Outsourcing Year-End Closing and Financial Statements: Eight Benefits for School Districts

Outsourcing Year-End Closing and Financial Statements: Eight Benefits for School Districts

Financial management is a weighty responsibility for all organizations. School districts’ fiscal activities have the added burden of standing up to the multi-faceted demands and scrutiny of parents and taxpayers. More and more, school districts are outsourcing accounting – especially when it comes to budgeting, payroll, year-end closing, and financial statement preparation – to promote accuracy and compliance, while saving money, especially in smaller districts with limited resources and financial expertise.

The end of the fiscal year is a particularly busy time for school districts, with numerous financial responsibilities such as closing books, reconciling accounts, and preparing financial statements. This period requires a high level of knowledge and meticulous attention to detail to avoid errors and ensure compliance with financial reporting standards. By outsourcing these tasks to a professional accounting firm, school districts can ensure that their financial records are accurate, up-to-date, and in line with the latest regulations.

Accounting firms have the expertise and experience to handle complex financial tasks effectively. They are well-versed in the latest accounting software and technologies, which can streamline processes and improve accuracy. Additionally, their understanding of financial regulations and reporting standards ensures that a district’s financial statements are compliant and transparent.

Outsourcing year-end closing and financial statement preparation also allows school districts to focus more on their core mission—education. Rather than juggling administrative tasks, school staff can concentrate on improving student outcomes and implementing strategic initiatives. This not only improves efficiency but also leads to better use of resources and, ultimately, a higher quality of education.

Cost-effectiveness is another significant advantage of outsourcing the accounting function. By doing so, school districts can avoid the overhead costs associated with maintaining an in-house accounting department, such as salaries, benefits, training, and software. Instead, they can leverage the services of a professional accounting firm, which often proves to be more economical in the long run.

Like most fields today, there are not enough accountants for all of the roles available. Having to fill or replace an in-house accountant can take a lot of time and resources to complete a candidate search and subsequent vetting process and ensure a good fit. What’s more, changes like an in-house accountant leaving for another job or taking a leave to care for a family member can open a district up to disruptions – that risk doesn’t exist with an accounting firm that has extra staff on hand to do what’s required.

Moreover, accounting firms can provide a fresh, unbiased perspective on the district’s financial management. They can identify inefficiencies, suggest improvements, and help implement best practices. This can lead to better financial stewardship, improved budgeting, and more informed decision-making.

Risk mitigation is another crucial benefit. Errors in financial statements can lead to reputational damage and legal consequences. Professional accounting firms have stringent quality control procedures to minimize errors and omissions. They also maintain confidentiality and data security, protecting the district from potential financial and data breaches.

Lastly, outsourcing provides flexibility. School districts can scale up or down their accounting needs based on their requirements. This is particularly beneficial during peak periods, like the year-end closing when the workload increases substantially.

For over 55 years, RBT CPAs has been providing accounting, advisory, audit, compliance, and tax services to school districts throughout the Hudson Valley and beyond. If you’re interested in learning more about how your school district and RBT CPAs can be Remarkably Better Together, click here to request an introductory meeting.

 

RBT CPAs never offshores work outside of the U.S., so you always know who is handling your financial information.

Is There Someone Missing from Your Team?

Is There Someone Missing from Your Team?

As a business owner, you wear a lot of hats from CEO and CFO to HR expert, technology guru, and more – and that’s in addition to your brewery-distillery-distributor-focused responsibilities. Over time, especially as your business grows, you may find yourself wanting or needing deeper expertise in a particular area. While a full-time staff member may not be warranted, you may want to explore opportunities to outsource work, engage professionals for a defined number of hours a month, or simply have resources lined up for you to access as needed or on demand.

For example, have you been wondering whether you are effectively using financial data to identify opportunities or recognize red flags for your business? Do you think about possibly adopting a retirement or other benefit plan to strengthen your employee value proposition but don’t know where to start? Do you know what options are available for your business over the long-term and how this intersects with your personal financial legacy?

Here’s how some experts can support you and your business on a part-time, full-time, outsourced, or contract basis…

Accountant: Prepares and examines financial records, including accurate, complete, and compliant financial statements. Helps you understand, meet, and navigate tax obligations and liabilities while maximizing tax opportunities. Completes tax filings. Provides assistance with banking, finance, financial technology, and more.

Auditor: Reviews and verifies the accuracy of financial records and accounting methods to ensure tax compliance and protect against financial crimes (i.e., embezzlement and fraud). Recommends best-in-class practices, processes, and systems to protect the financial integrity of the business, benefit plans, and more.

Benefits administrator: Designs benefit plans (i.e., retirement, health, life insurance, disability, and more); provides administration, actuarial, and recordkeeping services; performs compliance services; and educates employees.

Bookkeeper: Records and maintains all financial transactions for your business; manages payroll; processes invoices; produces financial reports; automates transactions; and organizes data.

Chief Financial Officer: Manages financial operations and serves as a senior business advisor. Develops, monitors, and updates financial plans and goals. Advises on taxation, investing, and cash flow management. Analyzes strengths, weaknesses, and course corrections. Identifies opportunities and strategic financial moves based on your industry, geographic location, competitive environment, and national trends, and a deep understanding of economics, finance, business, and compliance.

Estate planner: A financial expert who creates a plan defining your personal wishes and wealth legacy. Ensures your wishes are documented and legally protected while helping you employ financial vehicles and strategies (i.e., trusts and gifting) so more of your wealth goes to the people and causes you care about rather than taxes.

Human resources expert: Someone with expansive knowledge of the people side of running a business, so you have the processes, plans, and infrastructure to attract and retain the right talent to promote business success. Includes everything involved with recruiting, hiring, and onboarding; benefits and compensation; legal compliance; engagement; training and development; performance management; succession planning; diversity, equity, and inclusion; retention; and more.

Valuation expert: Provides the information you need to understand your business’s worth, potential, and options, so you can make informed decisions to help you meet future goals. Conducts professional business valuations, intangible asset appraisals, and financial consulting to define, enhance, and protect business value. Includes business valuation, forensic accounting, equipment appraisal, appraisal review, economic damages, and business planning.

If you are interested in learning how any, some, or all of these experts can help your business without adding to the headcount, give RBT CPAs a call. Our team of world-class professionals and those at our affiliates – Advent Valuation Advisors; Spectrum Pension & Compensation; and Visions Human Resource Services – can help you assess your needs, explore options, and design an engagement that fits your business and budget, proving we can be Remarkably Better Together.

RBT CPAs never offshores work outside of the U.S., so you always know who is handling your financial information.

Comments and Reevaluation Requests Due for Fiscal Year 2025 Fair Market Rents (FMRs)

Comments and Reevaluation Requests Due for Fiscal Year 2025 Fair Market Rents (FMRs)

On August 14, HUD published Fiscal Year (FY2025) Fair Market Rents (FMRs), as well as a Federal Register notice, entitled “Fair Market Rents (FMRs) for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program; and Other Programs; Fiscal Year 2025.” The notice provides details about the FMRs and instructions on how to submit comments or request a reevaluation.

The recently published FMRs take effect October 1, 2024. As explained in 2024 FMR FAQs, “FMRs are an estimate of the amount of money that would cover gross rents (rent and utility expenses) on 40 percent of the rental housing units in an area. FMRs are used in several HUD programs, including determining the maximum amount a Housing Choice Voucher will cover.”

The updated FMRs may result in changes to the rent level subsidies. For areas where FMRs are increasing, owners may be able to raise rents (within defined limits). On the other hand, for areas where FMRs are decreasing, owners may see tighter rent controls. Ultimately, this will impact residents’ costs for rent as well.

Mandatory Small Area FMR (SAMFR) use has been expanded to another 41 metropolitan areas, which are identified in the Federal Register notice.

According to the notice, comments are due before October 1 and requests for reevaluation of FMRs are due 30 days after the Federal Register notice was published (although some sources indicate HUD may accept reevaluation requests submitted before October 1).

The Federal Register notice includes details about how PHAs can submit comments or request a reevaluation. (Others who want to request a reevaluation should work through their local PHA.) Refer to the notice for complete details. Highlights include:

  • Reference Docket No. FR-6479-N-01 and the notice’s title: “Fair Market Rents for the Housing Choice Voucher Program, Moderate Rehabilitation Single Room Occupancy Program, and Other Programs; Fiscal Year 2025.”
  • The PHA for the area or PHAs representing at least 50% of voucher tenants in an FMR area must agree reevaluation is necessary.
  • The requestor must provide HUD with more recent data than the 2022 ACS data used to calculate FY 2025 FMRs. Details are in section V.A.(2) of the Federal Register notice.
  • Indicate whether the FY 2024 FMR will be maintained or the FY 2025 FMR will be implemented during the reevaluation period. (Per the notice: PHAs requesting reevaluation of newly designated SAFMR areas may adopt FY 2024 SAFMRs or FY 2025 SAFMRs during the reevaluation period. Following the comment period, HUD will post a list, at https://www.huduser.gov/​portal/​datasets/​fmr.html, of the areas requesting reevaluations where FY 2024 FMRs remain in effect.)
  • Submit electronically via the Federal eRulemaking Portal at https://www.regulations.gov. Submissions can also be made via mail, although electronic submissions are encouraged. The mailing address is Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500.

As you navigate the FY 2025 FMRs and what they may mean to your organization or tenants, you can count on RBT CPAs to focus on your accounting, audit, tax, and advisory needs. Give us a call to find out how we can be Remarkably Better Together.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your organization’s confidential financial data.

Six Advantages of Outsourcing Accounting for Local Unions

Six Advantages of Outsourcing Accounting for Local Unions

In the ever-evolving business landscape, local unions are increasingly recognizing the need for strategic financial management. One potential solution that’s gaining significant traction is outsourced accounting.

Access to expertise is the most appealing advantage of outsourcing accounting. Accounting firms are equipped with seasoned professionals who are well-versed in financial regulations, tax laws, and financial management best practices, and they stay up-to-date on changes and evolving trends. These professionals can provide advice on financial decision-making and ensure compliance with tax regulations, minimizing the risk of costly errors and penalties.

Cost savings is another major benefit. Hiring an in-house accounting team can be financially draining, with costs associated with recruitment, training, salaries, benefits, and office space. In contrast, outsourcing accounting offers a flexible pricing structure, allowing unions to pay for the services they need when they need them. This may reduce overhead costs.

By delegating financial management tasks to outsourced accountants, union leaders can concentrate on their primary roles, such as advocating for members’ rights, negotiating collective agreements, and organizing campaigns. What’s more, they get peace of mind that all accounting-related and regulatory requirements are covered.

Outsourcing accounting also provides an opportunity for enhanced data security. Reputable accounting firms invest in state-of-the-art security systems to protect data from unauthorized access and cyber threats. This level of security may be hard to achieve with an in-house team, particularly for local unions with budget constraints.

There’s also a technology advantage that comes from outsourcing. With an outsourced accounting firm, local unions can benefit from the use of cutting-edge technology. Most accounting firms employ the latest accounting software and tools, facilitating efficient, accurate, and timely financial reporting.

In addition, while in-house accountants can resign, fall ill, or go on vacation, leaving the union with a void to fill, accounting firms usually have staff on hand to ensure uninterrupted service.

What does outsourcing accounting entail for a local union? Initially, the union would need to define exactly what it is looking for in an outsourcing arrangement. Armed with this information, it may issue a “request for proposal,” asking potential firms to provide detailed information about their experience, approach to the work, timeline and costs, the team who will support the client, references, and more.

Beyond the proposal, the local union should meet face-to-face with representatives from the contenders to get answers to additional questions, clarify any arrangement, and ensure fit.

The outsourcing firm selected for the engagement then takes over the financial management tasks, which may include bookkeeping, payroll processing, tax preparation, financial reporting, internal and external auditing, advisory services and strategy setting, and budget planning and monitoring.

The firm should keep you informed through ongoing communication and may even provide value-added resources and information to support your union’s financial compliance, performance, and success. As your local union’s accounting requirements change, you can adjust your outsourcing arrangement to meet evolving needs.

For over 55 years, RBT CPAs has been providing accounting, advisory, audit, compliance and tax services to organizations and businesses – including local unions – across the Hudson Valley and beyond. If you’re interested in learning more about how your local and RBT CPAs can be Remarkably Better Together, click here to request an introductory meeting.

RBT CPAs never offshores work outside of the U.S., so you always know who is handling your financial information.

Two Benefit Plans All Veterinary Practices Should Consider Offering

Two Benefit Plans All Veterinary Practices Should Consider Offering

Among the many factors that contribute to stress in the Veterinary field, student loan debt is a big one. With the average student loan debt for vets reportedly ranging from upwards of $150,000 – and sometimes as high as $400,000, veterinary practices looking for ways to attract and retain talent may want to explore education assistance programs and defined contribution savings plans. Here’s why…

Under Section 127 of the IRS code, employers can use an educational assistance program – commonly used to help employees pay tuition, fees, and other costs of going to school while working — to help employees pay student loan obligations through December 31, 2025 (unless it’s extended via legislative actions).

To set up a program, an employer must put it in writing and adopt related administrative processes. The IRS recently provided sample language for a program making it even easier for employers to get started.

Under a program, an employer can offer $5,250 per year in total benefits. An employer can pay principal and interest on an employee’s qualified educational loan, up to the annual maximum. Best of all, the benefit is tax-free to the employee and a tax deduction for the employer. The IRS recently issued FAQs with more details.

In addition, thanks to the SECURE 2.0 Act, employers that offer a 401(k), 403(b), SIMPLE IRA or 457(b) qualified retirement plan can opt to include a student loan matching contribution feature. Put simply, when an employee makes payments for a qualified higher education student loan, the employer can make matching contributions to the retirement plan in their name. This way, the employee can continue paying student debt and, at the same time, build income for retirement.

According to recent IRS guidance, a qualified student loan payment can be for the employee, a spouse, or a child, providing greater flexibility and opportunities to pay down student loan debt. Limitations may apply.

Making this an even sweeter deal, certain employers (with fewer than 100 employees) may be eligible for a tax credit of up to $5,000 for each of three years when they start a qualified plan like a 401(k) or SIMPLE IRA.

If you have questions or need assistance getting started, RBT CPAs and its affiliates are here to help.

Our Spectrum Pension and Compensation professionals specialize in designing and administering retirement plans like 401(k)s or SIMPLE IRAs.

Our Visions Human Resources Services professionals can help you set up an educational assistance program (and address any other HR needs you may have).

Your RBT CPAs contact can help you navigate accounting, tax, and audit implications and compliance.

To get started, email slhowell@rbtcpas.com to set up a meeting with representatives from all three of our organizations (Spectrum, Visions Human Resource Services, and RBT CPAs) and experience firsthand what we mean when we say you and RBT CPAs can be Remarkably Better Together.

Please note: The preceding information contains highlights only. It’s a good idea to speak with a benefits professional, HR advisor, or benefits legal council to understand all of the implications and requirements of adopting and administering benefit plans.

Tax Liabilities that Pass Onto Estates and Heirs

Tax Liabilities that Pass Onto Estates and Heirs

One of the primary considerations when developing an estate plan is the taxes that will be due upon a person’s passing. With this knowledge, an estate plan can – and should – proactively include actions to help ensure more of a decedent’s assets go to the people and causes they care about, rather than taxes. This is even more critical when a family business is involved.

Following a person’s passing where there is no surviving spouse but there is an estate, taxes may be due. The most common type of taxes due are on income earned up to the date of death. For example, if a person passes on June 15, 2026, a final tax filing must be made by the following April 15 for any earnings between January 1, 2026 and June 15, 2026.  The executor is responsible for making sure individual income tax returns are prepared and filed, and related taxes are paid.

Income taxes due come from assets remaining in an estate before any distributions are made. Any individual income tax refund owed to the decedent gets added to the estate and distributed with other assets.

Federal and state estate taxes may also be due. Federal estate taxes are due when an estate, including prior taxable gifts, is valued at more than $13,610,000 (this is scheduled to decrease to an estimated $7 million starting January 1, 2026). Estate values above this exemption amount are taxed at 40%.

New York estate taxes are due if an estate is valued at 100% or higher than the state’s exemption amount ($6,940,000 in 2024). For purposes of calculating the estate value, any gifts made within three years of death are clawed back and considered part of the estate. If an estate is valued at:

  • More than 105% of the exemption amount (more than $7,287,000 in 2024), state taxes are due on the entire value of the estate – not just amounts above the exemption.
  • 100% to 105% of the exemption amount, the exemption phases out and an additional portion of an estate is taxed based on a sliding scale, with the top rate being 16%.

An estate plan should address who bears the burden of estate taxes. If a person’s will or revocable trust is silent on this matter, the person who receives an asset is responsible for paying estate taxes on that asset. If a will states estate taxes are to be paid out of the residuary of the estate, then the estate pays the taxes and distributes any remaining assets.

It’s important to remember that certain assets pass onto a named beneficiary and bypass a will. Two examples are life insurance and individual retirement accounts. In this case, the will or revocable trust should specify how taxes will be paid for these assets.

A third type of tax to consider is the tax due on the income earned on estate assets, such as interest earned on an estate bank account; dividends and interest on an estate brokerage account; and a 401(k), 403(b), or traditional IRA distribution.

In addition, when an individual passes away, their assets are revalued, generally as of their date of death.  If an estate sells assets, the selling price reduced by the date-of-death value generates a gain or a loss. If there is a gain, taxes are due. The federal and state governments want their tax revenues. If no distributions are made, the income taxes become the responsibility of the estate. If distributions are made, the income tax burden may end up being passed to the beneficiary.

If the decedent owned a business, it gets more complicated (which is why every business owner should have an estate and succession plan) and is governed by varying rules depending on whether the decedent operated as a sole proprietor, a partnership, an S-Corporation, or a C-Corporation.

For example, if the decedent owned a sole proprietorship, it may stop operating on the date of death and its assets and debts become part of the estate. For a partnership, an agreement usually spells out whether other partners can buyout the decedent’s share or whether the decedent may leave their partnership interest to beneficiaries. In either case, the partnership is an asset of the estate and needs to be valued.

S-Corporations and C-Corporations are similar to partnerships in that they are considered estate assets that must be appraised. If there are other shareholders of the business, there should be an agreement that details how shares of stock may be handled – whether sold to other shareholders, sold to outsiders, or distributed to beneficiaries.

As mentioned above, a family business is also considered an asset that must be valued for estate tax purposes. If the value of the decedent’s estate exceeds Federal and state estate tax exemptions, taxes will be due. Careful planning is needed to determine how these taxes will be funded. Frequently life insurance, owned by an irrevocable life insurance trust, is used to fund the estate taxes.

I have only provided highlights in this article. There are numerous different scenarios that play out based on each individual situation. Two key thoughts I would like to leave you with:

  • You need a will or, even better, an estate plan that clearly defines your wishes and beneficiaries; otherwise, what happens to your estate may be decided by state law.
  • When creating or updating your estate plan, be sure to account for tax liabilities following your passing to ensure your legacy remains intact.

If you have any questions about estate taxes or you would like to get started creating or updating your estate plan, RBT CPA trust, estate and tax professionals are available to help. To get started, email mtorchia@rbtcpas.com or call 845-567-9000 and ask for Michael Torchia. We would consider it a privilege to show you how we can be Remarkably Better Together.

Government Procurement Challenges, Priorities & Trends

Government Procurement Challenges, Priorities & Trends

Procurement is in the spotlight on global, federal, state, and local stages. Driven by rising costs, supply chain fragility, the beyond-fast evolution of technology, social and environmental concerns, ever-changing legislation, staffing challenges, and more, all levels of government are being challenged like never before to modernize procurement with a keen eye toward cost savings, sustainability, and compliance.

One survey identifies the complexity of systems and processes as the top procurement challenge across industries, with rising costs and preparing for unexpected challenges being the next two biggest challenges for government.

The National Association of State Procurement Officers (NASPO) defined top priorities for state procurement in 2024 as modernizing the procurement process (moving up from the fifth priority in 2023), continuous process improvement, talent management and succession planning, and more.

Cybersecurity, sourcing requirements, climate/sustainability, supplier diversity, and more are converging to put more demands on procurement. Agility to promote repeatable quality processes that offer flexibility, deliver results faster, incorporate user feedback, and respond to changing needs while addressing talent challenges and upholding the myriad of regulations appears to be central to addressing today’s procurement challenges.

E-procurement is taking the lead as a prominent trend, with municipalities increasingly adopting digital solutions for tendering, bidding, and contract management in an effort to shorten the procurement cycle, enhance transparency, reduce paperwork, and improve efficiency. At the same time, it promotes equal opportunities among suppliers to bid by providing greater access to information.

Sustainability is increasingly being embedded into procurement practices, with a focus on acquiring services and goods in a manner that protects and supports the environment, while promoting ethical practices and supporting social welfare. (New York’s Green Purchasing Community provides a framework for local governments to ensure purchasing has a lower environmental impact while earning points toward Climate Smart Communities Certification.)

Data analytics and artificial intelligence point to increased opportunities for municipalities to use data for insights on spending, performance, and market trends. AI can help detect fraud, improve decision-making, and automate processes, while predictive analytics improves forecasting and increases cost savings. According to NASPO, there may be ways for AI to help vet suppliers, track supplier performance, identify problem suppliers, and detect fraud.

Beyond technology, municipalities are looking to create job opportunities and drive economic growth with a greater focus on supporting small and medium-sized businesses (SMBs) via their procurement processes. Some are adopting policies to award a percentage of contracts to SMBs while making bidding easier and providing assistance to help SMBs navigate the process.

As your municipality explores opportunities to modernize procurement while operating within New York State laws, you can count on RBT CPAs to focus on your accounting, audit, tax, and advisory needs. Give us a call to find out how we can be Remarkably Better Together.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your organization’s confidential financial data.