are legally required to undergo an audit – by a qualified accountant – at a plan’s year end to help protect plan participants. The auditor inspects financial accounts and issues a report on the plan. The audit helps hold those managing and controlling a plan accountable in their fiduciary responsibilities. After a United States Department of Labor assessment showed these audits had major deficiencies, new standards were issued.

The new standards apply to “limited-scope audits,” which are now called Statement on Auditing Standards (SAS) No. 136 ERISA Section 103(a)(3)(C) audits. Under the new standards, an employee benefit plan’s annual reporting obligations are expanded. Along with Form 5500, the auditor’s report must include an opinion on financial statements, schedules, and accounting principles and practices.

To start, a plan sponsor must provide a letter confirming eligibility for a Section 103(a)(3)(c) audit and acknowledge responsibility for plan administration (including maintaining the plan document and amendments; ensuring plan transactions are consistent with plan provisions; and maintaining accurate records to determine participants’ plan benefits). The letter must state the audit is permissible; investment information was prepared by a certified bank, insurance carrier or similar institution; and the certified investment information meets the new requirements, and is appropriately measured, presented, and disclosed.

In addition, the plan sponsor must provide a substantially complete draft Form 5500 – with forms and schedules that may affect the audit — to the auditor before he/she can move ahead with the engagement.

In turn, the auditor will evaluate the plan and use a new format to report findings. The report provides more transparency by requiring more details about the auditor’s opinion and basis for that opinion, as well as financial statements and the audit of those statements. The audit must include reportable findings that include noncompliance or suspected noncompliance with applicable laws and regulations; findings relevant to those who oversee financial reporting and governance; and/or an indication of deficiencies in internal controls warranting attention. Any reportable finding must be communicated in writing to those responsible for governance so it can be addressed in a timely manner.

While they require a bit more work, the new standards are a positive for plan participants and sponsors by promoting transparency and compliance, while uncovering potential issues when they are easier to rectify.

To ensure compliance, plan sponsors should start the process earlier than usual, so they can be sure to select a qualified, experienced auditor (like RBT CPAs), and have the time to gather and complete required paperwork and forms.

Your RBT CPAs partner is ready to walk you through the new process and conduct an audit to ensure compliance with the new standards. Give us a call so we can help you get started today.

SOURCES: SHRM, RSMUS, Employee Benefit Plan Audit Quality Center (EBPAQC),

There’s One More Thing You Can Do to Help Students Before Graduation…

There’s One More Thing You Can Do to Help Students Before Graduation...

No doubt, your seniors have started the countdown to the end of their high school career and start of what’s next. If what’s next includes higher education, there is one more thing you can do to help your students – let them know about local scholarship opportunities now.

Businesses big and small offer scholarships to give back to the communities where they operate and where their employees live. Numerous family foundations also offer scholarships and grants. Since the pool of candidates for these awards is often limited, students may stand a better chance of receiving this form of financial assistance than larger, national scholarships.

As an educator, you benefit from satisfying the innate desire to help educate the up-and-coming generation, fostering good will in the community (right before budget voting season), and having another valuable metric to show the value your school and its counselors deliver. (There are other reasons for promoting local scholarships – like the tremendous cost of higher education and the burden student loans put on families and students. See more in one of our previous thought leadership articles.)

Following is a list of digital platforms where you – and your students – can learn about scholarship opportunities. For platforms covering a smaller geographic area, become acquainted with the scholarships available and share a summary with your graduating seniors and their families. Think about whether you know students who match the criteria for a local scholarship; then, let them know about it via a personalized message.

For larger platforms, share the URLS with students and parents. Go a step further by holding weekly office hours dedicated to helping students search and apply for scholarships. You could also consider conducting a virtual training session via ZOOM.

Finally, engage your teachers by sharing information about local scholarships and scholarship platforms. Many have written reference letters for their students and probably know some who would benefit.

Here are some of our top picks for digital scholarship platforms covering our area:

  • The Community Foundations of the Hudson Valleyfeatures almost 70 scholarships and grants for students in Orange, Dutchess, Putnam, Sullivan, and Ulster counties. What’s more, each week there’s a free virtual scholarship support workshop to help students, teachers, guidance counselors and parents/guardians learn about the universal application, receive tips, and get answers to questions (click here to register.) The deadline to apply appears to be April 1 for most scholarships – review individual guidelines on the site to confirm.
  • The Chamber Foundationhas proudly awarded over a half-million dollars in scholarship funds to students from Dutchess, Putnam, Orange, and Ulster counties since 2001. The deadline to apply is April 1.
  • Rockland Community Foundationlists more than 30 scholarships for local students. Apply through the Foundation’s new online portal. There are varying deadlines, and some have already passed so be sure to take a look ASAP.
  • Mid-Hudson Scholarship Fund has a few scholarships, including ones for students planning to attend SUNY New Paltz. Deadline to apply is March 31.
  • comis a statewide platform listing more than 2.7 million scholarships. An applicant creates a profile, and the site narrows down which scholarships and grants they may be interested in.

Also remind students who are considering attending college locally to check out prospective school’s websites, which include information and links to scholarships and grants. For example, click on each school’s name to see the resources on its website: SUNY Dutchess, SUNY New Paltz, and SUNY Ulster.

While helping your students, there’s something you can do to help yourself — connect with one of our dedicated RBT professionals and let us handle your tax and accounting needs so you’re free to focus on what you do best – educating up-and-coming generations. Contact us today.