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Beat the summer heat and shop Maryland Tax-Free Week

Posted by on Aug 11, 2017 | Comments Off on Beat the summer heat and shop Maryland Tax-Free Week

Beat the summer heat and shop Maryland Tax-Free Week

Just in time for back to school shopping, Maryland apparel retailers are beginning a week of tax-free sales. The second Sunday of August to the following Saturday is designated as Shop Maryland Tax-Free Week each year. That means qualifying apparel and footwear $100 or less, per item, are exempt from the state sales tax. Accessory items are generally not included; however, new for 2017, the first $40 of a backpack/bookbag purchase is also tax-exempt. The Shop Maryland Tax-Free Week for 2017 is Sunday, August 13 – Saturday, August 19. Full List of Tax-Exempt Items For more information, visit the Maryland Comptroller’s Tax-Free Week site. Questions? Contact your Hertzbach Tax Advisor at 410-363-3200 or 800-899-3633. We look forward to speaking with...

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Fight fraud with these common managerial accounting tools

Posted by on Aug 7, 2017 | Comments Off on Fight fraud with these common managerial accounting tools

Fight fraud with these common managerial accounting tools

When thinking about the ways financial experts can uncover fraud, data analysis and other forensic accounting techniques may come to mind. But qualified experts also know how to use everyday managerial accounting practices to ferret out fraud. Budgets Budgets can provide insight into how management expects a company to perform in the near future. As such, budgets might highlight unusual transactions and other developments that fall outside of management’s expectations and warrant further investigation. Budgets can also play a role in fraud deterrence. Creating budgets typically requires input from people across the organization. Such interdepartmental communication and information sharing provides an informal fraud “screen” that makes it harder for perpetrators to manipulate the financial results. Would-be thieves may be deterred by the idea that managers and co-workers in other departments are paying attention to what they’re doing. Variance analysis After a budget has been finalized, management may review it and investigate differences between actual and budgeted performance to find the causes. For example, if actual wages significantly exceeded budgeted wages, the difference could be due to wage increases, productivity declines, greater downtime, unexpected demand for the company’s goods or services, or a combination of these possibilities. It could also signal phantom employees on the payroll, however. When it comes to fraud detection, experts pay particular attention to variances related to inventory and purchase pricing. For example, variances between the actual and budgeted pricing for supplies could suggest the existence of: Kickbacks, where the perpetrator takes a cut from a vendor that inflates its prices, or Fictitious vendors, where the payments go to the perpetrator and no inventory is received in exchange, requiring the organization to spend more money to restock inventory. If a scheme involves the purchase of subpar materials or fewer units than ordered, it could show up in spoilage or other inventory-related variances. Conversely, the absence of variances when they would be expected can be cause for concern. For example, an organization may have run into an unanticipated price jump for a critical component, which would understandably lead to a purchase price variance. If no such variance is found, it could be a sign of financial reporting fraud. Contribution margin The term “contribution margin” generally refers to the difference between a unit’s sale price and its variable costs. It’s often used to make pricing decisions, calculate breakeven point, and evaluate profitability. But contribution margin analysis also can be used to detect fraud schemes, such as skimming or inventory theft. The key lies in the contribution income statement. The traditional financial accounting income statement (also known as a profit and loss statement) initially computes a gross margin (revenues less variable and fixed manufacturing costs). But the contribution income statement first calculates the contribution margin (revenues less variable manufacturing and nonmanufacturing costs). Contribution margin as a percentage of revenue should remain fairly consistent over time. If the contribution margin is dramatically lower than usual, fraud could be to blame. Perhaps an employee is understating revenue to hide skimming — but the margin would fall because the variable costs relate to the actual sales, not the falsely lower sales that are reported. Important caveat While the techniques explored here can raise red flags that fraud is occurring, it’s important to remember that red flags aren’t solid evidence. When fraud is...

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Implications of HIPAA breaches an increasing concern for long-term care

Posted by on Jul 27, 2017 | Comments Off on Implications of HIPAA breaches an increasing concern for long-term care

Implications of HIPAA breaches an increasing concern for long-term care

Data breaches can come from many sources including ransom-ware, employee mistakes and disgruntled and/or former employee actions.  Long-term care operators have a specific added burden of securing records for an extended period. Additionally, this type of information remains valid and useful for a very long period since it is unlikely to change. Following a data breach, Federal HIPAA penalties, class-action lawsuits and settlements are an increasing concern for healthcare providers. For example, Anthem, Inc., the largest U.S. health insurance company, recently settled litigation over hacking in 2015 that compromised about 79 million people’s personal information for $115 million.  Even if a provider has committed no wrongdoing, bad publicity can cause major financial implications. As data breeches continue to proliferate, there is guidance on how to act quickly and stop/report cyber security related-incidents within your facility. The Department of Health and Human Services Office for Civil Rights provided this guidance in a recently published checklist. If you have any questions about the content in this blog, we encourage you to reach out to us at...

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How FRCP amendments affected e-discovery rulings in 2016

Posted by on Jul 24, 2017 | Comments Off on How FRCP amendments affected e-discovery rulings in 2016

How FRCP amendments affected e-discovery rulings in 2016

The amended Federal Rules of Civil Procedure (FRCP) took effect in December 2015. What effect did the amendments have on cases involving the discovery of electronically stored information (ESI)? The answer may be found in a recent study published by Kroll Ontrack, a data recovery and e-discovery consulting firm. The conclusions drawn can help you anticipate pretrial challenges and how courts might handle them. Unearthing the main issues Kroll’s study reviewed 57 significant state and federal cases and revealed four common ESI-related issues: Disputes over production, including methods of production, proportionality and scope of discovery (56% of the cases studied), Preservation, spoliation and options for sanctions (32%), Procedural concerns, such as search or predictive coding — also known as technology assisted review (TAR) — protocols (8%), and Cost considerations, including cost shifting and taxation of costs (4%). The FRCP amendments emphasize both relevance and proportionality — and the study found that the 2016 court opinions focused on the same issues. Digging deeper into the cases The study came to some important conclusions. For example, it found that the opinions addressing proportionality demonstrate that the amendments haven’t changed the discovery burden. In other words, both the requesting and responding parties must explain why a discovery request should or shouldn’t be granted. The opinions also reflect the greater attention paid to preservation practices under the amended FRCP 37. The cases considered 1) reasonable steps to preserve, 2) intent to deprive another party of relevant ESI, and 3) the inherent power of the court to impose sanctions. One case noted that the court had the power to grant sanctions even if FRCP 37 hadn’t applied. Cases involving procedural issues largely dealt with search protocols and predictive coding. Although courts acknowledged that predictive coding is frequently the most effective and efficient search option, they refrained from requiring parties to use it. Instead, courts found that the responsible party is usually best positioned to determine how to search for and produce responsive ESI. When courts addressed cost-centered issues, they seemed willing to require parties to pay for their own discovery in some circumstances. For example, the plaintiff in one case was given access to emails (at the plaintiff’s expense) where the defendant didn’t have its own archiving system. Lessons learned Research shows that courts expect parties to collaborate early in a case to establish the scope of discovery, production formats and similar matters. Such collaboration could preempt many pretrial disputes over...

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Florida Supreme Court rejects caps on damages for medical malpractice cases

Posted by on Jul 12, 2017 | Comments Off on Florida Supreme Court rejects caps on damages for medical malpractice cases

Florida Supreme Court rejects caps on damages for medical malpractice cases

The Florida Supreme Court recently ruled that a law putting a cap on damages in medical malpractice cases is unconstitutional. This cap was a controversial change that the Florida Legislature made in 2003. In 2008, a lawsuit stemmed from a complaint by a patient who was awarded $4 million in non-economic damages, which was then reduced to $2 million due to the cap. This triggered the latest ruling by the Florida Supreme Court. Justices argued that the caps on non-economic (or pain and suffering) damages “arbitrarily reduce damage awards for plaintiffs who suffer the most drastic injuries.” The reasoning behind the change made in 2003 was due to what appeared to be a crisis of high malpractice insurance premiums. The justices argued that there is no evidence that such a crisis exists. If you have any questions about the topics discussed in this blog, we encourage you to reach out to us...

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Hertzbach at the HAND Annual Meeting

Posted by on Jul 11, 2017 | 0 comments

Hertzbach at the HAND Annual Meeting

Hertzbach’s Affordable Housing Team proudly supports the HAND Annual Meeting every year. We have over 35 years of experience serving the needs of the affordable housing community. Our firm is staffed by a highly skilled team of professionals who are dedicated to understanding of the unique accounting needs of the affordable housing industry. Contact us today at AffordableHousing@hertzbach.com to find out how we can assist you with our services and...

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The Long Term Care Facility for 2020 and Beyond

Posted by on Jun 28, 2017 | Comments Off on The Long Term Care Facility for 2020 and Beyond

The Long Term Care Facility for 2020 and Beyond

Patrick Trotta, CPA, CHC, partner at Hertzbach, will be presenting “The Long Term Care Facility for 2020 and Beyond: Strategies for Operational and Financial Success” in conjunction with the Beacon Institute – LifeSpan’s Educational Affiliate and leader in education for senior care and service providers. Patrick is a partner in Hertzbach’s Healthcare Industry Services Group and  has accumulated over 30 years of experience servicing clients throughout a variety of specialty industries. However, his main expertise lies within the healthcare field. He is a frequent speaker and presenter on healthcare related topics. The Long Term Care Facility for 2020 and Beyond – REGISTER HERE Health Care delivery models are in a period of significant change. The successful Long Term Care Facility will be an efficient and effective partner, providing coordinated services with other members of the health care delivery team. This seminar will present several topics essential to operational and financial success. Wednesday, July 19, 2017 9:00 AM – 12:15 PM Handelman Conference Center 10280 Old Columbia Road, Suite 215 Columbia, Maryland 21046 410-381-2401 CEU- 3.0 – Administrator  Target Audience: CEO / Owners Executive Directors Administrators Business...

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Robert Carter interviewed by Stevenson University

Posted by on Apr 11, 2017 | Comments Off on Robert Carter interviewed by Stevenson University

Robert Carter interviewed by Stevenson University

“At any university, it is of the utmost importance that their instructors are qualified, knowledgeable, and willing to share their expertise, not only in terms of education, but real-life situations as well. The Stevenson University School of Graduate and Professional Studies is fortunate to have many instructors that fit this ideal, including Forensic Studies Adjunct Instructor, Robert Carter. Robert is a Senior Manager at Hertzbach and Company, P.A., and took time out of his schedule to speak with us.” Click here to read the rest of the...

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Maryland Skilled Nursing Provider Sues State 

Posted by on Mar 30, 2017 | Comments Off on Maryland Skilled Nursing Provider Sues State 

Maryland Skilled Nursing Provider Sues State 

In December 2016, Neiswanger Management Services (NMS), a Maryland nursing home operator, was sued by the Maryland Attorney General. Maryland Attorney General Brian E. Frosh stated that in the investigation, they discovered that NMS had removed residents from their facilities after their Medicare coverage expired and that they did not find suitable alternative care. NMS strongly disputed the allegations in Frosh’s suit. On Friday March 17, 2017, NMS sued state health officials claiming that they “abused and misused the State survey process” to shut down their facilities. Throughout their legal filings, NMS claims that state health officials unnecessarily targeted their facility, imposed “unjustified” citations and engaged in “illegal actions.” NMS summed up these actions by calling them a “regulatory assault.” If you have any questions about the topics discussed in this blog, we encourage you to reach out to us at...

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Florida healthcare provider pays $5.5M settlement over potential HIPAA violations

Posted by on Mar 14, 2017 | Comments Off on Florida healthcare provider pays $5.5M settlement over potential HIPAA violations

Florida healthcare provider pays $5.5M settlement over potential HIPAA violations

A Florida healthcare provider (Memorial Healthcare Systems) has paid the U.S. Department of Health and Human Services $5.5 million to settle potential HIPAA violations. The Health Insurance Portability and Accountability Act of 1996 (HIPAA), was enacted to publicize standards for the electronic exchange, privacy and security of health information. The reasoning behind this settlement was a security breach that occurred within the last several years. 115,143 patients’ information was accessed using a former employees’ login credentials. This security breach was reported by Memorial Healthcare Systems to the Department of Health and Human Services. At Hertzbach & Company, P.A., not only is protecting our clients’ information a top priority, but assisting our clients with protecting their clients’ information is a top priority as well. Here you can view the recent presentations given by our Healthcare Industry Services Group regarding industry-specific issues of fraud and cyber security. If you have any questions about how to protect your healthcare business or your clients, please do not hesitate to contact us at...

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