Skorton to leave Cornell for Smithsonian post in 2015

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ITHACA — Dr. David Skorton, president of Cornell University, will leave in mid-2015 to become the next secretary of the Smithsonian Institution, the university announced on March 10. Smithsonian Institution, located in Washington, D.C., is the world’s largest museum and research complex, Cornell said in a news release. Cornell is Central New York’s largest employer, […]

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ITHACA — Dr. David Skorton, president of Cornell University, will leave in mid-2015 to become the next secretary of the Smithsonian Institution, the university announced on March 10.

Smithsonian Institution, located in Washington, D.C., is the world’s largest museum and research complex, Cornell said in a news release. Cornell is Central New York’s largest employer, according to CNYBJ Research.

The Smithsonian board of regents voted to approve Skorton’s appointment on March 9, Cornell said.

Skorton, who is also a board-certified cardiologist, will remain president and continue all the duties and activities of his office at Cornell through June 30, 2015, the university said.

Skorton and his wife, professor Robin Davisson, will relocate to Washington, D.C.

In reaction to the announcement, Skorton said in the Cornell news release that he is “honored to be chosen.”

“The mission of the Smithsonian, ‘The Increase and Diffusion of Knowledge,’ resonates deeply with me and mirrors the collective mission of the remarkably talented community of scholars, students and staff with whom I have had the privilege to collaborate at Cornell these past eight years. While I look forward to beginning my new assignment, I am delighted that the timing will enable me to commemorate Cornell’s sesquicentennial as president,” Skorton said.

Robert Harrison, chairman of the Cornell University board of trustees, in the news release called Skorton’s tenure at the school “stellar.”

“When he departs next year, he will leave Cornell in a historically strong position, having regained its financial stability, elevated its rankings across key disciplines, increased student access, and greatly expanded its presence in New York City and around the world,” Harrison said.

Harrison will soon appoint a committee to lead the search for Cornell’s 13th president, the school said.

Skorton became Cornell’s president on July 1, 2006. He holds faculty appointments as professor in the departments of medicine and pediatrics at Weill Cornell Medical College in New York City and in biomedical engineering in the College of Engineering on Cornell’s Ithaca campus.

In addition to his work as an administrator and a cardiologist, Skorton is also a biomedical researcher, musician, and an advocate for the arts and humanities, Cornell said.

Skorton earned his bachelor’s degree in psychology in 1970 and his medical degree in 1974, both from Northwestern University.

He completed his medical residency and fellowship in cardiology at the University of California, Los Angeles, according to Cornell.

Contact Reinhardt at ereinhardt@cnybj.com

UnitedHealthcare Community Plan adds four Upstate counties to service area

Health Care, Subscriber Only

UnitedHealthcare (UHC) Community Plan announced it has added four additional upstate New York counties to its service area for Medicaid Managed Care and Family Health Plus. The addition of Lewis, Seneca, Wayne, and Ontario counties brings the number of New York counties in the service area for UHC Community Plan to 38, the health insurer

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UnitedHealthcare (UHC) Community Plan announced it has added four additional upstate New York counties to its service area for Medicaid Managed Care and Family Health Plus.

The addition of Lewis, Seneca, Wayne, and Ontario counties brings the number of New York counties in the service area for UHC Community Plan to 38, the health insurer said in a news release.

Medicaid Managed Care and Family Health Plus are state-government sponsored health-insurance programs, UHC added.

The programs are available throughout Central and Western New York, along with the Hudson Valley, Long Island, and in New York City, according to UHC.

In addition to Lewis, Seneca, Wayne, and Ontario, the 38 counties also include Broome, Cayuga, Chemung, Chenango, Clinton, Herkimer, Jefferson, Madison, Oneida, Onondaga, Oswego, St. Lawrence, and Tioga in Central New York and the Southern Tier.

Additional counties include Albany, Bronx, Chautauqua, Columbia, Essex, Fulton, Genesee, Kings, Monroe, Nassau, New York, Niagara, Orange, Queens, Rensselaer, Richmond, Rockland, Suffolk, Ulster, Warren and Westchester, UHC said.

UnitedHealthcare Community Plan offers programs for adults and children who may qualify for Medicaid and Child Health Plus. These programs offer “comprehensive” health coverage, including preventive care, primary care, hospitalization, prescriptions and other services, “often with little or no cost,” according to UHC.

UnitedHealthcare continues expanding its service area and wellness programs so more eligible New Yorkers and their families can access “affordable, quality” health-care [coverage], particularly preventive care, Pat Celli, president of UnitedHealthcare Community Plan of New York, said in the news release.

The company last August announced plans to hire more than 60 new employees to support its recent expansion in New York.

In that news release, UHC indicated it employs more than 4,000 people in 18 locations across New York, following “significant” expansion in its Kingston and Tonawanda locations during 2012.

The health insurer hired more than 1,000 employees to support growth at these two locations alone, the company said.

UnitedHealthcare, a business of Minnetonka, Minn.–based UnitedHealth Group, Inc. (NYSE: UNH), serves nearly 4 million New York residents with a care-provider network of 232 hospitals and more than 58,000 physicians and other health-care professionals statewide, the company said.

Contact Reinhardt at ereinhardt@cnybj.com

Attorneys discuss antitrust issues in Utica hospitals’ affiliation

Health Care, Insurance & Financial Services, Law, Accounting & Taxes, Subscriber Only

UTICA — The recently consummated affiliation agreement between Faxton St. Luke’s Healthcare (FSLH) and St. Elizabeth Medical Center (SEMC) in Utica was “all about the patient, quality of care, [and] reduced costs.” That’s according to Dale Worrall, an attorney with the Syracuse office of Harris Beach PLLC. Both Worrall and his colleague, attorney Justin Runke,

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That’s according to Dale Worrall, an attorney with the Syracuse office of Harris Beach PLLC.

Both Worrall and his colleague, attorney Justin Runke, helped the hospitals in the strategic-planning process and then served as transaction counsel, working with the facilities’ internal general counsels.

“We worked them in order to facilitate getting the deal done,” Runke says. They served as antitrust counsel as well, Worrall added. Their work included plenty of document drafting, according to Runke.

That work culminated in the March 6 formal announcement that FSLH and SEMC have affiliated as the Mohawk Valley Health System (MVHS). It will serve as the parent organization of both hospitals, the institutions said in a news release.

A new board of directors comprised of 18 members, with an equal number of members from the FSLH and SEMC boards, will govern MVHS. Scott Perra, president and CEO of MVHS, will oversee the management team for the system.

Antitrust issues
Before the hospitals reached their destination of a completed, formal affiliation agreement, they had to navigate considerable regulatory hurdles. When two of the primary hospitals in a given market combine, regulators worry that the merged organization would have the ability to dominate the market and increase prices, the Harris Beach attorneys say.

Such an outcome was “not at all” the purpose of this affiliation, says Worrall.

“The purpose of it was to create efficiencies to lower costs, to improve the quality of care for patients in that market,” he adds.

Still, the attorneys had to work with the hospitals to assure the Federal Trade Commission (FTC) and the office of New York Attorney General Eric Schneiderman that market dominance wasn’t the primary motivation, they say.

Schneiderman’s office on Dec. 11 announced a settlement with the Utica hospitals, resolving concerns that their proposed affiliation would adversely affect competition in the health-care market in the Utica–Rome region.

The overhead cost of operating two hospitals independently is “significant” in a service area the size of Utica–Rome, Runke says.

“To cut, consolidate that infrastructure, pull out some of the duplication in services, you can actually drive down the costs and create financial stabilization in that market to ensure that the consumers, the patients, have access to high quality health care,” he adds.

Both attorneys have worked with the hospitals for “about a year-and-a-half,” Runke says, noting that the work focused on both the facilities’ planning and the transaction.

Any time a merger of this nature, which involves consolidating this type of organization, state and federal officials will have concerns, Worrall says.

The transaction was very “transparent” in the marketplace, says Runke, noting the hospitals issued a press release indicating that they were talking and thinking about the transaction.

“That prompted the FTC to actually pick up the phone and call almost immediately,” Runke recalls.

As the process unfolded, Runke and Worrall spoke with the hospitals to learn about the purposes and the reason for the affiliation agreement.

They wanted to impress upon the hospitals that presenting their case to the regulators would be key

“We just have to make sure that the enforcement agencies, the FTC and the [attorney general’s] office, understand the benefits of this proposed transaction, and that’s what we did,” Worrall says.

Those attending the January meeting of the New York State Bar Association in New York City discussed the antitrust issues surrounding this affiliation agreement, according to Worrall.

In the context of health-care reform, Runke called this affiliation agreement “a big deal.”

The ongoing changes in the nation’s health-care system seem “to favor consolidation in health care,” he says. And with the passage of the Affordable Care Act, or Obamacare, in 2010, the anti-trust enforcement agencies “got interested in health care again,” Runke added.

He believes the affiliation of Faxton St. Luke’s Healthcare and St. Elizabeth Medical Center represents a “lesson to be learned.”

“If you’re willing to work with the enforcement agencies, and if you’re willing to demonstrate the true intent of what you’re trying to achieve and convince them that what you’re doing is in the interest of the patients, is in the interest of driving down health-care costs, of assuring access to quality health care in the communities where the patients live, [then] they’re willing to work with you,” Runke says.

Contact Reinhardt at ereinhardt@cnybj.com

Top 10 Things You Should Know About the New Medicare Surcharge Tax

Business Mentors, Health Care, Subscriber Only

This tax filing season brings a whole new tax to the mix: the Medicare surcharge tax. Since 2013 was the first year that this tax became applicable, taxpayers should pay close attention to its complex and untested rules. This article will highlight 10 areas of the new tax. 1. When does the Medicare surcharge tax

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1. When does the Medicare surcharge tax apply and who does it affect? The new tax is effective for tax years beginning after Dec. 31, 2012. It affects all individuals that have modified adjusted gross income (MAGI) of more than $250,000 for joint filers and $200,000 for those filing single. For trusts, the new tax kicks in at the highest tax bracket (only $11,960 for 2013 and $12,150 for 2014).

2. Earned income surcharge tax — the Medicare surcharge tax is actually two separate taxes. The first tax is a tax on earned income. The rate is 0.9 percent and is in addition to the 1.45 percent paid by wage earners or 2.9 percent paid by the self-employed. Earned income includes wages and self-employment income.

3. Net investment income (NII) tax — the second tax is a 3.8 percent tax on net investment income (or unearned income). Investment income is generally income such as interest, dividends, annuities, rent, and other income that is not derived in the ordinary course of a trade or business. It also includes gains from the disposition of property not in the ordinary course of a trade or business, such as gains from the sales of stocks, securities, and mutual funds. These amounts can be reduced by properly allocable deductions such as investment interest, investment expenses, and state and local taxes.

4. How is the Medicare surcharge tax calculated? Even though a taxpayer may be subject to the tax because his or her MAGI is over the threshold amount, it does not necessarily mean that all net investment income will be subject to the tax. The NII surtax is the lesser of: 1) net investment income, or 2) the excess of MAGI over the threshold amount ($200,000 for single taxpayers and $250,000 for married taxpayers). Similarly, the earned income tax (0.9 percent) applies only to earned income over the threshold amounts.

5. How does it affect those involved in renting real estate? For people renting real estate, the rules become very complex. In general, a taxpayer passively renting properties will be subject to the tax. However, for those in the real-estate business, it is possible that the NII tax will not apply. It is highly recommended that you speak to a tax adviser if your involvement in real estate is more than passive.

6. How does the Medicare surcharge tax affect trusts that accumulate income? Trusts that accumulate income and pay tax at the trust level are also subject to the tax. As mentioned earlier, because of the condensed tax brackets for trusts, they are subject to the tax at a much lower level ($11,960 in 2013).

7. What if you sell a pass-through entity? Owners of pass-through entities such as S corporations and partnerships will generally not be subject to the NII tax when they sell their interests in the business. The rules intend to exclude NII taxes from any gain on non-passive trade or business activities.

8. What if you sell your home? For income-tax purposes, there is a gain exclusion from income ($250,000 for single taxpayers and $500,000 for married taxpayers) on the sale of a primary residence in which a taxpayer owned and occupied it for two of the last five years prior to sale. This same exclusion applies to the NII tax. However, any gain above the exclusion is considered NII for this tax.

9. How does it affect your retirement income? There is an exclusion from the NII tax for distributions from retirement accounts. The exclusion applies to qualified retirement plans and annuity plans, tax-sheltered annuities, IRAs and Roth IRAs, and deferred-compensation plans under Code Sec. 457(b).

10. What if you have children subject to the “Kiddie Tax”? If a taxpayer elects to include a child’s unearned income on his or her return, this will expose that individual to the NII tax since the investment income would be treated as income of the parent.

The Medicare surcharge tax is a completely new tax in the Internal Revenue code, which is in addition to the income tax, the alternative minimum tax, and the self-employment tax. Since the rules are new, complex, and untried, complying with them can be difficult. Consulting a tax adviser is highly recommended.

Heather J. Leggiero, CPA, JD, is a partner and tax director of the Albany office of The Bonadio Group, where she oversees the firm’s tax department. Contact her at hleggiero@bonadio.com

Affordable Care Act enrollment climbs to 4.2M in February, HHS reports

Health Care, Subscriber Only

Total enrollment in private health-insurance plans through state and federal exchanges rose to more than 4.2 million as of March 1, the U.S. Department of Health & Human Services (HHS) reported on March 11. That’s up by 943,000 since Feb. 1, the agency said. The pace of sign-ups was below the 1.1 million registered in

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Common Sense Business Tips for Sales Professionals

Business Mentors, Subscriber Only

You cannot manage timeSo much has been written about time management that you hardly have the time to read about it. There are numerous time management programs, processes, and tools. However, you cannot manage time, no matter how hard you try. There are 24 hours in a day and they are ticking away, second by

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You cannot manage time
So much has been written about time management that you hardly have the time to read about it. There are numerous time management programs, processes, and tools. However, you cannot manage time, no matter how hard you try.

There are 24 hours in a day and they are ticking away, second by second, minute by minute, as you read this. You cannot save the hours or store them up. And when they are gone, they are gone! Never to be recovered. Never to be recycled and reused.

You cannot manage time, but you can manage your activities, what you do in the time you have. To successfully manage your activities, you only need to know two things: What to do first and what to do next.

To identify what to do, create a two-sided daily or weekly to do list. Label one side “Must Do” and the other side “Should Do.” On the must-do side, list all the things that are imperative. Tasks that must be completed. Things that are directly tied to your goals and responsibilities. On the should-do side, list all the tasks that should be done because they are important. Review each list and prioritize the items. Next, plan carefully and assign each task and the amount of time for completion.

Start with the must-do list. Begin with the highest priority item and do it now (today), without exception. When the time for that activity is up, stop, and move on to the next activity. If you continue to work beyond the predetermined time limit, you are stealing valuable time from the next task. If that project suffers because of insufficient time, you’ll soon be in debt to countless hours of time that will never come. When you complete the must do items, you can move on to the should-do items.

As time goes on, some of the things on the past should do list will transfer to the must do list, but you will evaluate them and make that decision, rather than leaving it to chance or the pressure of unorganized time. Ralph Waldo Emerson wrote, “Finish each day and be done with it…. Tomorrow is a new day.”

Get out of the slow lane
Like most sales professionals, you are probably concerned about how the economy will affect your business. You’re wondering how you’ll survive. Your survival instincts may be telling you to look for ways to conserve; to hang on to what you have and weather the storm. It may seem like the correct thing to do. But it’s not. When the economy is slowing down, you need to speed it up!

If the economic pie is getting smaller, you need to get a bigger piece just to maintain your current position. And, that won’t happen unless you pick up the pace, and do more. You need to be more visible, more credible, and more valuable to your clients and prospective clients. What can you do? Here are some suggestions:

Pick up the phone: With a slowing economy, it’s no time to be shy. Make prospecting calls. Beef up your prospecting plan. Contact former clients who have dropped off the radar. People out there need your products and services. Find them before your competitors do.

Be of service: Forget about making “sales calls” to existing clients. Instead, schedule “strategy sessions” to help them explore opportunities to grow their businesses. Being “of service” will not only cement the relationship, but it will also make your client more comfortable and more likely to introduce you to others who would appreciate the same level of service.

Network: Show up at social and business functions ready to talk about your business and how you are helping your clients grow despite the current economic conditions. Adjust your “30-second commercial” to reflect the current economic condition.

Get the message out: Speak at chambers of commerce, professional associations, and service organizations. Talks and presentations have proven to be effective low-cost or no-cost marketing tools. They increase your visibility and credibility.

Have you figured it out yet? What you need to do in a “bad” economy are the very same things you need to do in a “good” economy. But, you need to do them more skillfully and more frequently. Don’t let a slow economy slow you down.

Silence is golden — And it can ruin your business

Here today — gone tomorrow
Have you ever had customers drift away in silence? They did less and less business with you and then, without warning, they stopped doing business altogether. They didn’t complain. They didn’t raise a fuss. They didn’t make demands. They didn’t do anything — they just stopped buying from you.

Customers have a tipping point

There are customers who, experiencing a problem, become very vocal very quickly. They do make a fuss and they do make demands. And, they let you know exactly what it will take to retain their business. Be grateful for them. At least you know there is a problem and you have an opportunity to fix it.

But, there are other customers who become unhappy, bit by bit and over a long time. They appear to put up with problems or inconveniences until suddenly they are no longer buying from you. If they do say anything, it’s at the very last moment and then, if it’s at all possible to hold on to any part of the business, it will take a mammoth effort.

It’s a fact of life
Most companies lose customers over time. And so will you. Accept it. But, you do have some control over how many customers leave and how quickly.

Don’t wait for customers to complain.

Get your customers to complain
Part of your job is to find ways to uncover complaints before your customers reach their tipping point. Conduct quarterly performance reviews with your customers, asking them about your performance. Provide customer-satisfaction surveys. Make sure your customers know whom to contact at your company if they have a problem. When you provide your customers with channels through which to voice their concerns and complaints, you obtain valuable feedback for fixing existing problems and heading off future issues. And, your customers are much less likely to drift away in silence.

Trust is built on three elements: credibility, accessibility, and reliability.
Trust is obviously an essential element for obtaining a client and keeping that customer. When you ignore trust, you will lose a client.

So, what is “trust” and how do you develop it with prospects and preserve it when they become clients?

Credibility, whether we are talking about prospects or clients, refers to conveying a message that is relevant and demonstrates your understanding of the recipient’s situation. Today’s technology — websites, blogs, email, white papers, social media, webcasts, webinars, and online meetings — has made it easier than ever to get your message in front of a targeted audience. Wasting their time with information that doesn’t help them solve problems or further goals will do little to build trust and can erode the trust that has been established.

You must get your credible message in front of prospects, provide information for prospects when requested, and answer questions or resolve problems for clients as they occur. If they cannot “trust” that you’ll be there when they need you, then they won’t trust you. And, they won’t become clients or stay clients of your business.

Reliability, the third element of trust, is an essential ingredient for any relationship. If you make a commitment to a prospect or client, you must keep it. No excuses. Prospects and clients won’t trust you until they can rely on you to follow up and follow through as promised.

Whether we are talking about prospects and clients, or friends, family and colleagues, trust is an essential ingredient. When present, it can cement a relationship and when absent, cause it to crumble.

Sandler Training is a global training organization of more than 500 Sandler trainers located in major cities throughout the United States and more than 29 countries. Sandler Training Syracuse, led by Rick Olszewski, is located at 241 W. Fayette St. Contact him at (315) 451-8797 or email: rick.o@sandler.com

What to Expect and What to Ask Auditors

Business Mentors, Nonprofits, Subscriber Only

“If you have a job without aggravations, you don’t have a job.” — Malcolm Ford 1965 = $5 for small lawns, $10 for large lawns 1966 = Times Union delivery boy = $10 per week 1968-72 = Usher/Doorman at Shine Theaters = $1.60 per hour 1971 = Maintenance crew, Tobin’s Meatpacking = $3.72 per hour, graveyard

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“If you have a job without aggravations, you don’t have a job.” — Malcolm Ford

1965 = $5 for small lawns, $10 for large lawns

1966 = Times Union delivery boy = $10 per week

1968-72 = Usher/Doorman at Shine Theaters = $1.60 per hour

1971 = Maintenance crew, Tobin’s Meatpacking = $3.72 per hour, graveyard shift

1972 = Genesee Hospital = Clinical-lab technician, $4.25 per hour

1973 = Arthur Andersen = auditor, $11,400 annually

There you have it, the not-so illustrious career beginnings for yours truly.

In looking back, I find that the youth of today have nowhere near the variety of opportunities that I had. All of my early employment opportunities required me to interact with people at all levels of the socio-economic ladder. I attribute who and where I am today, after 40 years in public accounting, to have been the direct result of these employment experiences.

We now have an extremely tight job market and our youth communicate via social media rather than directly communicating with others. Not surprisingly, the youth of today face far greater challenges in forging career success.

As a segue to the topic of this column, I want to state that I had nothing to do with the Enron scandal that resulted in the demise of my once great employer, Arthur Andersen. The demise of Arthur Andersen resulted in Congress adopting the Sarbanes-Oxley Act in 2002 and launched a government obsession with board governance and oversight responsibilities.

As I mentioned in a previous column several months ago, New York Gov. Andrew Cuomo signed the “Non-Profit Revitalization Act of 2013” into law. The provisions of this legislation represent the most significant modifications to New York’s nonprofit laws in the past 40 years. The new law, effective July 1, 2014, expands board-governance responsibilities in many areas, including conflicts of interest, related-party transactions, executive compensation, and board interactions with external auditors. Now, more than ever, every auditor must have the ability to clearly communicate in an articulate and informative way to satisfy the needs and expectations of a volunteer tax-exempt board.

I know and have 40 years’ experience as an auditor in the tax-exempt sector. Therefore, the purpose of this column is to raise the awareness of board volunteers and management team members in the nonprofit sector regarding interactions, communications, and transparency with your external audit firm. All members of the CPA audit profession must be approaching their tax-exempt client audits with the knowledge that the bar of regulatory and client expectations has been raised considerably.

Since many tax-exempt organizations are completing their year-end financial statement audits, this column is devoted to recommendations regarding the proper involvement and communication between board members and external auditors. Use this year’s meetings with your audit committee and board to ensure that your nonprofit is in compliance with these new regulatory requirements.

Nonprofit board and management team members need the following information to understand, evaluate, and modify current board governance and fiscal-oversight policies. One thing is clear from the requirements of the Non-Profit Revitalization Act and the federal Sarbanes-Oxley Act — the strategic requirements for establishing and maintaining effective board governance require the following.

Establish and maintain an effective internal-control environment.
Implement or modify appropriate board governance and oversight policies and procedures in accordance with the Non-Profit Revitalization Act.
Maintain an appropriate focus on your regulatory-compliance function.
Last, but certainly not least, increase your expectations and interactions with your external auditors to ensure your organization obtains maximum value for your audit costs

The following is a brief summary of what to expect from your auditors, and more importantly, what to ask them.

What to expect
1. Under the Non-Profit Revitalization Act, auditors are required to meet with the full board or its designated audit committee twice each year. Once to review the audit scope, plan, and risk areas identified by the audit firm. The second meeting is typically focused on a presentation and analysis of results, as described further below.

2. Auditors are required to communicate certain matters mandated by auditing standards — SAS No. 114. This report will cover many areas, including important disclosures related to audit adjustments, management estimates used in preparing the financials, fraud/illegal acts discovered in the audit, internal control weaknesses, and any unusual accounting adjustments reflected in the financial statements. This required document is a qualitative assessment of the audit process.

3. Auditing standards have continued to emphasize the auditor’s responsibilities in communicating internal-control recommendations. If you receive a material weakness or significant deficiency comment, it should include specific discussion with the auditor and a prescribed timeframe for corrective action.

4. Auditors are required to report internal-control weaknesses and recommendations identified during the audit process. If your organization has not received internal-control recommendations in a formal management letter, ask the auditors why. The absence of a management letter should not be interpreted as perfection in your internal-control procedures.

5. The audited financial statements, with required footnote disclosures, are virtually unintelligible and mind-numbing to the typical reader lacking formal accounting expertise. At a minimum, the board should understand what type of audit opinion has been provided — unmodified or modified — and whether any new or revised footnote disclosures have been included.

6. In addition to these required reports, many quality oriented audit firms will provide value-added information to board and management, as follows:

Discussion and analysis of financial results for the year by program/service component.
Multi-year comparison of key financial ratios and operating indicators in comparison to industry targets/benchmarks.
Summary of additional audit procedures performed to address the risk of fraud and illegal acts.
An assessment of the quality and level of audit preparation by internal financial staff.
A summary of operating and/or strategic issues that the board should consider for further discussion.

A clear and comprehensive audit report communicated to the board or its designated committee is a critical component of effective board governance and oversight.

What to ask your auditors?
Finally, board members should ask questions of their auditors. The following is my “Top 10” list of questions to ask auditors:

1. What was the surplus (deficit) for the year by program or service component and how were deficits subsidized?

2. Is there a balance on the bank line of credit at year-end and why?

3. How many days revenue are outstanding in accounts receivable, and is the number appropriate for our industry segment?

4. What percentage of total expenses has been incurred for administration and overhead, and are we in compliance with the governor’s Executive Order No. 38?

5. Are vendor payments, required payroll-tax deposits, and retirement-plan contributions being made in a timely fashion?

6. What was the amount of capital purchases for the year and the net change in outstanding debt obligations (that is, how much was financed of total capital purchases)?

7. What government-sponsored regulatory reform initiatives (example: managed care) and/or enforcement audits (example: OMIG/OIG) are in process, and has any liability settlement been recorded?

8. How does the external auditor assess our financial statements in the spectrum from conservative to aggressive in terms of accounting presentation (example: bad-debt reserve)?

9. What concerns, if any, do you have regarding the adequacy of our internal controls or the competency of our financial staff?

10. Are there any new or pending accounting pronouncements or standards that will have an impact on our organization?

The questions above represent examples of the types of discussion that are important dialogue between board members and audit representatives. In addition, at least once each year, the auditors should meet with the independent board members/audit committee in executive session. As a standard process, this approach establishes a healthy environment for communication directly between the board and your audit firm.

Finally, make sure that you have implemented the necessary policy and procedure changes to be in compliance with the Non-Profit Revitalization Act prior to July 1, 2014.

Your bottom-line objective should be to achieve transparency and accountability in a practical and SAFE manner.

Scalable
Affordable
Feasible
Enforceable

Gerald J. Archibald, CPA, is a partner in charge of the management advisory services at The Bonadio Group. Contact him at (585) 381-1000, or email: garchibald@bonadio.com

The Election-Year Scurry

Opinion, Subscriber Only

Don’t you love elections? In the campaigns for the important ones, we get to see frantic tap dancing. We get to see some foaming at the mouth. This year’s campaigns promise to entertain. In New York, we already see our Governor Andrew Cuomo moving to the right. He knows he has most Democrats’ votes in

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Don’t you love elections? In the campaigns for the important ones, we get to see frantic tap dancing. We get to see some foaming at the mouth.

This year’s campaigns promise to entertain. In New York, we already see our Governor Andrew Cuomo moving to the right. He knows he has most Democrats’ votes in the bag. Now if he can just win over some Republicans. Then he could boast that he can win votes from both sides of the street. If Hillary Clinton does not run, he could use such credentials to win the nomination to run for the White House.

So to burnish those credentials, he is standing tall for charter schools, and staring down the teachers’ unions. This will earn him more votes from the right for sure.

In this year’s elections for Congress, we will see many Republicans run. We will see many Democrats scamper, and scurry, and hide. Those in close elections must run from Obamacare. Majorities of voters tell pollsters they just don’t like it.

So what do you do if you are a Democrat in a district where a few votes could end your career? When Obamacare comes up, you change the subject. You talk with your armpit about making changes. If you voted for it, you are in real trouble.

The president has postponed this provision and delayed that provision. Twenty-five times or more. To little avail. His shenanigans have not moved the needles in the polls. Ten layers of lipstick and rouge cannot silence the oinks of this one. If you are a Dem in a close race, you have to live with it. Or, the opposite.

Meanwhile, if the president’s plane flies over your district, you leap into a bomb shelter. When his name comes up, you pretend you are deaf. You sure don’t invite him to your campaign rallies. Not if you want to win, you don’t. His approval ratings are down as low as 38 percent in one recent poll and averaging about 43 percent across the board.

A lot of Dems are squeezed between the proverbial rock and a hard place for the upcoming campaign.

Meanwhile, we can already hear a few war cries for the 2016 election for the White House.

Likely candidate Ted Cruz has called for the end of the IRS as we know it. Now, normally only extremists applaud this idea. But this time around?

It is clear to a lot of folks that this administration used the IRS to punish its conservative opponents. It has battered opponents of this administration with audits. It green-lighted most liberal groups that applied for tax-free status. It held up the process for 200 conservative groups. Held them at bay for two election cycles. This sort of stuff frightens folks. Sickens some.

The president told Bill O’Reilly there was “not even a smidgen of corruption” in this scandal. A few days later, the woman who headed up that department took the

Fifth before a congressional committee. The purpose of the Fifth is to protect your backside from prosecution — for criminal activities. Or if you are a heroine, to protect others. Right down to the last smidgen. Note that the word incriminating has “crim” in it. As does the word criminal.

My point is that the idea of abolishing the IRS could become very popular the next few years. Along with another idea Cruz presented: Permanently banning former members of Congress from lobbying members of Congress.

He proposed repealing every word of Obamacare. He proposed term limits for federal lawmakers.

Majorities of voters tell pollsters they like these ideas. Which should make for some very entertaining election campaigns the next few years.

From Tom…as in Morgan.

Tom Morgan writes about political, financial, and other subjects from his home near Oneonta, in addition to his radio shows and new TV show. For more information about him, visit his website at www.tomasinmorgan.com

Spirit Airlines CEO to deliver keynote address at CenterState CEO annual meeting

Energy, Environment & Sustainability, Manufacturing & Engineering, Sports, Entertainment & Tourism, Technology

SYRACUSE — CenterState CEO announced that Ben Baldanza, president and CEO of Spirit Airlines, will deliver the keynote address at its annual meeting on April

Letter to the Editor: Quality pre-K is a critical opportunity

Opinion, Subscriber Only

Editor’s note: The authors say they wrote this letter in response to the editorial by Norman Poltenson, entitled, “Pre-K is a failure, so let’s make it universal” in the Jan. 31 issue of The Central New York Business Journal. There is overwhelming, research-based evidence that early education creates critical opportunities, especially for at-risk children living

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Editor’s note: The authors say they wrote this letter in response to the editorial by Norman Poltenson, entitled, “Pre-K is a failure, so let’s make it universal” in the Jan. 31 issue of The Central New York Business Journal.

There is overwhelming, research-based evidence that early education creates critical opportunities, especially for at-risk children living in poverty. Studies have shown that it more than pays for itself in long-term life improvement impacts, such as lower arrest rates and improved graduation rates, which were not measured by the [federal government’s] Head Start impact study.

There have been numerous reports that actually demonstrate positive impacts from the Head Start program. Eliana Garces’ (UCLA) and David Deming’s (Harvard) rigorous studies determined that Head Start graduates were more likely than their peers to graduate from high school and attend college, and less likely to be unemployed. Another study by Jens Ludwig (University of Chicago) discovered that reduced childhood mortality was a result of Head Start participation, due to various early screening processes and appropriate treatment referrals.

A researcher from the University of California learned that parents of Head Start attendees are much more likely to spend additional time reading to their children and taking them to museums, thus enhancing their overall educational experience. Even dads who did not live with their families ended up spending an extra day a month with their children. Alternate early education initiatives were found to have similar long-term positive outcomes.

As Nicholas Kristof points out in his recent New York Times article, on which much of this background information is based, preschool could be the only national issue that has a majority of support from voters of both parties. In our region, Senator [Kirsten] Gillibrand (D) and Congressman [Richard] Hanna (R) have joined together to sponsor legislation that expands access to pre-kindergarten programs nationwide.

“High-quality early learning guarantees a reduction in spending on entitlements, welfare, and incarceration,” U.S. Representative Hanna said. “It also lowers obesity rates, helping to reduce health-care costs. By focusing on early education, we can begin to break the back of intergenerational poverty, producing more taxpayers and a more competitive America through a better-educated, growing middle class. We cannot guarantee every child equal success in life, but we can promise them the opportunity to be successful.”

According to economist and Nobel Laureate James Heckman, investing early in children’s lives yields the highest return in human capital, due primarily to future reduction in crime, increased earnings, and higher tax revenue. Every dollar spent on quality early learning can produce returns of $7 to $17, with the largest returns occurring between birth and third grade.

Investing in preschool today at approximately $8,000 per child per year is much more cost effective than paying $90,000 per child per year for juvenile-detention services later, or subsidizing living and service costs during a lifetime of unemployment. The United States trails most of the world’s developed nations when it comes to four-year-old preschool participation, and that seems to be reflected in our lackluster high-school completion. We rank as low as 21st for OECD countries (Organization for Economic Cooperation and Development) for high-school graduation rates, falling far behind the top five — Portugal, Slovenia, Finland, Japan, and the United Kingdom.

“If we expect our children to walk through the doors of our colleges and universities tomorrow, and succeed in our economy in the years ahead — we need universal pre-K,” said Sen. Gillibrand in a February news release. “High quality early learning leads to strong cognitive, social, emotional and language development — key skills for a bright future.”

Peggy O’Shea
President & CEO
The Community Foundation of Herkimer & Oneida Counties, Inc.

Barbara W. Henderson
Vice President for Programs & Community Initiatives
The Community Foundation of Herkimer & Oneida Counties, Inc.

Brenda E. Episcopo
Executive Director
United Way of the Valley and Greater Utica Area

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