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Read this if your organization is looking to make an elective pay election.

The Department of the Treasury and the IRS on March 5 released final regulations (TD 9988) on the elective pay election for certain energy tax credits under IRC Section 6417, added by the Inflation Reduction Act (IRA), which treats the credits as a  payment against federal income tax liabilities. 

The final regulations adopt the proposed regulations (REG-101607-23) with some modifications that clarify which applicable entities are eligible to make an elective pay election and how the election should be made. 

The IRS also updated the elective payment frequently asked questions based on the final regulations. Finally, the IRS issued Notice 2024-27, which requests additional comments on any situations in which an elective payment election could be made for a clean energy credit that was purchased in a transfer,  a sequence of events referred to as chaining.    


The IRA introduced, for tax years beginning after December 31, 2022, the ability for some entities to monetize applicable tax credits via an “elective pay” election under IRC Section 6417. This allows applicable entities to treat certain credits as payment against their federal income tax liabilities and to receive a refund of any excess payment.  

Eligible credits and entities

The IRA specifies that only some credits and entities are eligible for the elective pay election under Section 6417. Applicable credits include: 

Credit for Alternative Fuel Vehicle Refueling/Recharging Property (Section 30C) Advanced Manufacturing Production Credit (Section 45X)
Renewable Electricity Production Credit (Section 45) Clean Electricity Production Credit (Section 45Y)
Carbon Oxide Sequestration Credit (Section 45Q) Energy Credit (Section 48)
Zero-Emission Nuclear Power Production Credit (Section 45U) Qualifying Advanced Energy Project Credit (Section 48C)  
Clean Hydrogen Production Credit (Section 45V) Clean Electricity Investment Credit (Section 48E)
Commercial Clean Vehicle Credit (Section 45W) - Tax-exempt entities only 

Eligible entities, referred to as “applicable entities,” include: 

  • Tax-exempt organizations
  • Any state, the District of Columbia, or political subdivision 
  • An Indian tribal government or subdivision 
  • Any Alaska native corporation 
  • The Tennessee Valley Authority 
  • Rural electric cooperatives
  • An agency or instrumentality of certain applicable entities


While the final regulations bring clarity to the issue of determining which entities are eligible to make an elective pay election, they notably exclude partnerships from making such an election (except with respect to Section 45V, 45Q, and 45X credits). This exclusion has significant implications for the renewable energy sector, where projects are commonly structured as partnership entities to pool capital, diversify risk, and combine the expertise of various entity partners. 

During the comment period on the proposed regulations, several commenters advocated for the inclusion of mixed partnerships—that is, partnerships that consist of both applicable entity and non-applicable entity partners—as applicable entities to allow for an elective payment election equal to the applicable entity partner’s allocable credit. However, the Treasury and the IRS rejected those suggestions and adopted the regulations as originally proposed.

However, the final regulations do allow entities to make a valid election out of Subchapter K as a means for these entities to make an elective pay election. Feedback from commenters highlights the complexities and burdensome requirements that arise from making such an election out of Subchapter K, limiting its usefulness. The Treasury and the IRS acknowledged such challenges and simultaneously issued proposed regulations under Section 761 for renewable energy projects that validly elect out of Subchapter K. Under the proposed regulations, exceptions would allow certain unincorporated organizations to make an elective pay election. 

Tax-exempt grants and loans

The final regulations adopt special rules regarding qualified energy property acquired using certain tax-exempt grants and forgivable loans. The rules state that (1) tax-exempt amounts are includable in the basis of the property and (2) “no excess benefit” can be derived from the use of restricted tax-exempt amounts used towards acquiring investment-related credit property. 

The addition of the “no excess benefit” rule effectively limits the amount of the applicable credit that can be claimed such that the sum of any restricted tax-exempt amount(s) and the applicable credit does not exceed the cost of the investment-related credit property. This rule applies only to tax-exempt amounts that are restricted for the specific use of purchasing, constructing, reconstructing, erecting, or acquiring the investment-related credit property. The final regulations include examples to illustrate this rule.  

Making the election

To participate in the elective pay election, all credits must undergo a prefiling registration process and the applicable entity must secure a valid registration number. Credits can be registered as early as the first day of the taxable year in which the qualified energy property is placed in service. Any election received by the IRS without a valid registration number will be deemed ineligible. As currently established, a “short form” renewal process for multiyear credits such as the production tax credit is not available. A new registration must be submitted each year a credit is generated. 

Applicable entities that already file an annual tax return would continue to file that return with the appropriate tax credit form and Form 3800 completed. Applicable entities that do not file an annual information return with the IRS would utilize Form 990-T. Note that the elective pay election must be made on an originally filed return (including extensions) and cannot be made on an amended return. 

The final regulations also confirm that fiscal year organizations that do not normally have tax filing requirements may adopt a tax year-end different from its current accounting year-end. Such organizations are required to maintain adequate books and records of any differences between their normal fiscal year-end books and adopted tax year-end books. This provides increased opportunity for organizations that placed qualified energy property in service early in 2023 and otherwise would have been excluded from a tax credit benefit. 

Processing of payments

The Treasury and the IRS opted not to define a specific time frame for processing payment of an elective pay election, instead indicating in the preamble that the prefiling registration process is designed to verify certain limited information in advance and mitigate the risk of delayed payment processing by the IRS. 

The final regulations additionally confirm that applicable entities that choose to make this election will receive payment in one lump sum as opposed to multiple payments. Some commenters had suggested an accelerated payment mechanism that would enable applicable entities to submit the election as early as the placed-in-service date of the qualified energy property, thus enabling the IRS to provide pre-payment of a portion of the applicable credit based on a review of the prefiling registration information. Given that the elective payment amount is treated as made when a credit claim or the annual tax return is filed, the Treasury and the IRS concluded that it would not be possible to implement this mechanism. 

Written by Leah Turner, Aaron Wright, and Gabe Rubio. Copyright ©2024 BDO USA, P.C. All rights reserved.

Treasury, IRS release final regulations on elective pay election for energy tax credits

The Federal Deposit Insurance Corporation (FDIC) recently issued its fourth quarter 2023 Quarterly Banking Profile. The report provides financial information based on Call Reports filed by 4,587 FDIC-insured commercial banks and savings institutions. The report also contains a section specific to community bank performance. In fourth quarter 2023, this section included the financial information of 4,140 FDIC-insured community banks. BerryDunn’s key takeaways from the report are as follows:

Community banks’ full year net income down $2 billion from 2022.

Full-year net income declined 7.1% in 2023 to $26.6 billion from $28.6 billion in 2022. Quarterly net income for community banks declined 9.9% in fourth quarter 2023, a $650.2 million decrease from the prior quarter resulting in $5.9 billion in quarterly net income. Compared to fourth quarter 2022, net income had decreased $1.9 billion, or 24.7%. More than half (59.7%) of all community banks reported a decline in net income compared to third quarter 2023. Net income for community banks was impacted by higher noninterest expense, lower noninterest income, and increased loan loss provisions.

Community banks’ net interest margins (NIM) remain constant in the fourth quarter at 3.35%.

Despite remaining consistent quarter-over-quarter, NIM was down 36 basis points from the year-ago quarter. The yield on earning assets increased 88 basis points while the cost of funds increased 124 basis points. Despite the significant decline, the community banks’ NIM performance continued to prevail over the overall banking industry’s NIM of 3.28%, which declined three basis points in fourth quarter 2023. Despite the decline, the banking industry’s NIM remained three basis points above the pre-pandemic average NIM of 3.25%.

Loan  and lease balances continued to grow in fourth quarter 2023, with 76.2% of community banks reporting quarterly loan growth. 

Loan and lease balances continued to see widespread growth in fourth quarter 2023. Community banks saw loan growth in all major portfolios. Residential real estate loans exhibited the most growth from the third quarter at 1.9%, followed closely by nonfarm, nonresidential CRE loans at 1.6%. Total loans and leases grew 7.9% from one year ago. This year-over-year growth was also driven by residential real estate and nonfarm, nonresidential CRE loans, which showed growth year-over-year of 10.1% and 7.2%, respectively.

Community banking: When one door closes, another opens

With many calendar year-end institutions having wrapped up, or in the process of wrapping up year-end financial statement audits, it is starting to feel as if we can finally put a cap on 2023. What a year it was! Although the above analytics might not paint the rosiest of pictures, with full-year net income having slid 7.1%, there is still a lot to celebrate from 2023. On the financial side, loan demand continued to remain relatively strong, especially given the challenging rate environment, with loan balances having grown 7.9% from one year ago. Deposit balances, although not matching the growth in loans, also increased from one year ago, having increased 2.3%. Although inflation remained stubborn throughout 2023 and thus far through 2024, the prospects of a “soft landing” have grown for many, with unemployment remaining at historic lows. Recently, the Fed signaled they hope to cut interest rates three times in 2024, although this seems to be a moving target, given inflation’s persistence. 

Let’s not forget, 2023 marked the year of adoption of the current expected credit loss (CECL) standard for many institutions. This is a monumental change for institutions, which completely overhauls the way institutions think about their allowance for loan losses. Not only did allowance calculations get completely revamped, many now relying significantly on vendors and peer data but as a result, processes, internal controls, and documentation also changed significantly from the previous incurred loss methodology. It is fitting for all of us to take a deep breath, as it feels as if we’ve all held our breath for the last few years leading up to adoption. We made it. Most of us are finally on the other side of an accounting standard that was issued seven years ago—and was partly a response to a crisis that occurred 15 years ago. 

Although there may be future adjustments and iterations, the CECL standard is here to stay. So, once we take that deep breath, it’s time to dig back in and continue to refine and build upon the calculation and processes we’ve implemented in 2023. We’ve come to learn that, among other things, documentation is key under the CECL methodology, arguably more so than under the incurred loss methodology, and thus should continue to be a focus in 2024.

It may be hard to believe, but it’s been just over a year since the bank failures of March 2023. This was a scary time for the banking industry, as uncertainty set in as to whether your institution could be next. But, for many institutions, this event can be looked back on as a positive moment in 2023. This event brought the differences in banks, community vs. regional vs. global, to the spotlight, allowing community bankers to showcase their differences, highlighting how community-oriented your institutions really are.

So, with that, we give a salute to 2023 and look ahead to 2024. We’ve learned a lot and we have 2023, in part, to thank for that. If quarter one is any indication, we’re in for another rollercoaster of a ride in 2024. Artificial intelligence, including “Gen AI,” continues to dominate headlines, the Fed continues to humor the idea of cutting interest rates, and let’s not forget, 2024 is an election year. But what is a “normal” year anymore? If anything, the last few years have exemplified just how resilient the community banking space really is and have given us the tools and confidence to adapt to change in nearly real-time. In other words, bring it on, 2024. As always, BerryDunn’s Financial Services team will be right alongside you, navigating every rise, bump, and drop of this rollercoaster ride.

FDIC Issues its Fourth Quarter 2023 Quarterly Banking Profile

Did you know that one in 36 children is diagnosed with autism, with many children and adults alike left undiagnosed? In addition, one in six people claim a sensory need or sensitivity. These sensitivities can create challenges for enjoying public spaces, just as physical limitations do.

Parks and recreation agencies, like any public-serving organization, have an obligation to equally serve all members of their communities. But knowing that something must be done is not the same thing as knowing how to approach it. As heard in a recent episode of the Let’s Talk Parks with BerryDunn podcast, host Becky Dunlap spoke with Meredith Tekin, President of the International Board of Credentialing and Continuing Education Standards (IBCCES), and Lane Gram, Manager for Parks and Recreation in Gilbert, Arizona, about how the town is undertaking the endeavor of making their parks and facilities accessible and enjoyable for all.

For the Town of Gilbert, inclusivity is a strategic priority. Their goal was for accessibility to extend beyond physical modifications, and into the heart of the experiences that their parks provide. Below are four of the key takeaways from their journey to having several of their parks and facilities designated as Certified Autism Centers.

Seek out the inclusivity experts

The Town of Gilbert realized they had some blind spots and didn’t have the best practice expertise to address inclusivity on their own. To solve this problem, they decided to seek the guidance, and certification from, the International Board of Credentialing and Continuing Education Standards (IBCCES). IBCCES is a global leader in professional autism and neurodiversity training and offers various certifications that can be earned by meeting their stringent criteria, including an Autism Certification for Parks and Recreation Departments.

Meredith Tekin, President of IBCCES, describes how they help organizations: “IBCCES works with a variety of organizations and industries for our certification programs. When you become certified, first and foremost, you do have a third-party, IBCCES, that is there to support you, provide recommendations and guidance for areas that your staff doesn't have intimate knowledge of. And we're here not only for the training portion, but throughout the lifetime of the certification.”

Be proactive about knowing the needs of your community 

Often, for those who are not neurodivergent, it can seem like a guessing game when trying to figure out how to be inclusive in ways that matter. It may take a bad experience and a complaint before it’s clear what is needed. To avoid this, in Gilbert, they took a proactive approach.

Lane explains, “For the Town of Gilbert, the process to become certified really started with our registration process and wanting the members of our community to feel like we were open to individuals with disabilities or special needs of any kind being involved in our programs. We added questions to our registration process to make people feel more comfortable in providing information [about which accommodations they need] and from there then we started with the training for the employees and all staff, at every level.”

This proactive approach makes it easy for the community to express their needs and allows the town to anticipate those needs ahead of time. As one example, they now offer a “quiet tent” at their 4th of July celebration where they provide noise-cancelling headphones and other comforts for those who need to take a break from the noise from fireworks and crowds.

Focus on inclusivity training for all parks and recreation staff

Training is a critical part of the IBCCES certification process. "To be considered a certified autism center, the baseline is that at least 80% or more of the public-facing staff have to complete some level of training with us. So, for an organization like a parks and recreation department, we train the staff, we have multiple levels and types of training depending on that person’s role and how they interact with the public,” explained Meredith.

Lane found the training incredibly helpful in giving staff members the understanding and communication tools to be more inclusive. She said, “A lot of other benefits came along with it, just general sensitivity and awareness for our staff to be treating everyone in the general community with respect and not just making a judgment based on what they might look like or how they're behaving. And so, for our staff, I think it's just making them better people and better stewards for the community and providing a better opportunity for community members to be involved in our programs.”

She gave an example of the impact: During a road shutdown, a bicyclist was in visible distress about changing their regular route. Understanding that this was a big deal to that person, and wanting them to have a good experience, the staff found a way for the cyclist to continue on their usual route that was not disruptive to the work they were doing. It may sound simple, but the staff used compassion and problem solving to create a better experience for that particular person.

Overcommunicate and prioritize inclusive services

For those with special needs, physical or otherwise, it’s incredibly important to have information available ahead of time. A site can be technically “accessible,” but is it accessible for the specific person who wants to go there? A person with mobility issues may be able to walk fine on certain surfaces, but may have issues with a particular type of surface. They want to know before they go that they’ll be able to get around and have a good experience--or know that it’s not a place where they will feel at ease so they can avoid it.

According to Meredith, “If you think you're over-communicating, you're probably doing just enough.” IBCCES recommends an easy to find website that gives as much detail as possible about the location or facility. 360-degree video tours, sensory guides, and photos are all good options for helping the community understand what they can expect. On-site, it’s also important to clearly communicate, via symbol-based signage, so people can easily find restrooms, parking, and other facilities at the location.

As part of the IBCCES certification, the organization provides sensory guides that rate on a scale of 1 to 10 the intensity of touch, taste, sound, sight, and smell experiences at each location, and provides a narrative about the types of experiences one can expect. This is an easy-to-understand tool that can help those with sensitivities plan ahead and choose activities that are best for them.

So, where to begin? For Gilbert, AZ, the process began by making accessibility and inclusivity a top priority as they partnered with BerryDunn on their most recent master plan. Highlighting inclusivity initiatives at the highest level of planning is critical in helping ensure that strategies are put into place throughout the organization to support these efforts in a holistic way.

For more ideas on how to create inclusive spaces, listen to the full conversation

BerryDunn works with parks, recreation, and library organizations across the US to help them strengthen operations, innovate, and enhance services that benefit their communities. We bring decades of experience working in public service in similar roles as our clients. Our expertise includes strategic and master planning, pricing and cost recovery, feasibility studies, and organizational and operational assessments, including recreation assessments. Learn more about our team and services. 

Expanding inclusivity: Making parks inclusive for those with autism

“Tell me and I forget. Teach me and I remember. Involve me and I learn.” — Benjamin Franklin

Investing in your staff is key to any successful organization. Having the wherewithal to be able to train a group of people, some willing and some unwilling, can be a daunting task. Yet, no matter how difficult to manage or how time-involving training is, it is an essential part of both a successful EHR go-live and maintenance of a system. No matter how technologically advanced the new EHR system may be, if an organization slacks on the training, it will never see the full return on investment of the cost of the system.

From years of implementation experience, I have compiled the five best practice methods to enable an organization to reach its maximal return on investment and user satisfaction with an EHR system.

EHR superuser training

A superuser doesn’t need to be the most technically savvy user, but they need to be able to be teachable and to transfer that learned knowledge to the other staff. These users should be the first to experience a new system. Oftentimes, some of these staff members would have been involved in the selection process. They are the organization’s first-line users and defenders of the new EHR functionality, and the ones that others turn to when they need help. Therefore, they are called super. For best results, there should be, at minimum, one superuser per specialty per every 15 users. At the time of go-live, these superusers need to be relieved of all their routine duties and focus on assisting the staff with the EHR adoption during the go-live dates.

EHR User Acceptance Testing (UAT)

It may say testing, but this is also a training method, and it should involve those already trained as superusers. UAT is time utilized as a field training exercise for your newly trained and specialty experienced superusers to test the system for proper process workflow in all fields of expertise. A testing script should be utilized for each process workflow and there should be room on that script for comments from the testers on improvements that need to be made prior to staff training. Each moment the superusers work on the testing scripts is a training exercise in navigating the system and making them comfortable with teaching their peers at the next venture.

EHR End User Training (EUT): The see, touch, and repeat approach

Training can be performed in many forms. As an organization, a decision on which format of training works best must be decided upon and then kept consistent. Methods of training could be in person, virtual, or online. The key to successful training, no matter which plan an organization chooses, is to involve the "see, touch, and repeat" approach to learning. Trainees should see the system in action, touch the keyboards or tablets and follow along with the instructor or through a written scenario, and repeat the processes multiple times at their own leisure in a testing environment. Implementing this method allows all generations of users in the organization to be properly trained on the new EHR.

In-person classes should be:

  • Separated by specialty or process
  • Involve manageable group sizes (one user per computer)
  • Include a brief overview of the EHR
  • Include a demonstration of the process workflow in action
  • Be followed by the user repeating the process on their own device

If there are more than two hours of content to train on, the recommendation is to divide the training into smaller durations to maximize the effects of learning.

Virtual classes involve an instructor performing the same steps as in-person training, but the end user attends from their office or a designated learning area. These can be pre-recorded and the EUT can occur during the optimal time for the user to have complete devotion to the training. In these instances, logins to the testing/training site need to be given out in a separate communication, and these logins should be single-user available, as to avoid complications from locked accounts if many end users are training at the same time. A trainer needs to have availability for questions if this process is utilized.

Online classes involve pre-recorded demonstrations that are included with process workflow scenarios. In these, the end user goes to a training site and watches sections of demonstrations one at a time. At the end of each section, the user may rewatch the online demonstration as many times as they need to, but there must be a self-paced scenario that the user follows along to perform the touch and repeat portion of the learning. Additionally, there needs to be contact information for a trainer should there be issues or questions. Many organizations utilizing this method of training allow the end user access to these training videos for refreshers once the EHR implementation has occurred.

EHR Just In Time (JIT) and At the Elbow (ATE) training

The JIT/ATE training is essential during and post go-live. Once an organization implements the EHR, there is always going to be someone who did not complete the training. That is where the superusers become involved and train these individuals in their time of need. These short, microburst, JIT trainings may involve a superuser hovering nearby the new user as they navigate through a documentation for the very first time. ATE training involves a superuser reaching out to a user who has had training but may have forgotten steps involved to complete the documentation. These are the times that those superusers show how super they are.

Post implementation of the EHR, as the superusers resume their normal duties, there will still be a need for JIT/ATE training, and their expertise will be sought out after by their peers, further assisting in a successful adoption of an EHR. In addition to the superusers, if available, a dedicated informatics employee should be making frequent rounding, looking out for those who may be struggling with the EHR documentation processes and workflows, and performing JIT/ATE training at these discovered instances.

EHR training refreshers and audits

“There are no shortcuts to any place worth going.” – Beverly Sills

This final stage of training is continuous. Once you have an EHR, there will always be a need for training. No matter how successful your training may have been, habits and shortcuts to documenting in an EHR are bound to occur, and then spread throughout the organization. For the most part, these shortcuts result in mis-documentation; audits must be performed to determine how detrimental to proper documentation they are. Once the issues have been identified, the organization must determine how to correct the issue. Sometimes this involves going directly to the end user whose documentation is at subpar levels and performing JIT/ATE training. If it is widespread, a refresher course for all end users may be required to correct the issues. Sometimes a communication of corrective action may work in substitution for JIT/ATE training.

“Don’t decrease the goal. Increase the effort.” — Tom Coleman

Regardless of the effort, all end users should have a contact to reach out to for assistance post EHR go-live and the ability to access a training site as needed. New hire training sessions should continue to be optimizable on documentation.

BerryDunn’s team of consultants is happy to assist you with creating a Request for Proposal, selecting the right EHR vendor for your organization, developing communication, change management, training plans, and project management for the system implementation.

Training: The key to a successful EHR go-live

Read this if you are interested in leadership.

Every successful leader uses their knowledge of their individual strengths, the mentorship of other leaders, and their driving purpose to create an authentic leadership style unique to them and their organization.

Recently, Sarah Belliveau, BerryDunn’s CEO, shared with Shawn Tuttle, the firm’s Director of Learning and Development, some insight into how she has navigated the different stages of her leadership journey. From joining the firm while still in college, to managing and developing the firm’s Not-for-Profit team, to leading the organization through challenging times, Sarah has leaned on her strengths, her colleagues, and her purpose to guide her. 

This conversation has been excerpted from the podcast BerryDunn Leadership Insights. Listen to the full conversation here

Career stage: Early career

Key strategies: Finding the right fit, advocating for yourself 

Shawn Tuttle: I thought maybe we could start with just hearing a little bit more about your journey at BerryDunn. I've heard you talk about being the first intern.

Sarah Belliveau: That's my favorite self-appointed title. That last semester at school, I needed a part-time job because I was paying my way through school and so I reached out to the principal in charge of our Bangor [Maine] office at the time, who had hired me [to begin full-time work in the summer], and I said I've got a relatively light load, if you have an opportunity for me, I'd love to start working. And so, I worked part-time while I was finishing up at school. And so, what struck me right out of the gate with BerryDunn is that that decision to allow me to do that was not for the benefit of BerryDunn, it was not because they had a need. They'd already done their hiring for the winter. It was because I had a need, and they took that into consideration and were concerned about me as a whole person. That was probably the first moment when I thought, "That is exactly where I need to work." 

And throughout—from the moment I started at BerryDunn, until I took on this new role—one of the things that made it so rewarding was that I had an opportunity to really participate in the development of our people. So, I call myself the original intern because I probably am the original intern, but also because the internship program was so important to me, as I was leading teams and helping BerryDunn grow and focusing on learning and development, I was a member of our inaugural Learning and Development Committee. And so, I just sort of had an opportunity to experience, both personally and in my work with staff, the full life cycle of developing people at BerryDunn. 

Shawn Tuttle: I'm thinking about, as you're talking, the three contexts that we talk about leadership in—so, self-leadership, leadership of others, and leadership of the organization—and your journey has really been about all three. Even that first instance you described is about self-leadership, saying, "I really want to get started, I really want to do this, and going and asking if it was possible, so taking that initiative."

Sarah Belliveau: Yes, absolutely. Advocating for yourself, recognizing what you need and what's important to you, and being brave enough to ask for it.

Career stage: Emerging as a leader

Key strategies: Finding great mentors and continuing to learn and grow 

Shawn Tuttle: Have you had a particularly impactful mentor in your journey?

Sarah Belliveau: I've had many and very impactful mentors, but the ones I think that have been most impactful are women leaders who have not been afraid to share their voice and use their voice and advocate or sponsor and make sure that I had opportunities that I may not have otherwise had. So those mentors have been absolutely powerful and impactful to my career.

Shawn Tuttle: That's such a strong thread, the, you know, sponsorship, empowerment, the availability of opportunities in your career and what you value and in the ways now that people have been impactful to you.

Sarah Belliveau: And [that] informs how I lead now. It is because I want to make sure everybody has those same opportunities.

Career stage: Leading a complex organization

Key strategies: Identifying your purpose and passion, bringing the right voices to the table 

Shawn Tuttle: Tell us about your interest in your current role.

Sarah Belliveau: [At] every point along my journey with BerryDunn, I have been provided opportunities to do what I love to do, what I found interesting, what fit in my life at the time, [and I’ve been given the] opportunity to work with folks from across the firm to develop something that had never been done before. Recognizing that the importance, for me, [was] in making sure that everyone has that opportunity and that those opportunities continue to grow well beyond when I'm here. And so, I recognize[d] for me personally that the next challenge and that next opportunity that was going to give me an opportunity to grow really was centered around making sure that the firm stays strong for future generations.

Shawn Tuttle: Is there anything specific you do on a day-to-day basis that's energizing?

Sarah Belliveau: Yeah, every single day. And this is the way it's been my whole career, really. It's one of the reasons why I've loved the career that I've been in is that every day, most days are very different, and every day I come in and there's the possibility that I'm going to be amazed by something that somebody has done. I'll hear about a new service that someone in the firm is developing, or I'll hear about a really cool client project that we're doing in Colorado, or I'll hear about, you know, a not-for-profit client that we're working with that is making important change in our communities. It's been really, really, really cool.

Sarah Belliveau has led the firm since 2021. Her intimate knowledge of BerryDunn’s culture, coupled with decades of working in direct client service, team development, and collaboration with diverse practice groups positioned her well to lead the dynamic group that the firm’s clients and community have come to expect.

Shawn Tuttle leads the firm’s Learning and Development efforts with a mission to empower continuous development that drives individual, team, and firm success.

Leveraging strengths, mentors, and purpose: The journey to authentic leadership

In February 2024, the American Association of State Highway and Transportation Officials (AASHTO) released a 2024 Edition of the Uniform Audit & Accounting (A&A) Guide, which supersedes the 2016 edition. The guide is a tool for architectural and engineering (A/E) firms calculating and reporting overhead rates to state transportation departments (DOTs), and to guide state DOT auditors and public accounting firms in performing audits of A/E firms’ indirect cost schedules.  

Here’s what you need to know about this update:  

  • The most significant changes in this update relate to the general audit considerations and the guidance for developing audit procedures. Updated guidelines are included to address a new auditing standard (AU-C 315) effective for audits of periods ending December 15, 2023, and after. This standard addresses the auditor’s responsibility to identify and assess the risks of material misstatement in the financial statements, and by extension, the indirect cost schedule.  
  • There are no significant updates to the cost principles, cost accounting, labor charging systems, compensation, or selected areas of cost guidelines. This means that A/E firms can continue to account for direct labor and indirect expenses consistent with past years. The Contract Cost Principles and Procedures in Federal Acquisitions Regulations (FAR) Part 31 remain applicable and should be used in conjunction with the guide.  
  • The update includes new defined terms, including but not limited to closely held corporation, cognizant approved rate, direct labor, fringe benefits, national compensation matrix, and special purpose financial statements. While the definitions are not overly specific, there is now some guidance on what should be considered within these categories. 
  • Appendix B – Internal Control Questionnaire has NOT changed. The 2016 version is still applicable and should be completed by all A/E firms that submit an audited indirect cost schedule to Departments of Transportation (DOTs). 

To avoid DOT audit rejection, it is critical that firms understand and comply with the updates identified above. How will this impact an indirect cost schedule audit for a fiscal year ending in December 2023? Your CPA firm’s audit procedures may need to change to conform to the new model to help ensure acceptance of audit reports.  

BerryDunn’s Construction and Professional Services Team has more than 30 years of specialized experience providing auditing services to A/E firms. Our high-quality overhead rate audits are accepted by state DOTs throughout New England and beyond. To learn more about the services provided, please contact our overhead rate audit team

Top takeaways from AASHTO's 2024 A&A Guide

Read this if you are a Skilled Nursing Facility (SNF) providing services to Medicare beneficiaries.

There are a few Skilled Nursing Facilities (SNF) reimbursement opportunities on the Medicare cost report. Two of them could reimburse providers for sizable expenses that the majority of SNFs experience every year: the Utilization Review (UR) and Medicare bad debts. 

Utilization Review: Medicare cost report opportunities

UR meetings historically focused on managing lengths of patient stay and reducing costs. The implementation of the SNF value-based purchasing program and the related incentive payment adjustment, which resulted in a reimbursement rate increase or reduction by up to 2%, led some facilities to increase physician or medical director involvement in the UR management in order to improve clinical outcomes. 

With the increase in physicians’ UR time, there frequently is a cost increase for SNFs. CMS Provider Reimbursement Manual – Part 1, Chapter 21, Section 2126.2, outlines the requirements for 100% reasonable Medicare program UR cost reimbursement.  The only mechanism for SNFs to get reimbursement for these costs is through the Medicare cost report. 

Why is this important? BerryDunn maintains a database of SNF Medicare cost report filings and analyzes the data annually, looking for trends and opportunities to help providers optimize available reimbursement. The cost report data shows that in 2022, only 2.29% of facilities claimed reimbursable Medicare UR costs. Of the facilities claiming UR costs, the average requested reimbursement was $17,631 per facility.

Average SNF Medicare Utilization Review Reimbursement per Medicare patient day by ownership type

Average SNF Medicare Utilization Review Reimbursement per Medicare patient day by county type

Average SNF Medicare Utilization Review Reimbursement per facility 

Source: HCRIS most recently available full utilization SNF cost reports, 2018 - 2022

Optimize your reimbursement: Utilization Review checklist available

To support SNFs with reimbursement for these costs, BerryDunn’s healthcare consulting team has developed a checklist that provides insight into Medicare cost report opportunities. Download the Utilization Review checklist.

Optimize Medicare SNF opportunities with utilization review reimbursement

 Read this if you are looking to keep your physicians and other team members engaged.

According to recent estimates, three quarters of physicians are employed by hospitals, health systems, or corporate entities. As a result, leaders in healthcare administration are increasingly confronted with the challenges and opportunities associated with engaging their physician workforce.

What is physician engagement?

The verb "engage" is used in common speech to convey a spectrum of messages and has a wide semantic range. Engage and its word family are used to impart diverse ideas. It can convey a range of meanings, from entering into battlefield combat to the promise of future matrimony. Considering this, the term used in today’s workplaces is not monolithic and its true definition should not be assumed. Instead, organization leaders should be clear on what engagement means to them—and clear about their intentions—if they want engagement to improve physicians’ job satisfaction and attain organizational goals. 

Why engage?

According to the Centers for Medicare and Medicaid Services (CMS), the US spent more than 17% of its GDP in the healthcare industry in 2022. Healthcare organizations are continually challenged to demonstrate improved quality and outcomes while lowering costs. Physicians face higher patient acuity and increasing time pressures, in addition to changing and growing regulatory burdens. So, it comes as no surprise that physician burnout is on the rise. 

A recent Gallup poll found a strong relationship between physician engagement and productivity. Physicians who were fully engaged were 26% more productive than those not engaged or actively disengaged. Moreover, physician care is the key revenue generator for hospitals. According to Merritt Hawkins’ 2019 Physician Inpatient/outpatient Revenue Survey, the average net revenue derived from admissions, tests, prescriptions, and procedures performed or ordered per physician was $2.4 million per year. Succinctly put, physician engagement positively affects healthcare organizations’ bottom lines. 

A model for employee engagement

There exist numerous models for employee engagement. One such model from DJS Employee Research focuses on the six Cs of employee engagement:

  • Career: Employees have an opportunity to develop themselves
  • Clarity: Employees believe there is an open, honest culture with trust and transparency
  • Confidence: Employees have confidence in their leaders and see them role modeling values
  • Communicate: Employees participate in decisions that affect their work and feel free to speak up
  • Care: Employees feel valued and recognized for the work they do
  • Collaboration: Employees feel able to innovate and suggest new ways of doing things

While each one of these Cs could be the topic of its own article, when viewed together they provide a helpful summary of all the components affecting a physician employee’s (now 75%) engagement with their organization. How is your organization faring in these categories?

Why physician engagement efforts fail 

Physician engagement efforts often fail due to an inability to understand the importance of engagement activities and, sadly, a simple lack of effort. When efforts are made, yet fall short, it is frequently a result of three Ms: misalignment, misunderstanding, and missed opportunities.

  • Misalignment of vision and goals
    Misalignment arises when a vision is not created and effectively shared, and goals are divergent, as administrators and physicians are not on the same page. The term “physician alignment” is often used inappropriately, frequently to describe strategies of how to maximize organizational outcomes (usually financial). As a result, alignment has come to mean the business relationship organizations have with physician groups, rather than the alignment of vision and goals.
  • Misunderstanding and lack of communication
    Misunderstanding arises when time and effort aren’t expended to listen, understand, and confirm clarity in communication. When misunderstanding occurs, even in the presence of a good foundation of shared vision and goals, administrators and physicians may still be at odds. What do organizations want from their physicians? Referrals? Enhanced revenue? Increased patient throughput? Quality, even though metrics may not accurately reflect what is considered to be true quality? Better documentation? No complaints?

    Healthcare administrators not only need to clearly communicate their priorities, they also need to make a sincere effort to seek physicians’ perspectives, listen to them, and value that feedback. Lack of clarity leads to poor communication, which undermines collaborative efforts and breaks down confidence, resulting in individuals not feeling cared for and consequently more likely to find career opportunities elsewhere.
  • Missed opportunities: Quadruple aim and physician turnover
    Missed opportunities are the unfortunate result of a continued cyclical pattern of misalignment and misunderstanding. They become a cost to the organization, hampering the attainment of healthcare’s quadruple aim: improving population health, the patient experience, and the work life of health-care providers, all while reducing cost.

    Perhaps the ultimate missed opportunity is the physician who has chosen to take their career somewhere else because of a lack of attention to the six Cs described above. Physician turnover is extraordinarily expensive. Estimated hospital opportunity costs in 2019 (in terms of lost revenue) range from $175,000 per month for a family physician to $273,000 for an orthopedic surgeon. Additional expenses include new physician onboarding, estimated in 2016 to cost between $200,000 and $300,000 (8), a figure undoubtedly higher today. 

Communication and Clarity

While all the six Cs are important as a framework for capitalizing on opportunities, two stand out as particularly illustrative: Communication and Clarity. Physicians and associated medical staff are highly educated and trained. They have valuable ideas and contributions, yet frequently don’t share their thoughts outside the protected bubble of their peers. Healthcare administrators need to create a safe space for physicians to communicate their thoughts, insights, and suggestions. 

Missed opportunities also result from lack of clarity on the purpose of contemplated changes. Unintended consequences may result. At times, actually implementing a change can itself be a missed opportunity. How often has a change been made to reduce costs, only to result in adverse impact on physicians? 

An example is the large physician group that wants to streamline and eliminate some administrative tasks. Administrators institute use of a new online platform for expense reimbursement, requiring physicians to input information on their own, including scanning, uploading, etc. Administrators may reason because they themselves perform the task routinely, shouldn’t physicians as well? Often too late, they realize, that imposing this seemingly minor administrative burden has yielded unintended consequences. In this example, chasing potential savings through an ill-advised change resulted in negative physician impact, disengagement, and eventually, organizational loss.

Beyond physician compensation

Competitive compensation packages are certainly important, and organizations wrestle with providing appropriate incentives and integrating value-based metrics into their models. Organizations should strive to provide compensation models in which incentives align with values. Equity is important, as is avoiding models that cater to ‘squeaky wheels’ or are prone to special deals.

Organizations should understand that simply raising compensation to above-market levels does not necessarily buy positive physician engagement. Undoubtedly, physicians want to be fairly and equitably compensated. However, it is just as important that physicians feel listened to and heard, proving their opinions matter and that they are valued. 

Words matter, as does professional identity. Physicians want to feel they have some measure of autonomy. Physicians often feel they have no control, sensing decisions are made by others. They perceive private equity firms deciding overall budgets, insurers approving or disapproving procedures, administrators controlling hours, hiring and firing, and staffing without their input. Physicians bemoan lack of organizational power, yet feel they are held responsible for poor outcomes. 

Physicians frequently report disliking and being demoralized and devalued by use of the term “provider.” A Mayo Clinic blog author has emphasized that the word “provider” is a nondescript term that confers little meaning. It does not convey to patients or to anyone else who will be caring for them. It implies that the relationship between physician and patient is one of simple commercial transaction. Titles matter. Imagine a Chief Financial Officer of a hospital being referred to as a “finance provider.”

Physicians care deeply about their patients and providing quality care. Tasks that physicians perceive as taking time and not directly contributing to patient care are not viewed as important. Administrators can avoid potential goal misalignment by communicating their needs to physicians from a patient care and quality standpoint. Goals do not necessarily need to be the same.

Administrators can succeed by framing their goals in terms of what is important to their physicians. While it might be particularly important to a hospital administrator to improve medical record documentation to facilitate coding and revenue cycle management, physicians are less likely to respond to a pure financial argument. They will be more likely to participate in a medical record completion initiative by appealing to quality-of-care issues and the impact of poorly documented medical records on continuity of care, risk management, and the ability for physicians to effectively treat patients post-discharge. 

Improving physician engagement

When seeking physician engagement for a contemplated or planned initiative, it starts with listening. Administrators should hear and understand physician concerns and actively seek their input. Develop a communication plan. Depending on the issue and nature of the organization, communication can take the form of personal meetings, town hall sessions, written communication, or optimally, a combination of all three. Enlisting help from the medical team can be especially useful. In larger organizations, the identification of physician champions can be particularly beneficial to model behaviors and carry messaging to peers. A consistent, clear message is paramount to successful physician engagement.

Through understanding the importance of physician engagement, how it can go awry, and truly appreciating a physician’s perspective, healthcare administrators can build allies, not adversaries, and create an environment of collegiality, cooperation, and collaboration. Success conjures images of wedding bouquets rather than of the battlefield. 

BerryDunn champions a unique approach to the physician-administration relationship. Reach out to us if you would like more information or would like to discuss how to improve physician engagement at your organization. We’re here to help.

Physician engagement: A framework for success  

Read this if you are looking to apply for a 48C tax credit. 

The second round of funding applications for the qualifying advanced energy project credit program under Internal Revenue Code Section 48C will open in spring 2024. Are you prepared to apply?

The initial round of 48C applications was highly competitive—nearly $42 billion of allocation was requested for an available funding pool of $4 billion. The second round of funding may be even more competitive, as organizations that missed out on the first round are joined by new enterprises eager to make the most of this opportunity. 

Assembling a concept paper can take significant time and resources, but round two applicants have the advantage of being able to refer to the Department of Energy’s (DOE) feedback on round one concept papers to inform their strategy. 

Are you planning to apply? Based on our work helping companies with 48C concept papers and applications, we’ve summarized four major takeaways from the DOE’s feedback on round one concept papers to help you prepare. 

  1. Select the correct project category
    The DOE noted that some applicants did not select the appropriate project category or submitted projects that do not qualify for 48C awards, including those involving uranium or research and development (R&D). Some projects also included unqualifying costs relating to operations, property, or other activities in the qualified investment. For example, applicants who submitted critical mineral extraction projects were discouraged because extraction is an unqualifying activity. If those applicants had proposed projects on the subsequent steps to produce the critical materials, such as physical refining and chemical or thermal treatment, rather than focusing on extraction, those projects likely would have qualified. 
  2. Communicate commercial viability
    Some submissions did not properly demonstrate commercial viability for their proposed projects. The criteria for articulating commercial viability require details regarding the project timeline, rationale for site selection, sources of financing, and a business plan for bringing the product to market. The timeline must also show that the proposed project will be placed in service within the required two years following receipt of the credit. 
  3. Prioritize specialization
    The DOE penalized projects that were insufficiently specialized. For example, some applicants submitted proposals for projects supporting facilities that also make products outside the criteria for 48C. These other products do not meet the policy goal of supporting the development of clean energy, and therefore, associated concept papers may have received a discouragement letter. 
  4. Emphasize community impact
    In addition to supporting the domestic renewables industry, a major underlying policy goal of 48C is to support investment in workforce and community development. Many applicants received feedback on the lack of workforce and community impact details in their concept papers. Emphasizing the benefits a project will bring to the local community—including job creation, job training programs, and overall economic impact—is a priority for the DOE. 

Are you ready for round two? 

Although the funding pool for round two will be larger than it was for round one, the application process will likely be just as competitive. Prospective applicants who prepare now will likely be better positioned to submit a comprehensive concept paper when the process officially opens this spring. 

Written by Gabe Rubio, Jesse Tsai, and Courtney Sandifer. Copyright ©2024 BDO USA, P.C. All rights reserved.

Four lessons learned for round two of Section 48C tax credit applications