year-end

audit

The US Department of Health and Human Services Office of Inspector General (HHS-OIG) has been actively enforcing healthcare compliance and fraud prevention in 2025. Here’s what healthcare providers need to know.  

Recent enforcements 

In April, there were three enforcement actions taken against providers who have breached their integrity agreements. 

1. April 3, 2025: $22,000 penalty 

2. April 17, 2025: $74,000 penalty  

3. April 18, 2025: $1,600 penalty 

Due to the cumbersome nature of corporate integrity documents, BerryDunn encourages its clients to revisit these documents often to help ensure important deadlines are met.  

Increased enforcement areas 

There has been a noticeable uptick in enforcement for two areas in particular—wound care and incident-to billing.  

Skin substitutes have also landed on the OIG work plan this year. 

• Medicare Part B payments for skin substitutes 

• Implementing average sales price reporting requirements for skin substitutes 

Clients have been flagged by payers for issues with claims and disclosure of rebates and discounts. CMS has decided to delay finalizing the proposed LCD (Local Coverage Determination) for skin substitute grafts and cellular/tissue-based products used in the treatment of chronic non-healing wounds until January 2026. However, we don’t anticipate this will reduce the number of audits.  

Incident-to billing continues to be a hot topic and one of confusion for many clients. Organizations may want to consider having a third-party probe audit to help ensure appropriate coding and clinical documentation.  

BerryDunn’s healthcare compliance team incorporates deep, hands-on knowledge with industry best practices to help ensure your operation is compliant and efficient. Learn more about BerryDunn’s team and services. 

Read this if you are a board member or c-suite executive of a community bank.

When it’s time to change auditors, it’s important to find a firm that feels like a long-term partner—one you can grow with over time. The key to finding that fit is asking the right questions up front. Before moving forward with a firm, make sure you’re comfortable with their answers to the following: 

1. Does the firm have experience in your industry? 
   Look for an audit partner who understands the specific challenges and technical requirements of your industry. Experience in your sector ensures a more accurate and efficient audit while reducing the risk of audit failures, such as independence issues or incorrect implementation of new accounting standards. Audit failures can be costly and erode confidence with your board, investors, and regulators. 
    
2. Has the firm worked with organizations similar to yours? 
   Familiarity with your size, structure, and operations allows the audit team to navigate the process more effectively, saving you time and effort. 
    
3. Does the firm stay current with relevant financial reporting requirements? 
   With regulations constantly changing, your auditor should stay up-to-date and proactively inform you of any updates that might impact your organization. Reviewing a firm’s content and resources can give you an idea of how invested they are in keeping current. 
    
4. Is the audit process efficient and minimally disruptive? 
   Choose a firm with systems and experience that allow them to conduct a thorough audit without placing unnecessary strain on your team. 
    
5. Do you have year-round access to the audit team? 
   A good audit partner offers ongoing support and is available for consultation throughout the year, not just during the audit. In a world where change is constant, partnering with a firm that keeps you informed year-round is invaluable. 
    
6. Does the firm offer additional specialized services? 
   As your organization grows, so will your needs. A firm that offers a broad range of services can support you well beyond just the audit. 
    
7. Is the firm selective about its clients? 
   A reputable audit firm carefully chooses its clients, focusing on industries where they have proven expertise and can deliver true value. 
    
8. What do their clients say about them? 
   This is all about culture. Does the firm "do the right thing" when it matters? Do they value integrity, curiosity, and relationships? A firm that treats its clients with respect and operates with integrity will provide lasting value. 

A great audit partner empowers you, educates you, and supports you through changes with confidence. They work hard to do things the right way—because when it comes to financial institutions, that’s the only way. 

Take the stress out of your next audit 
Audits don’t have to be stressful. When switching audit firms, the right support makes all the difference. Choosing a financial services provider is more than just a business decision—it’s a relationship that can significantly impact your financial future. Take your time, ask the tough questions, and prioritize trust, expertise, and alignment with your long-term goals.  

At BerryDunn, we’re here to make the process smoother, easier, and a lot less stressful. Our Financial Statement Audit team helps you stay prepared, minimize disruption, and feel confident that you’re doing the right thing—for your business, your stakeholders, and your peace of mind. 

Learn more about our team and services.  

Read this if you work in management at a higher education institute or another nonprofit organization. 

On May 5, 2025, the US Department of Education (ED) issued a Dear Colleague Letter (DCL) to higher education institutions. The DCL outlined current default rates for federal student loans and the expected impact on these rates with the resumption of collection efforts on defaulted loans. ED suspended collection efforts on these loans in March 2020 to help combat the economic crisis created by the COVID-19 pandemic. According to ED, an estimated 25% of individuals currently in repayment are in default or significantly delinquent. It’s important to take a closer look at the impact increased default rates could have on higher education institutions and other nonprofit organizations, and how to remain compliant. 

Impact on higher education institutions 

Federal regulations require higher education institutions to track and maintain low cohort default rates (CDR). If an institution has a CDR higher than 40% in a single year or exceeds 30% for three consecutive years, the institution will lose their eligibility to receive federal student assistance. ED’s resumption of collection efforts on defaulted federal student loans is expected to increase institutions’ CDR.  

The DCL emphasizes the role institutions play in contacting former students to remind them of their responsibility to repay their federal student loans. If an institution were to become ineligible to receive its annual federal student assistance, funding would severely impact the institution’s ability to continue operations.  

The CDR regulation is three years in arrears, which means the 2026 default rate will include students who entered into repayment in 2023. Based on this, institutions should: 

• Start contacting former students in repayment before 2026 to help them avoid defaults 
• Monitor their CDR continuously to mitigate the risk of becoming noncompliant with federal regulations and to reduce the risk of losing eligibility to receive federal student assistance funding 

Impact on other nonprofit organizations 

While higher education institutions bear the direct impact of increased default rates on federal student loans, other nonprofit organizations should also be aware of how these defaults could affect their operations. Many former students with federal student loans work at nonprofit organizations, which often receive various forms of federal assistance. These organizations must verify that federal funds are not paid to businesses or individuals, including employees, who are suspended or debarred by the federal government. This is because suspension or debarment can result from defaulting on federal student loans, as well as for other reasons.  

As more individuals are expected to default, the list of those debarred or suspended from receiving federal payments could grow. Nonprofits are required to periodically review their vendors and employees to verify they are not suspended or debarred. If identified as such, these vendors and employees would be ineligible to receive any payment for goods or services, including wages, through federal funding, including Medicaid.

It's crucial for nonprofit organizations to regularly monitor the suspension and debarment list, which frequently changes, to maintain compliance. Organizations can support their employees by communicating the importance of making student loan payments and avoiding default. Helping employees understand how their student loan payments can impact their employment may encourage timely payments and prevent defaults.  

With collection on default federal student loans back in effect, it’s imperative that higher education institutions and other affected nonprofits follow these strategies to ensure compliance. Learn more about BerryDunn’s team and services. 

After an intense overnight session, the US House of Representatives narrowly passed the "One Big Beautiful Bill Act" with a 215-214 vote, marking a significant milestone in fiscal policy reform. The bill, which now heads to the Senate for further consideration, proposes extensive tax changes alongside broader regulatory shifts. While House Republicans and the current administration champion the bill as a legislative victory, Democratic opposition remains strong, and modifications are expected before it reaches the president’s desk.

Major tax provisions

At the heart of the legislation is a sweeping restructuring of federal tax policy. The bill seeks to permanently extend key tax cuts from 2017, while also introducing temporary incentives aimed at stimulating economic growth.

• Locking in individual and estate tax cuts.
• Tax reductions from the 2017 Tax Cuts and Jobs Act (TCJA) will become permanent, preventing their previously scheduled expiration.
• The estate tax exemption will rise to $15 million, adjusted for inflation, allowing high-net-worth individuals to transfer wealth with fewer tax burdens.

Temporary benefits for workers and families (expiring in 2028)

Acknowledging the financial pressures facing American households, the bill introduces several temporary tax incentives:

• Exemptions on tips and overtime compensation, providing relief to service workers and those reliant on extra income.
• Tax-exempt status for interest on specific US-assembled automobile loans, potentially lowering borrowing costs.
• An increase in the standard deduction: an additional $1,000 for individual filers ($16,000 total) and $2,000 for joint filers ($32,000 total).
• A boost to the child tax credit, raising it by $500 to $2,500 per child for tax years 2025 through 2028.

Expanding deductions for high-tax states

One of the bill’s most anticipated revisions is its adjustment of the state and local tax (SALT) deduction cap:

• The cap will increase from $10,000 to $40,000 for households with adjusted gross incomes up to $500,000, alleviating tax burdens in high-tax states.
• For higher-income earners, the deduction gradually phases down, limiting revenue losses for the federal government.

Business tax reforms and incentives

Businesses are among the biggest beneficiaries of this legislation, with several key tax advantages aimed at stimulating investment and innovation.

Encouraging capital investments

• The bill restores 100% bonus depreciation for eligible assets acquired between January 20, 2025, and 2029, allowing businesses to fully deduct the cost upfront.
• The Section 179 deduction cap is raised to $2.5 million, encouraging companies to reinvest in equipment and infrastructure.
• Pass-through entities will see a qualified business income (QBI) deduction increase from 20% to 23%, reducing tax liabilities for small business owners.

Modernizing research and development (R&D) tax treatment

To foster innovation, the legislation reshapes R&D deductions:

• Businesses investing in domestic research can either deduct costs immediately or amortize them over 60 months.
• Foreign R&D costs remain unchanged, reflecting concerns about outsourcing innovation.

More favorable business interest deductions

Under IRC Section 163(j), companies can now add back depreciation, amortization, and depletion when calculating limits on interest deductions, helping firms that rely on capital financing.

Controversial provisions and policy shifts

While many business owners welcome the tax incentives, other aspects of the bill have sparked debate—particularly those affecting environmental initiatives and international taxation.

Scaling back clean energy tax credits

Several clean energy tax credits from the Inflation Reduction Act (IRA) are now subject to elimination or accelerated phase-out.

• Supporters argue that this move reduces unnecessary subsidies.
• Environmental groups warn that these rollbacks could slow the transition to renewable energy and discourage green investments.

Targeting "unfair foreign taxes"

A new provision, Proposed Section 899, is designed to address foreign tax policies:

• It imposes higher US tax rates on individuals from nations that impose restrictive or unfair taxes on American citizens or corporations.
• Critics view this measure as potentially fueling trade tensions and diplomatic disputes.

Excise tax on remittances

A 3.5% excise tax will now apply to remittances sent by non-US citizens to family members abroad.

While proponents frame this as a revenue-generating strategy, opponents argue that it disproportionately affects immigrant communities.

What happens next?

As the bill moves to the US Senate, its fate remains uncertain. While Republicans tout its provisions as an economic boost, Democratic lawmakers continue to scrutinize its potential effects on income inequality, environmental sustainability, and trade relations.

Taxpayers—whether individuals or businesses—should pay close attention as amendments emerge. With negotiations underway, the final legislation could see additional revisions, altering tax credits, deductions, and corporate incentives.

For now, those impacted by the bill should begin assessing how these provisions align with their financial strategies, preparing for potential tax shifts in the coming years.

BerryDunn's tax consulting and compliance team brings deep experience and extensive resources to each client’s unique tax situation. We work closely with you to develop comprehensive, coordinated strategies to ensure tax compliance, limit exposure, and optimize performance. Learn more about our team and services. 

Read this if your company is considering financing through a sale leaseback.

In today’s economic climate, some companies are looking for financing alternatives to traditional senior or mezzanine debt with financial institutions. As such, more companies are considering entering into sale leaseback arrangements. Depending on your company’s situation and goals, a sale leaseback may be a good option. Before you decide, here are some advantages and disadvantages that you should consider.

What is a sale leaseback?

A sale leaseback is when a company sells an asset and simultaneously enters into a lease contract with the buyer for the same asset. This transaction can be used as a method of financing, as the company is able to retrieve cash from the sale of the asset while still being able to use the asset through the lease term. Sale leaseback arrangements can be a viable alternative to traditional financing for a company that owns significant “hard assets” and has a need for liquidity with limited borrowing capacity from traditional financial institutions, or when the company is looking to supplement its financing mix.

Below are notable advantages, disadvantages, and other considerations for companies to consider when contemplating a sale leaseback transaction:

Advantages of using a sale leaseback

Sale leasebacks may be able to help your company: 

• Increase working capital to deploy at a greater rate of return, if opportunities exist
• Maintain control of the asset during the lease term
• Avoid restrictive covenants associated with traditional financing
• Capitalize on market conditions, if the fair value of an asset has increased dramatically
• Reduce financing fees
• Receive sale proceeds equal to or greater than the fair value of the asset, which generally is contingent on the company’s ability to fund future lease commitments

Disadvantages of using a sale leaseback

On the other hand, a sale leaseback may:

• Create a current tax obligation for capital gains; however, the company will be able to deduct future lease payments.
• Cause loss of right to receive any future appreciation in the fair value of the asset
• Cause a lack of control of the asset at the end of the lease term
• Require long-term financial commitments with fixed payments
• Create loss of operational flexibility (e.g., ability to move from a leased facility in the future)
• Create a lost opportunity to diversify risk by owning the asset

Other considerations in assessing if a sale leaseback is right for you

Here are some questions you should ask before deciding if a sale leaseback is the right course of action for your company: 

• What are the length and terms of the lease?
• Are the owners considering a sale of the company in the near future?
• Is the asset core to the company’s operations?
• Is entering into the transaction fulfilling your fiduciary duty to shareholders and investors?
• What is the volatility in the fair value of the asset?
• Does the transaction create any other tax opportunities, obligations, or exposures?

Accounting for sale leaseback transactions under Accounting Standards Codification (ASC) Topic 842, Leases, can be very complex with varying outcomes depending on the structure of the transaction. It is important to determine if a sale has occurred, based on guidance provided by ASC Topic 842, as it will determine the initial and subsequent accounting treatment.

The structure of a sale leaseback transactions can also significantly impact a company’s tax position and tax attributes. If you’re contemplating a sale leaseback transaction, reach out to our team of experts to discuss whether this is the right path for you.