Higher Education

Partner, CPA, CIA, CFE

Academic Medical Centers

Risk Advisory

Data Analytics Solution for Higher Education (DASH)

Principal, CIA

Grants Administration & Research Compliance

Authored by Ashley Deihr, Kaitlyn Murphy and Raina Rose Tagle Partnerships among institutions of higher education and medical centers can provide each party with significant value within a framework of clearly defined and followed objectives. Affiliation agreements that lack pertinent information could result in unrealistic expectations, inconsistent processes and an inability to capitalize on the benefits of the partnership, among other consequences. Internal audit can help to clarify and enhance each organization’s position through a thoughtful, thorough review of the affiliation agreement that alleviates ambiguity, resolves conflicts and achieves a more harmonious and successful future for the affiliate relationship. In their Winter 2020 New Perspectives publication, The Association of Healthcare Internal Auditors (AHIA) featured Baker Tilly’s article that explores this topic.
For more information on this topic or to learn how Baker Tilly specialists can help, contact our team.

Internal audit can add value by reviewing the affiliation agreement to identify areas of risk and ambiguity.

Healthcare & Life Sciences

Not-for-Profit

Internal Audit

Affiliation agreements – add value with a critical assessment

Welcome to the Baker Tilly video series where we bring leaders across our firm to discuss timely, relevant and impactful topics that can enhance or protect your value. In this episode, Christine Anderson sits down with Raina Rose Tagle, a governance, risk management, compliance and cybersecurity partner at Baker Tilly. Raina highlights the importance of enterprise risk management (ERM) to ensure continuity and resiliency in a crisis like the COVID-19 pandemic. video To learn more about proactive ERM strategies to combat the coronavirus impact, listen to the full podcast, where Raina highlights how organizations are assessing and prioritizing risks related to COVID-19 and shares best practices for what organizations can do now to mitigate risk, recover and be more resilient in the face of disruption. 

Risk specialist, Raina Rose Tagle, shares ERM best practices to ensure business continuity and resiliency through the COVID-19 crisis and recovery. 

Real Estate

Manufacturing & Distribution

Financial Services

Private Equity

Real Estate Investors

Multifamily Housing

Coronavirus recovery and growth resources

Enterprise Risk Management

Real estate coronavirus resources

Relief Funding Assistance

Manufacturing and distribution coronavirus resources

Raina Rose Tagle discusses enterprise risk management, business continuity and resiliency in crisis and in recovery

The COVID-19 pandemic is affecting construction projects in a variety of ways, including additional costs to protect worker safety, questions on who is responsible for these additional costs, and project delays related to local ordinances about business closure. This FAQ list highlights issues that will help site owners and internal auditors better prepare and manage COVID-19-related costs. Who is responsible for project costs impacted by COVID-19? The construction contract defines the budgets and responsibility for construction costs. Construction site-specific costs will generally be the responsibility of the project owner. Examples of these costs are: housing and transportation for job-site personnel, job-site safety and on-site COVID-19 testing. Back-office costs are the responsibility of the contractor. Examples of back-office costs are: work-from-home costs, accounting staff, company management, general COVID-19 planning and education, and human resources costs. What are acceptable costs related to COVID-19? Hygiene and cleaning costs – Costs to keep the job site germ free and provide a safer work environment are going to be the owner’s responsibility. Project delay costs – These costs may arise from construction material shortages, labor shortages and smaller construction crews. While these costs are acceptable, they should be fully documented and negotiated.  General conditions costs – Most of these are time-related costs, and as the project schedule is affected by COVID-19 delays, the owner will likely incur the extra general condition costs. Examples of these costs are labor, equipment rentals, security and utilities. What costs should be avoided? Anything that duplicates current practices without adding any additional value Delay costs that are not the result of a COVID-19 management plan; COVID-19 could be made a convenient excuse for rework, poor quality and inefficiency, and these costs should not be accepted by the owner or auditor General condition costs that are not time-related. Some costs are fixed and do not change regardless of schedule; examples of these include mobilization, office equipment purchases, temporary roads and layout yards Should change orders caused by COVID-19 be managed differently than other change orders? Yes. All additional costs should be segregated from planned construction costs. These costs may be treated differently resulting from changing legislation, tax law or insurance treatment; therefore, do not comingle contingency and allowance usage or change orders with COVID-19 response costs. Are costs incurred due to COVID-19 reimbursable under most insurance programs? No. Most insurance programs exclude pandemics. However, read your policy and exclusions carefully and seek out legal counsel to interpret coverage. Does asserting force majeure terms automatically result in the owner accepting all consequential costs? Not automatically. Good contractors will be coordinating with owners to define what costs are the result of force majeure conditions. Understanding the root cause of these costs will enable both contractor and owner to agree on the costs and subsequent action items. The kinds of costs that may lead to dispute will be those that would have been incurred if the COVID-19 pandemic had never occurred, for example, poor workmanship, rework and substandard materials. Will surety or performance bonds protect the owner from contractor delivery failure? Maybe. Many surety programs have custom covenants complying with state and local government requirements that will protect the owner from a pandemic-related failure. Consequently, reach out to legal counsel or insurance agents and review the coverage to determine if the bond program provides pandemic protection.  Additional tips in the current environment Collaborate with your contractor – This is a new experience for everyone and together all parties will achieve a better solution than taking an adversarial position. Ask contractors for their COVID-19 response plan and plan to work with them so it meets everyone’s needs. The response plan should include the necessary job-site safety practices, a list of essential project employees, and standby rates for people and equipment if the job site is shut down. Don’t wait to develop this plan. Proactively work with your contractor to implement a course of action before it becomes a change order. Maintain good procurement procedures –  There will be projects where speed to completion is paramount. Don’t forego your procurement procedures for sake of speed. Find ways to compress the process that doesn’t include cutting out pre-qualifying contractors and suppliers or eliminating bid submittals. Finally, unknown circumstances and new challenges present opportunities for unethical people and companies to take advantage. Fraud will increase in this environment, so don’t eliminate project controls, therefore exposing yourself to unnecessary risks. For more information on this topic or to learn how Baker Tilly specialists can help, contact our team.

This FAQ list highlights issues that will help site owners and internal auditors better prepare and manage COVID-19-related costs.

Lodging

Hospitals & Health Systems

Health Plans

Behavioral Health

Senior Services

Depository & Lending

Insurance

Construction Risk Management

Coronavirus Resource Center

Higher education institution coronavirus resources

Banking coronavirus resources

Health plan coronavirus resources

Healthcare provider coronavirus resources

COVID-19 construction audit FAQ for internal auditors and owners

Client background A not-for-profit healthcare organization with six hospitals, nearly 700 primary care and specialty providers at 75 locations, and 19 convenient urgent care locations, approached Baker Tilly to perform a charge capture internal audit at the physician practice groups’ level. Business challenge Physician practices groups at the client had approximately 75 locations and various levels of compliance with capturing charges. The client requested that Baker Tilly perform a physician practices’ charge capture processes review. Baker Tilly held a brainstorming meeting with the business owners of the physician practices team to identify the most effective ways to review and add value to the charge capture processes. Baker Tilly approach Baker Tilly and the physician practices team concluded that an agile internal audit would be the best approach. Having the ability to modify and adapt the internal audit to gather insights from each of the reviews and apply in an iterative fashion to subsequent audits would offer a better outcome than a narrow-focused single audit approach. Using the scrum framework to apply agile principles, the goals of the audit were broken down into three sprints each lasting approximately two weeks.  Baker Tilly worked with management to develop our “audit value approach board.” Key areas addressed included: identified concerns, project drivers, cross functional impacts, value proposition, identified key stakeholders and the project team, project objectives and scope, risk and control backlog and audit timelines. Baker Tilly agile audit project management Conducted sprint planning meeting(s) to discuss the goal, risks and control objectives to include in sprint backlog.  Implemented a modified scrum board to develop the sprint backlog and to track the in process and completed tasks. Conducted time-boxed (15-20 min) stand-up meetings (held 2x a week) focusing on what did we accomplish, what are we working on and what’s impeding achieving our goals Lessons learned were socialized, impediments/issues identified, and sprint progress tracked. At the end of every sprint we held a sprint review and retrospective meeting where key processes owners were included to provide input and feedback. As we performed the next sprint(s), we modified and updated our approach based on the prior sprint review and retrospectives and best practices that were identified.  Business impact The client received feedback more quickly through an iterative process by applying an agile approach to the audit. The audit approach was adapted throughout the process by applying lessons learned from each sprint. Management had more buy-in to internal audit recommendations since they were included as a collaborative partner throughout the process. For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.

Agile Internal Audit

An agile approach to charge capture processes provides added value for not-for-profit healthcare organization

Our qualified and experienced professionals understand the intersection of higher education and healthcare. Balance your research, clinical and educational missions within the context of evolving regulations, cost pressures and quality and discovery demands with Baker Tilly.

The rapidly changing healthcare and higher education landscape is posing new pressures and threats to academic medical centers. With new laws, payment models and an increased focus on optimizing patient outcomes, academic medical centers must address new industry paradigms in order to be positioned for effective and impactful response.

Baker Tilly offers a range of services to help you balance your research, clinical and educational missions, including:

Kimberly is a principal and leader in the firm’s higher education and research institutions industry practice. She has more than 18 years of experience assisting organizations with enhancing their business processes, reducing costs, designing robust and compliant infrastructures and navigating myriad federal regulations that affect higher education, research institutions, academic medical centers and not-for-profit organizations. She has been a frequent presenter at conferences for the Association of College and University Auditors, the National Council of University Research Administrators and the Society of Research Administrators, presenting on topics such as grants and contracts administration and compliance, the federal audit environment and practical approaches to compliance. Prior to joining the firm, Kimberly worked as an internal auditor for the Department of Defense Office of Inspector General conducting contract, procurement and environmental audits.

Debra Bowes, partner in the healthcare group, has been with the firm since 1995. She specializes in serving the financial needs of healthcare clients, not-for-profit organizations, and employee benefit plans. Deb has experience with numerous types of financial and compliance audits, including A-133 single audits. She has also helped many clients adopt various new accounting pronouncements.

David has a diverse healthcare background, ranging from hospital operations management to managed care underwriting/pricing to VBC models and partnerships.

Mark is a partner in Baker Tilly’s Philadelphia risk advisory practice with more than 25 years of public accounting experience.

Baker Tilly's qualified and experienced professionals understand the intersection of higher education and healthcare. 

Higher education and research institutions ensure student and institutional success by balancing competing priorities and effectively aligning limited resources.

Higher education leaders are challenging the status quo, transforming their business models and addressing strategic and tactical concerns with the help of Baker Tilly.

Academic Medical Centers

Affiliation agreements – add value with a critical assessment

Raina Rose Tagle discusses enterprise risk management, business continuity and resiliency in crisis and in recovery

COVID-19 construction audit FAQ for internal auditors and owners

An agile approach to charge capture processes provides added value for not-for-profit healthcare organization

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