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Organizations across industries are constantly seeking ways to enhance efficiency, streamline operations, and maximize value. However, outdated processes, unnecessary complexity, and organizational inertia can hinder progress, slowing innovation and impacting productivity. The good news? Businesses and institutions can adopt proven methods to become more agile, responsive, and effective—with the right mindset and leadership. 

Change can be daunting. Leaders may worry about disrupting established workflows, employees may fear efficiency initiatives could threaten job security, and stakeholders may hesitate to embrace new approaches. But the reality is this: Lean thinking isn't about cutting corners—it's about optimizing value. It's about refining processes so that employees can focus on what truly matters: delivering results. 

This approach reduces bottlenecks, eliminates redundant steps, and ensures that every action aligns with broader organizational goals. By adopting Lean methodologies, businesses can unlock new opportunities for innovation and productivity. 

The lean methodology 

Lean is all about working smarter, not harder. Originally developed from Toyota’s production system, Lean principles now extend beyond manufacturing into industries such as healthcare, technology, and finance. The core goal? Remove inefficiencies—whether excessive paperwork, outdated procedures, or unnecessary handoffs—so that teams can operate at peak performance. 

Rather than disruptive, large-scale changes, Lean focuses on continuous, incremental improvements that refine workflows over time. This approach enables organizations to optimize resources, simplify processes, and eliminate barriers to success. 

Identifying and reducing waste 

Lean methodology centers around eliminating waste in seven key areas: 

Transportation: Unnecessary movement of materials, information, or people slows down operations. Organizations should assess whether digital alternatives can replace physical movement, optimizing accessibility and minimizing disruptions. 

Inventory: Excess resources, whether unused equipment or redundant data, increase costs and complexity. Streamlining assets ensures that every resource serves a clear purpose. 

Motion: Inefficient physical movements or cumbersome digital workflows slow down productivity. Identifying friction points—whether unnecessary clicks or outdated storage practices—helps refine efficiency. 

Waiting: Bottlenecks occur when approvals, materials, or decisions are stalled in a queue. Empowering teams with clearer processes and real-time visibility reduces delays. 

Overprocessing: Adding unnecessary steps to a task makes it more time-consuming than necessary. Simplifying workflows ensures essential tasks remain streamlined without sacrificing quality. 

Overproduction: Producing more than needed creates inefficiencies. Whether it’s excessive documentation or redundant reporting, cutting down on excess work optimizes time and resources. 

Defects: Errors in processes lead to rework and wasted effort. Investing in clear instructions, automation, and proactive checks reduces mistakes and ensures smoother operations. 

Taking the next step toward operational excellence 

Lean methodology provides a powerful framework for enhancing efficiency, reducing waste, and driving meaningful improvements. By embracing continuous innovation, organizations can work smarter—not harder—delivering better results while optimizing resources. Whether streamlining workflows, eliminating unnecessary steps, or fostering a culture of improvement, Lean helps businesses operate at their best. 

Embracing smarter processes unlocks new potential for agility, productivity, and innovation. Organizations that invest in efficiency don’t just survive—they thrive. Ready to explore Lean principles further? Download our ebook to learn more details and explore common myths about Lean. 

On July 18, 2025, the United States took a historic step in digital finance when President Donald Trump signed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act into law. This legislation introduces the first comprehensive federal framework for payment stablecoins, aiming to balance innovation with consumer protection and financial stability while strengthening the US dollar’s global dominance. 

What are payment stablecoins? 

Payment stablecoins are digital assets pegged to a fixed monetary value (such as the US dollar) and designed for payments. Unlike volatile cryptocurrencies, they maintain price stability, making them attractive for everyday transactions and financial services. 

Key provisions of the GENIUS Act 

• Only permitted payment stablecoin issuers can issue stablecoins in the US, with the three main categories being: 

  1. A subsidiary of an insured depository institution 

  2. A federal qualified payment stablecoin issuer (can include nonbank entities but must be approved by the Office of the Comptroller of the Currency) 

  3. An entity established under state law and approved by a state payment stablecoin regulator 

• Stablecoins must be 100% backed with high-quality liquid assets (US dollars, short-term Treasuries). 

• Issuers must provide monthly disclosures of reserve composition. These disclosures must be reviewed by a Public Company Accounting Oversight Board (PCAOB)-registered accounting firm. 

• Issuers are prohibited from paying interest or yield to stablecoin holders. 

• Issuers are subject to the Bank Secrecy Act, requiring anti-money laundering and sanctions compliance programs. 

• In insolvency, stablecoin holders’ claims take priority over other creditors. 

• Issuers must have the technical ability to freeze or seize assets when legally required. 

• Stablecoins are not federally insured and may not be marketed as having such insurance. 

Why would companies issue stablecoins? 

Given that stablecoins must be backed 1:1 with highly liquid assets and they cannot pay interest, it begs the question of why a company would want to issue its own stablecoin, especially given the regulatory requirements. Furthermore, why would one want to invest in a stablecoin? 

Let’s use Starbucks as an example: 

Starbucks could issue its own stablecoin, let’s call it “Star Bucks” (pretty clever, right?) Starbucks customers could purchase Star Bucks and then use those Star Bucks when making purchases at Starbucks. To encourage the use of Star Bucks, Starbucks could offer incentives, such as lower prices and exclusive deals. But again, why would Starbucks want to encourage the use of Star Bucks? Think of it as free financing. Starbucks is taking customers’ money in exchange for Star Bucks. Sure, these Star Bucks must be backed 1:1 with highly liquid assets, but Starbucks will earn interest on these highly liquid assets. In a way, it’s like purchasing a gift card—the customer is giving a company money in exchange for a future product/service from that company. The company can then invest that cash. Starbucks could possibly even offer its employees Star Bucks in lieu of a paycheck, further increasing the amount of cash (or highly liquid assets) Starbucks has on hand. 

Impact on community banks 

One of the benefits of stablecoins is the ability to make real-time payments, thus increasing the chances of businesses and consumers circumventing the banking system. There are also concerns that if stablecoins become popular, it could cause a decrease in deposit balances held at financial institutions. Although stablecoins must be backed 1:1, the assets backing stablecoins don’t necessarily have to be in cash. Thus, it is not a guarantee that stablecoin issuers will back these assets with deposits at financial institutions. This isn’t entirely a new problem for financial institutions, as Starbucks reported stored card value at $1.78 billion at the end of 2024. This is cash that is sitting on gift cards instead of in a bank. Although some of this cash may still find its way into financial institutions, it’s likely not all of it will. 

There’s also concern that stablecoins may cause US Treasury market instability. US Treasuries are one of the permissible investments for backing stablecoins. Thus, there may be companies that have historically not been interested in US Treasuries that now will be. This increased demand could drive up US Treasury prices, which would lower their yields. Alternatively, there are also concerns as to what would happen if there were a “run” on the stablecoin market. For instance, stablecoins are built on blockchain technology and there are concerns that the safety of this technology could be compromised with advances in quantum computing. If stablecoin holders lose confidence in the system, it could cause them to dump their stablecoins rapidly, causing the stablecoin issuers to fulfill these redemptions, selling off large quantities of US Treasuries and possibly withdrawing large sums of cash from financial institutions.  

In a way, think of stablecoin issuers, especially those that are not financial institutions, as an added layer to the financial ecosystem. And, with each new layer, there is often an added level of market instability. However, community banks cannot ignore the GENIUS Act and the stablecoin market.  

Community banks will have a significant strategic decision to make:  

1. Issue its own stablecoin 

2. Partner with a fintech to issue a stablecoin 

3. Stay out of the stablecoin space 

Community banks will also need to decide if they’re willing to hold assets meant to back stablecoins for other stablecoin issuers. 

The stablecoin market will be an evolving landscape, and there is much to still be learned as to how the GENIUS Act will work in practice. The GENIUS Act becomes effective on the earlier of 18 months after enactment (so, January 18, 2027) or 120 days after federal agencies issue final regulations. Community banks should start discussing internally now how they plan to approach the GENIUS Act. If you plan to issue your own stablecoin, please reach out to the BerryDunn team. As a PCAOB-registered accounting firm, we are fully equipped to review your monthly reserve composition disclosures. 

This article is for CFOs, controllers, and directors of finance at companies that are owned by Employee Stock Ownership Plans, particularly recently established plans. 

Employee Stock Ownership Plans (ESOPs) are an attractive employee benefit, giving employees ownership interest in the company through shares of stock and an appealing exit strategy for founders. However, accounting for ESOP transactions can be confusing and cause frustrations for accountants. Understanding the basics of accounting for ESOP transactions is essential to avoiding inaccurate financial statements and ensuring compliance with US Generally Accepted Accounting Principles.  

Financing the ESOP 

ESOPs can be financed with internal or external loans. For an internal loan, the company provides the financing to the ESOP trust, essentially lending money directly to the trust for the purchase of shares. This type of loan is not recognized on the company’s General Ledger (GL), meaning it doesn’t appear as a liability or asset in financial statements. The ESOP trust receives contributions from the company, including the amounts required to repay the internal loan. If the company were to report the internal loan in its GL, it would artificially inflate the total assets on the company’s financial statements. An internal loan provides the company with greater control over provisions of the loan, such as interest rate and repayment terms. 

With external loans, funds are borrowed from either the selling shareholders, a financial institution, or both, and are reported on the company’s balance sheet. External loans are legal obligations of the ESOP trust. However, the company has an obligation to provide the trust with sufficient capital to service the loans and therefore must reflect the liability on the balance sheet.  

Unearned ESOP shares 

Unearned ESOP shares, sometimes referred to as unreleased shares, are shares that have been contributed to the trust but have not yet been allocated to individual employees. On the balance sheet, these shares are reported as a contra-equity account at the original transaction cost of the acquired shares, less the annual amount of shares, which are released for allocation to ESOP participants. Unearned ESOP shares are released at historical cost when repayment of the internal loan occurs.  

Commonly, companies will inappropriately report an ESOP note receivable rather than unearned ESOP shares, resulting in an overstatement of assets.  

ESOP compensation expense 

ESOP compensation expense is recorded annually based on the average fair value of the ESOP shares released for allocation to participants during the year. Shares are deemed to be released ratably throughout the year despite the fact that they are generally allocated at one time. The actual share allocation typically occurs several months after the financial statement date. However, an accrual is generally not required.  

ESOP compensation expense may be presented as a component of the cost of sales or selling, or general and administrative expenses. It is also permissible to present ESOP compensation expense as a component of other income and expense on the statement of income.  

About BerryDunn 

Whether your ESOP is newly established or mature, proper accounting is critical to accurate financial reporting. BerryDunn’s ESOP experts are excited to partner with employee-owners to help address any technical accounting or compliance matters. Learn more about our team and services. 

In recent years, the public health workforce has faced unprecedented challenges—from responding to the COVID-19 pandemic to addressing the impact of social determinants of health on communities to stark changes in policy at the federal level. These pressures have led to poorer quality of care, reduced access to services, diminished preparedness, and a decline in public trust in the public health system. As political tensions deepen and workplace stress intensifies, public health employees are reporting increased mental health concerns, including burnout and moral injury. 

To address this crisis, government and non-governmental agencies are implementing actionable strategies to support workforce wellness. These include trauma-informed leadership, peer support networks, flexible work policies, and regular wellness check-ins. By creating supportive environments and promoting resilience, organizations can strengthen the public health infrastructure and ensure the workforce is equipped to meet both current and future demands. 

Mental health and stigma 

The Public Health Workforce Interests and Needs Survey (PH WINS) reveals alarming levels of burnout among public health professionals. In 2021, nearly half of respondents reported frequent feelings of burnout—up from 32% in 2017. Similarly, nearly half expressed intentions to seek new employment, compared to 33% in 2017. 

These findings underscore the need for proactive measures such as open dialogue around mental health, access to resources, and flexible work arrangements. 

Read our previous article to explore PH WINS data and the evolving landscape of public health transformation. 

Understanding burnout and moral injury 

Burnout is closely linked to mental health conditions such as anxiety, depression, and trauma. It often manifests as exhaustion, reduced motivation, and cynicism. According to the National Center for PTSD, moral injury was initially identified in military veterans exposed to events that violated their deeply held moral beliefs. In the context of clinical health workers, moral injury is described as “knowing what your patients need and being unable to provide it due to external constraints.” 

These issues are increasingly prevalent across the public health workforce—from community health workers to epidemiologists—and affect both governmental and non-governmental organizations. The de Beaumont Foundation defines burnout as an occupational syndrome caused by chronic workplace stress, leading to emotional exhaustion, depersonalization, and a diminished sense of personal accomplishment. Key contributors include excessive workloads, moral injury, and insufficient support. 

To mitigate these effects, agencies are encouraged to implement peer support programs, conduct interviews to understand retention drivers, and explore alternative support models such as the Critical Incident Peer Support Model used in emergency response sectors. 

Real-world impact 

The strain on public health workers is evident in crisis situations. For example, in January 2023, over 653,000 people—roughly 20 per 10,000—experienced homelessness in the U.S. As emergency shelters reached capacity, public health workers faced increased workloads with limited staffing and resources. The emotional toll of turning away individuals in need further deepens moral injury and burnout. 

These scenarios highlight the importance of building a dynamic public health emergency response infrastructure and reinforcing core public health functions to better support both the workforce and the communities they serve. 

Trauma-informed public health practice 

To support recovery and resilience, agencies are increasingly adopting trauma-informed approaches. These frameworks recognize the impact of trauma on both the workforce and the communities served. Trauma-responsive leadership can empower public health professionals to perform effectively while fostering healing. 

A trauma-informed organizational change model is built on four core assumptions—known as the “Four Rs”: 

1. Realization of the widespread impact of trauma 
2. Recognition of trauma symptoms 
3. Response through integrated policies and practices 
4. Resisting re-traumatization 

These are supported by six guiding principles that promote safety, trust, collaboration, empowerment, and cultural sensitivity. Agencies can use these principles to create trauma-informed environments that support healing and resilience. 

Key recommendations for agencies 

To champion mental wellness and build a resilient public health workforce, agencies can: 

• Create supportive environments: Encourage open dialogue around mental health, provide access to supportive resources, and implement flexible work policies. 
• Promote work-life balance: Support boundary-setting and offer flexible schedules to reduce overload. 
• Establish peer support networks: Create safe spaces for sharing experiences and mutual encouragement. 
• Conduct regular wellness checks: Use surveys and check-ins to detect early signs of burnout. 
• Build leadership pathways: Review promotion practices and policies to help assure accessible career ladders within the public health agency 
• Strengthen emergency response infrastructure: Develop dynamic systems to handle public health crises. 
• Reinforce core public health functions: Invest in foundational capabilities. 
• Foster trauma-responsive environments: Ensure organizational practices support healing and resilience. 

BerryDunn's public health team is comprised of former state and local health agency leaders and public health professionals with assessment and planning, accreditation readiness, technology solution planning and procurement, policy and program development, project management, health information exchange, and data modernization expertise. Learn more about our team and services. 

Most healthcare organizations conduct internal or external Evaluation and Management (E/M) audits on a monthly, quarterly, or annual basis to stay ahead of compliance risks and optimize reimbursement. While these audits can be stressful, given their association with risk, penalties, and payer scrutiny, when executed effectively, they can uncover significant opportunities within a practice. A well-structured E/M audit, combined with a strategic audit plan and targeted education, can shift the focus from apprehension to opportunity. Instead of asking, "Did we do something wrong?" the conversation transforms to, "What can we improve, clarify, or claim with greater confidence?" 

Audits frequently reveal consistent issues such as under-coding, vague documentation, or inconsistent use of templates. Addressing these concerns can lead to more accurate coding and enhanced revenue integrity. Implementing a strategic audit plan allows practices to proactively identify and correct such issues. By doing so, practices can not only avoid potential penalties but also optimize their revenue streams. Keep these things in mind during your next E/M audit:  

Involve certified coders for the most accurate and compliant E/M audit 

Certified coders help ensure that coding is precise and compliant with current regulations. Trained in CPT®, ICD-10-CM, and payer-specific E/M guidelines, coders apply their expertise to help ensure proper audits. They examine documentation and coding for issues. Coders also provide educational feedback to providers by looking at audit insights and then illustrating a finding for providers with examples from the provider’s notes. The improved documentation and corrected coding errors that result from the certified coder’s work help providers boost revenue through accurate reimbursements and reducing denials. 

Tie your E/M audit to physician education

The true advantage of audits emerges when findings are tied to education—specifically, sessions tailored to the provider’s specialty and utilizing examples from their own documentation. When providers comprehend the rationale behind the feedback, their engagement, confidence, and ability to improve increase significantly.  Comprehensive physician education remains critical, equipping providers with insights into intricate coding requirements and the necessity of detailed documentation. E/M audits extend beyond mere compliance checks. They are essential tools for continuous quality improvement, operational efficiency, and financial sustainability.  

Think strategically 

A strategic E/M audit plan is designed to continuously improve accuracy, compliance, and revenue integrity. By integrating certified coders and focused physician education into the audit process, practices can enhance their revenue integrity and ensure long-term success. A strategic audit plan, therefore, creates opportunities for improvement, turning potential apprehensions into avenues for advancement. 

BerryDunn’s healthcare compliance team incorporates deep, hands-on knowledge with industry best practices to help your organization manage compliance and revenue integrity risks. Learn more about BerryDunn’s team and services. 

This content was originally published on the website of Washington State Association of Counties.

Artificial Intelligence (AI) is no longer a futuristic concept reserved for research labs or tech giants in Silicon Valley. Today, AI is becoming a practical and powerful tool for local governments across the country—helping to boost efficiency, reduce costs, and elevate the quality of public services. 

When people think of technology in local government, they often picture modest upgrades: digital kiosks at city hall, online form submissions, or automated customer service portals. While these improvements are helpful, they only scratch the surface of what’s possible. They’re incremental steps in a world that increasingly demands bold, transformative change. 

Traditionally, local government hasn’t been seen as a pioneer of innovation—and that’s okay. But the landscape is shifting. Rising service demands, workforce shortages and their expectations of the workplace, and tight budgets require new and innovative ways of doing business. While it’s natural to feel uncertain about AI, avoiding it will put your organization at a disadvantage. 

The real question isn’t if local governments should engage with AI—it’s how to do it thoughtfully and strategically. Embracing AI doesn’t mean replacing people; it means empowering them. In fact, as technology becomes more integrated into our daily work, human creativity, critical thinking, and leadership are more important than ever.

How does AI translate to the public sector? 

AI can support local governments in tackling complex, everyday challenges. For example: 

• Revenue forecasting: AI-powered tools can help municipalities navigate economic uncertainty by identifying trends and improving budget accuracy. 
• Workforce planning: AI systems can optimize staffing levels to match service demands, helping reduce unnecessary costs while maintaining service quality. 
• Infrastructure maintenance: Public Works departments can use AI to analyze road usage and wear patterns, enabling proactive maintenance and smarter resource allocation. 

AI excels at analyzing data and surfacing insights—but it can’t set a vision or lead change. That’s the role of human leadership. Now more than ever, local governments need to think creatively and act strategically. Delaying key initiatives—like modernizing outdated systems or developing a long-term strategic plan—due to short-term budget concerns can hold communities back. Failing to plan is increasingly becoming more costly than taking action. Holding off on AI until you feel completely comfortable with it is not a viable strategy; forward-thinking municipalities are already realizing its benefits. 

By embracing innovation and focusing on the future, local governments can turn today’s challenges into tomorrow’s opportunities. The needs of your constituents are evolving, and so too must the capabilities of the governments that serve them. AI is not a replacement for real people doing real work—it’s a tool to help them do that work even better.  

How BerryDunn can help

The human aspect of projects can often be forgotten in the maze of regulatory changes and legal requirements with which organizations and government entities must comply. Whether we work with you from project inception or come in to refocus an initiative already underway, our team has the background to understand your needs, and the depth of project experience and technical expertise necessary to provide the guidance and support you need.

BerryDunn is not affiliated with any specific software vendor, allowing us to be truly objective. We stay abreast of the best solutions in the market, as well as industry best practices, emerging trends, and updates in the software vendor community. Our independence allows us to provide objective system consulting services and offer recommendations that serve your organization’s best interests. Learn more about our team and services. 

"The National Recreation and Parks Association’s (NRPA) Conference is just around the corner, and the annual conference can really be overwhelming, especially for first-year attendees," shares Rich Neumann, manager with BerryDunn's Parks, Recreation, and Libraries team. "Here you have direct access to the brightest minds in our industry exploring the hottest trends in parks and recreation." With the conference approaching (September 16-19 in Orlando), our team of consultants and former practitioners shares their proven strategies for navigating this landmark event. 

Plan smart, stay flexible 

"I'm a big fan of going in with a plan," explains Ryan Hegreness. "Usually, I review the education sessions a week before and use the NRPA app or my Outlook calendar to schedule sessions. I pick a primary and backup session for each time slot—but don't overschedule yourself. The best conference experiences often come from those spontaneous hallway conversations." 

Include the exhibit hall in your pre-planning, advises Jason Genck. “The exhibit hall can be overwhelming. If there are particular areas you want to visit to gain information and learn more, make a game plan ahead of time to be sure you stay focused. 

Maximize learning opportunities 

"Go to every session and take advantage of every opportunity," advises Jeff Milkes, who's attended since 1984. "Get there early—some sessions may be standing room only. Sit in the front. You'll get the most out of each session when you're not busy thinking about emails or deadlines back at the office. Use the NRPA app by selecting everything that appears interesting to you. Do this a few days in advance and ignore the schedule conflicts. Then whittle down your list and make the hard choices." 

Focus on practical solutions 

"If you're anything like me," Rich Neumann suggests, "you might want to consider prioritizing presentations that are heavy on storytelling through case studies. While theory is great, nothing compares to seeing new ideas put into practical use." 

When exploring technology solutions, Erin Provazek advises: "Come to the conference with an idea of the major pain points you have with your current system. But it's equally important to have an idea of the functionality that works really well for you." 

Network naturally 

"Don't underestimate the value of the coffee line," Nikki Ginger emphasizes, drawing from 15 years of conference experience. "I have met some incredible people and some lifelong friends... these casual conversations really can lead to some incredible knowledge sharing and problem solving." 

For introverts, Ryan Hegreness offers a practical tip: "Having a role at a conference or event helps me connect with people more easily. This can be serving as a volunteer, getting involved in planning, being a room host, or leading an education session." 

Practice self-care 

"It's important to take care of staying hydrated, eating well, and making sure you're getting some rest," Dannie Wilson advises, "so that you can really fully participate and enjoy all the conference opportunities." 

Nikki adds, "Don't try to do it all. Take a break when you can... practice self-care," whether that's exploring Lake Eola Park or finding a quiet moment with coffee. 

Listen to these and more tips on the "Let's talk parks with BerryDunn" podcast! 

Sessions presented by our team members 

We love to talk parks! Please join us at these sessions presented by our team and clients.  

Design Together, Build Together, Play Together 

Date: Monday, September 15, 2025 
Time: 8:00 – 11:00 a.m. 
Speaker(s): Lisa Paradis, Stacey Dicke 

From Data Chaos to Clarity: Streamline Operations with Dashboards 

Date: Tuesday, September 16, 2025 
Time: 2:45 – 3:45 p.m. EST 
Speaker: Becky Dunlap 

Lights, Camera, Action? Social Media for the Social Beginner 

Date: Tuesday, September 16, 2025 
Time: 2:45 – 3:45 p.m. EST 
Speaker(s): Johnathan Skinner, Nikki Ginger 

Thriving as an Introvert in an Extroverted Industry 

Date: Wednesday, September 17, 2025 
Time: 4:15 – 5:15 p.m. EST 
Speaker: Ryan Hegreness 

Should I Stay or Should I Go? 

Date: Thursday, September 18, 2025 
Time: 9:00 – 10:00 a.m. EST 
Speaker: Lisa Paradis 

“Squirrel!” …staying focused with a coworker who has ADHD 

Date: Thursday, September 18, 2025 
Time: 9:00 – 10:00 a.m. EST 
Speaker: Dannielle Wilson 

Tackle Them If You Have To: Rethinking Traditional Approaches to Community Engagement 

Date: Thursday, September 18, 2025 
Time: 2:30 – 3:30 p.m. EST 
Speaker(s): Ryan Hegreness, Rich Neumann 

And be sure to visit us at Booth 932! As Rich jokes, forget the typical conference swag—stop by for "really terrible hand-drawn portraits... the one souvenir everyone will be talking about and maybe even crying over." 

See you in Orlando! 

Innovative strategies for parks, recreation, and libraries 

BerryDunn's consultants work with you to improve operations, drive innovation, identify improvements to services based on community need, and elevate your brand and image―all from the perspective of our team’s combined 100 years of hands-on experience. We provide practical park solutions, recreation expertise, and library consulting. Learn more about our team and services.  

The FDIC has proposed raising several key regulatory thresholds, including those that determine which institutions must comply with Part 363’s audit and internal control requirements. The primary driver behind these proposed changes is the growth experienced by institutions since the original thresholds were set decades ago. Due to inflation, the proposal aims to cover a similar number of institutions as when the thresholds were originally set. For example, the proposed increase to $5 billion for the Internal Control over Financial Reporting (ICFR) threshold, as described below, would still cover approximately 75% of institutions today.  

In addition to increasing these thresholds, the proposal also recommends that the thresholds be automatically adjusted based on some inflationary factors going forward. While the changes are designed to ease compliance burdens for smaller institutions, they also come with a cautionary tale—they would reduce regulatory requirements, but not the risk. 

What the FDIC proposal means 

Under the proposal: 

• Approximately 800 institutions may find themselves newly exempt from Part 363 compliance due to changes in 24 regulatory asset thresholds. The following items are the most likely to be relevant for community banks:

  • Banks under $1 billion in total assets would no longer be required to: 

    • Create a separate audit committee as part of the institution’s board of directors

    • File annual reports 

  • Banks under $5 billion would no longer need to: 

    • Include management assessments or auditor attestations on ICFR 

    • Require the audit committee directors to be independent from management 

    • Require the audit committee directors to include members with banking or related financial management expertise, have access to its own outside counsel, or exclude large customers of the institution 

  • Audit committee independence criteria would increase from $100,000 to a $120,000 compensation threshold. This threshold would not be indexed against inflation as it is meant to align with the listing standards of national securities exchanges. 

• Parts 303, 335, 340, 347, and 380 would also have changes if this proposal is enacted: 

• Part 303 – de minimis thresholds: 

• Increased from $1,000 to $1,225 and from $2,500 to $3,500 for certain criminal offenses 

• Part 335 – Insider loan disclosures: 

• Raised the threshold from $5 million to $10 million 

• Parts 340 & 380 – Asset sales restrictions: 

• Raised the “substantial loss” threshold from $50,000 to $100,000, which could allow an increase in potential bidders who are eligible to purchase failed institution assets 

• Part 347 – International banking: 

• Raised limits for foreign underwriting and dealing from $60M to $120M and from $30M to $60M. This is less likely to have an impact unless you have foreign operations. 

Why ICFR still matters for community banks 

Even without a federal mandate, effective ICFR offers tangible benefits: 

1. Fraud prevention: Segregation of duties, account reconciliations, and control monitoring are critical to detecting and preventing fraud—especially in lean staffing environments. 

2. Operational efficiency and reducing material misstatements: ICFR can help identify process inefficiencies and reduce errors. It can also help with training, as processes tend to be more clearly documented when they are being tested on an ongoing basis. 

3. Regulatory confidence: Examiners still expect clear documentation of key controls and risk assessments—even if an ICFR opinion is no longer required. 

4. Merger and acquisition readiness: Strong internal controls enhance bank value in due diligence settings, especially in today’s consolidation-driven environment. 

5. Board-level accountability: Internal controls provide visibility into operational risk that supports informed governance and oversight. 

6. Preparing for the next threshold: Many hours have been spent getting your documentation ready for audits, including creating, updating, and monitoring your internal controls. Walking away from the effort already put forth would mean a significant amount of time and resources to re-establish your documentation and controls as you prepare for the next threshold. Keeping your current internal practices in place with annual updates and regular monitoring will help make that next transition as smooth as possible. 

What we recommend 

For banks that would be newly exempt under the FDIC’s proposed changes, we suggest a right-sized, risk-based approach: 

• Maintain documentation of your key accounting controls and processes, including reconciliations, journal entries, and credit loss provisioning. This documentation should be updated at least annually by control owners. 

• Conduct periodic walkthroughs of high-risk processes (e.g., wire transfers, loan approvals) to identify gaps, inefficiencies, and areas of documentation that need to be updated. 

• Leverage internal or outsourced testing of controls. The frequency of this testing will likely be dependent on your institution’s risk assessment of each operational area. 

• Educate your board on how ICFR practices support accountability, even without formal reporting requirements. 

• Create a compliance checklist related to threshold changes to stay up-to-date with compliance requirements going forward: 

• Indexing monitoring plan 

• Establish a process to track inflation-based threshold changes: 

• Every 2 years, or 

• More frequently if the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) rises above 8%. Thresholds will not be reduced in deflationary periods. 

• Assign responsibility for monitoring CPI-W and updating compliance scope 

• Governance and board oversight 

• Reassess audit committee composition and independence under new thresholds 

• Review director compensation against the $120,000 independence threshold 

• Document any changes to board and/or audit committee structure or oversight responsibilities 

• Audit planning adjustments 

• Revise audit scope and frequency based on updated regulatory requirements 

• Coordinate with external auditors to align expectations and engagement terms 

• Adjust risk assessments to reflect changes in compliance burden and oversight 

• Reporting and documentation 

• Ensure proper documentation of decisions not to file Section 19 applications due to new thresholds 

• Maintain records of threshold applicability reviews and indexing updates 

• Prepare for potential regulatory inquiries regarding compliance scope changes 

• Stakeholder communication 

• Brief the board on regulatory changes, compliance impacts, and audit committee implications 

• Provide training or guidance to relevant teams (e.g., HR, compliance, finance) 

Final thoughts 

We understand the burden of ICFR compliance—and for many small banks, the relief reduces their already heavy regulatory burden. However, a move to step away from a well-established control environment has the potential to create downstream issues you might not see until it’s too late. 

Strong internal controls are not just a box to check for regulators and auditors—they're a tool for protecting your institution, your people, and your reputation. Regulators, investors, and auditors still care about the strength of your bank’s control environment—whether or not it's required by regulation. 

Maintaining strong internal controls remains a best practice—and a strategic imperative. Both are essential to your bank’s resilience, integrity, and long-term success. 

Let’s talk 

If your bank is approaching a new threshold or deciding whether to scale back ICFR documentation, we’d love to help you build a right-sized internal control approach that matches your risk profile. Reach out to our team with questions. 

Changes are brewing in the healthcare industry due to far-reaching federal reforms. With the One Big Beautiful Bill Act (OBBBA) now signed into law—alongside Executive Orders (EO), judicial rulings, and other federal actions—providers are facing a wave of new requirements and opportunities. This article highlights some of the changes affecting the industry and offers a comprehensive, downloadable summary for a closer look at key impacts. 

Overview of OBBBA impacts 

• A new Rural Health Transformation Program has been created to address anticipated losses faced by rural health providers due to the cuts to Medicaid. 

• Significant changes to Medicaid, including:  

• New work requirements 

• Increased eligibility redetermination requirements

• Provider taxes 

• State-directed payments 

• Physician fee schedule 

• Affordable Care Act: Enhanced advanced premium tax credits will expire December 31, 2025.  

Other federal reforms impacting healthcare 

• Tariffs: Expected to increase costs for medical devices and pharmaceuticals made in Mexico, Canada, China, and other nations facing double-digit tariffs. 

• Pharmacy Benefit Manager (PBM)/Pharmacy ownership: Federal court blocked an Arkansas law that called for an end to PBM vertical integration. 

• US Department of Health and Human Services layoffs: The US Preventive Services Task Force is being considered for potential layoffs. 

• Health insurance premiums: Commercial health insurance companies are seeking double-digit increases for premiums for the upcoming year, as well as assessing the viability of their governmental plan offerings. 

For an in-depth look at the impacts of the OBBBA, EOs, and other federal government and judicial actions affecting the healthcare industry, we encourage you to download this full summary created by BerryDunn's industry experts. 

Our healthcare team will continue to monitor developments and offer guidance to help you navigate the changes.  

About BerryDunn 

From labor shortages to regulatory changes, today’s healthcare organizations face greater challenges than ever. Our audit, tax, clinical, and consulting professionals, focused on specific healthcare industry areas, understand these challenges and are committed to helping you meet and exceed regulatory requirements, maximize your revenue, minimize your risk, improve your operations—and most importantly—facilitate positive outcomes. Learn more about our team and services.