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How does your nursing facility’s financial health stack up against industry peers? Benchmarking can provide you with clear, relevant comparisons that are essential to measuring and optimizing your facility’s performance. Cost data and key operating indicators from the Maine Medicaid cost reporting database provide an in-depth look at key trends for both nursing facilities and nursing facility-based residential care facilities (RCF). 

Occupancy 

For both nursing facilities and nursing facility-based RCFs, occupancy was about 90% in 2019 and through early 2020 (pre-COVID-19). Once the pandemic hit, occupancy began to decline, then dropped significantly in 2021 at the height of the crisis. By 2022, occupancy trends started to rebound, bringing nursing facilities up to nearly 82% occupancy and nursing facility-based RCFs up to about 84%. The regional average in 2023 was about 81% occupancy versus a national average of 76%. This trend continued through 2024.  

Medicaid reimbursement 

Data for 2012 – 2023, when nursing labor and occupancy significantly drove per resident day costs up, demonstrates a Medicaid shortfall for Maine nursing facilities. In 2023, the Medicaid shortfall reached $35 million, but would have nearly doubled to $65 million without supplemental payments released by Maine DHHS to help curb the impact of exponentially rising costs.  

MaineCare revenue and cost 

From 2014 – 2022, MaineCare experienced a steady rise in cost per patient day (PPD). In 2023, the allowable cost PPD hit $370 — $213 of which was direct care cost, and of that $84 was related to contract nursing. Revenue PPD was just $330. These costs are after supplemental payments and any ECA (Extraordinary Circumstances Allowance) funds were applied. The broadening gap between reimbursement rates and cost for nursing facilities is clear. 

Payer mix 

From 2019 – 2023, there was a significant shift in the payer mix for nursing facilities, with an increase in the use of Medicare Advantage and a decrease in Medicaid and Medicare A payers. This is indicative of the growing diversity in payer sources and underscores the importance of facilities understanding and adapting to the intricacies of Medicare Advantage plans, which include pre- and post-payment reviews.  

Nationally, Medicare Advantage has grown from 27% utilization by Medicare beneficiaries in 2012 to 54% in 2024, and Maine is one of seven states with more than 60% of eligible Medicare beneficiaries enrolled in the Medicare Advantage plan.  

Labor trends 

The use of contract labor has been a significant source of frustration for nursing facilities, especially in Maine. Payroll-Based Journal (PBJ) reporting for Maine for Q2 2024 reflects an alarming increase in the use of administrative nurses, such as nursing directors and MDS coordinators, and highlights the need to improve retention for leadership positions. Q4 2020 through Q4 2024 showed an increase in contract labor utilization for LPNs — a cost-saving measure for providing licensed nursing care.  

Data from Q4 2023 to Q2 2024 on the use of contract staff in Maine by county points to labor challenges in rural counties, while it shows facilities in more urban counties are better able to maintain staffing requirements with in-house staff. Some counties relied so heavily on contract labor that it accounted for approximately 45% of all staffed hours.  

The cost of contract labor for Maine facilities skyrocketed from its 2020 cost PPD of $25 — nearly tripling to $70 in 2023. The driving factor behind this was the increased demand for contract labor services. PBJ data for 2022 – 2024 shows a more positive trend for staff turnover despite continued challenges with contract labor. Registered nurse turnover decreased by 10% and overall staff turnover levelled off.  

Other trends 

The number of nursing facilities by fiscal year remained stable for 2020 and 2021 but began to decline steadily from 2022 – 2024. This trend can be attributed to the deepening gap between costs — both for direct care and contract labor — and reimbursement, forcing some facilities to close or convert to residential care facilities. In 2023, there were approximately 86 nursing facilities with a total of roughly 7,696 beds in Maine. 

2025 rate reform is designed to address the financial challenges of nursing facilities.  

• The transition to the pricing methodology has eliminated the cost settlement for direct and routine costs, enabling facilities to plan expenses and manage costs on known rates for the year.  
• Rate reform also includes value-based purchasing adjustments, which allow facilities to earn back a portion of their rate reduction through quality improvements or achievements.  
• The guiderails allow for potential rate adjustments of up to a 10% increase or decrease compared to prior rates, creating flexibility in the management of reimbursement rates.  

For nursing facilities seeking to improve financial operations, BerryDunn’s industry experts can assist with benchmarking by analyzing data on occupancy, Medicaid reimbursement, and contract labor to guide you to better understand how your cost and revenue drivers can lead to outcomes. Learn how to access our self-service Senior Living Benchmarking Portal for a carefully curated, comprehensive set of financial benchmarking reports. To learn more, visit berrydunn.com/stay-current. 

A financial institution’s core banking system, or core processing system, is an essential software that provides the backbone for day-to-day operations and transaction processing. Accounting for the costs of these systems can be tricky because of the complexities often involved in these contracts.  

The contracts tend to be long-term, as it would be infeasible (and undesirable) for financial institutions to have to re-negotiate and possibly switch core providers on a frequent basis. In addition, the contracts often include varying fees and provisions listed throughout the contract. The accounting team is often provided this lengthy contract and then left with the task of deciphering what is meaningful from an accounting standpoint.  

There are two key pieces of accounting guidance to consider when analyzing core contracts: 

1) Accounting Standards Codification (ASC) 705 – Cost of Sales and Services 

2) ASC 350-40 – Intangibles – Goodwill and Other – Internal-Use Software 

Core contracts may provide incentives or credits that can be applied against the fees charged by the core provider. According to ASC 705-20-25-1, “consideration from a vendor also includes credit or other items (for example, a coupon or voucher) that the entity can apply against amounts owed to the vendor (or to other parties that sell the goods or services to the vendor). The entity shall account for consideration from a vendor as a reduction of the purchase price of the goods or services acquired from the vendor…” 

As an example, let’s say your financial institution receives a one-time credit as part of signing a new core contract of $100,000 and the contract is to provide services to your institution over five years. This credit can be applied to future invoices received from the core provider. The contract has a monthly maintenance fee of $20,000 (likely among other charges). This credit would thus reduce the monthly maintenance expense of $20,000 to $18,333 (reduced by $100,000 divided by 60 months). This is a simple example, but hopefully, it will provide insight into the mechanics of the accounting for credits and incentives. In reality, these contracts tend to be much more complex, with variable fees and possibly even credits or incentives that can only be applied against certain fees. These credits/bonuses may not be recognized fully up front as a gain, revenue, or reduction of expense.  

There are often many fees listed in a core contract and these fees tend to be for various services related to the contract. Each fee should be considered on its own and assessed against the criteria listed in ASC 350-40-25, which establishes three project stages for internal-use software: 

1. Preliminary Project Stage. This stage may include: 

a. Conceptual formulation of alternatives 

b. Evaluation 

c. Determination 

d. Final selection 

All costs associated with the preliminary project phase shall be expensed as incurred. 

2. Application Development Stage. This stage may include: 

a. Design 

b. Coding 

c. Installation 

d. Testing 

Whether or not costs in this stage shall be expensed or capitalized is dependent on the type of cost: 

1. Costs incurred to develop internal-use software shall be capitalized. 
2. Costs to develop or obtain software that allows for access to or conversion of old data by new systems shall be capitalized. 
3. Training costs shall be expensed as incurred. 
4. Data conversion or clean-up costs shall be expensed as incurred. 
5. Postimplementation-Operation Stage. This stage may include: 

a. Training 
b. Application maintenance 

All costs associated with the post-implementation-operation stage shall be expensed as incurred. 

Costs incurred for upgrades and enhancements to internal-use software shall be expensed or capitalized in accordance with the guidance provided above. Costs incurred for maintenance shall be expensed as incurred.  

As an example in applying the above project stages, let’s say your institution has hired your core provider to develop an application programming interface (API – essentially a “bridge” between two software programs, allowing them to “talk” one another) so a new automated account reconciliation software can interface directly with your core. The core provider is charging you directly for the design of this API. These costs would be capitalized. Once designed, the core provider also provides your institution training on the API (for a fee) – these training fees would be expensed. Any internal training expenses, such as ongoing training, would be expensed as incurred. Furthermore, if your core provider charges a maintenance fee for ongoing maintenance of the API, these fees would also be expensed as incurred. 

Given these core contracts, and the fees associated with them, can be quite voluminous, it is best practice to establish a list of the services and associated fees listed in the contract. An accounting determination can then be made in accordance with ASC 705 and 350-40 and listed next to each service/fee. Such a list can also be helpful in tracking the various credits and incentives that are being provided and how much of these credits and incentives remain to be utilized by your financial institution. 

It should be noted that the Financial Accounting Standards Board (FASB) has an ongoing project related to the accounting for and disclosure of software costs. More details and a current status update on the project can be found on the FASB’s website. A proposed Accounting Standards Update (ASU) was issued in October 2024. The proposed ASU would eliminate the project stages detailed above. Instead, costs would start to be capitalized when both of the following occur: 

1. Management has authorized and committed to funding the software project. 
2. It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). 

Again, this is just a proposed ASU at this time and until a final ASU is issued, financial institutions should continue to follow the project stage guidance detailed above in assessing the accounting treatment for the fees in their core contracts. As always, your BerryDunn team is here to help should you have any questions! 

FINRA is launching a broad review of its regulatory requirements to modernize rules, reduce unnecessary burdens, and support innovation in financial services. This initiative aims to enhance investor protection and market integrity by adapting regulations to evolving market conditions and technological advancements.

The review will begin with two key areas:

• Capital formation: Examining how regulations impact capital acquisition brokers, “limited purpose” broker-dealer models, research analysts, and capital-raising processes
• The modern workplace: Addressing regulations related to branch offices and remote work, registered representative credentialing and education, customer communication methods, and recordkeeping practices, particularly with respect to communications.

FINRA invites member firms, investors, and stakeholders to provide feedback on other areas that may require modernization, including economic costs, technological changes, and regulatory overlaps. The comment period is open until May 12, 2025, and submissions can be made online, via email, or by mail. The Regulatory Notice lists specific questions to consider when responding.

This effort aligns with FINRA’s commitment to continuous improvement through industry engagement, ensuring that regulations remain effective, efficient, and relevant to the evolving financial landscape.

Focused on providing industry expertise and advisory relationships that extend past audit and tax seasons, BerryDunn's Financial Services team can help you enhance, grow, and adapt your operations to surpass your future goals. Learn more about our team and services. 

Last month, in honor of Women's History Month, we had the opportunity to speak with two women making waves in the parks and recreation industry—BerryDunn’s Becky Dunlap and Lakita Frazier. Both have built meaningful careers driven by a passion for community impact and the outdoors, forging paths that inspire others in the field. 

Finding their calling in parks and recreation 

Lakita Fraser didn’t set out to work in parks and recreation—it found her. A summer job as a part-time recreation leader sparked an unexpected love for the field, leading her to make it her life’s work. “I quickly realized how much I loved engaging with the community and creating meaningful experiences for people,” she recalls. Over the years, she gained valuable experience in local government, eventually transitioning to consulting. Though she misses the day-to-day interaction of working within a team, she now helps parks and recreation professionals navigate challenges and build stronger programs. 

Becky Dunlap, on the other hand, discovered her passion in college when a professor encouraged her to consider parks and recreation as a career. “That conversation changed everything for me,” she says. Her journey took her through various leadership roles in local government before moving into consulting, where she enjoys the ability to innovate and drive change without bureaucratic obstacles slowing the process. 

Overcoming challenges as women in the field 

Lakita’s journey hasn’t always been easy. She recalls battling imposter syndrome early in her career as a young department head. “There were days when I questioned whether I truly belonged in a leadership position,” she admits. “But I leaned on my mentors, and they reminded me that I earned my seat at the table.” Today, she focuses on connecting with parks and recreation professionals, elevating the importance of their work and advocating for more opportunities for women in the field. 

For Becky, balancing ambition and personal commitments has been one of her biggest challenges. As a working mother, she has learned to manage her bandwidth—sometimes pulling back to ensure she can fully dedicate herself to the commitments she takes on. Despite these obstacles, she thrives on problem-solving and making tangible improvements in the field. “If I can help create better systems or funding models that make parks and recreation more effective, then I know I’m making a difference,” she says. 

Looking ahead: Challenges and optimism for the future 

Both women recognize the hurdles parks and recreation agencies face today, from funding shortages to the lingering effects of the pandemic. Lakita emphasizes the importance of resilience, believing the industry will continue to push forward despite challenges. “Our field is full of problem-solvers,” she says. “We’ve overcome budget cuts, crises, and uncertainty before, and we’ll do it again.” 

Becky shares this optimism, noting that the future will depend on strong leadership and innovative solutions. She encourages young women entering the field to believe in themselves and not be discouraged by setbacks. “Mistakes are part of the process,” she advises. “And how you respond to them is ultimately more important than the mistake itself.” 

What's next for these leaders? 

Lakita plans to continue supporting parks and recreation professionals through her work at BerryDunn, while also expanding efforts with Women in Parks and Recreation to create more opportunities for women in the field. Becky, meanwhile, is focusing on developing innovative technology solutions to help departments run more efficiently and improve service delivery. 

Their experiences highlight the impact of women's leadership in parks and recreation. Despite obstacles, they have helped shape the path for future generations, demonstrating how passion, resilience, and dedication contribute to meaningful progress. 

BerryDunn's Parks, Recreation, and Libraries team works with clients across the country to improve operations, drive innovation, identify improvements to services based on community need, and elevate your brand and image―all from the perspective of our team’s combined 100 years of hands-on experience. Learn more about our team and services. 

The construction industry presents some unique accounting and financial reporting requirements when it comes to construction work-in-progress (WIP) schedules. To keep a solid pulse on contract financial status and results, it is important that these schedules are accurate and up to date. Here are five of the more common mistakes we encounter when working with clients:

1. Inaccurate inputs for the WIP schedule

Achieving 100% accuracy can be challenging as the WIP schedule depends on four main inputs. The four inputs include:

• Projected total cost
• Contract value
• Job-to-date cost
• Job-to-date billings

A miscalculation in any of these can cause inaccuracies in your work-in-progress reporting of revenues and contract assets and liabilities.

2. Estimated under/overbilling costs that don’t match contract scope or reflect actual costs

Has the project scope changed without including the corresponding change order? This can result in overstated contract revenues and underbillings. Are total estimated costs greater than they should be? This can result in overstated overbillings and understated contract revenues which, if it happens consistently, can materially skew reported revenues and gross margin.

3. Change orders and billings that are improperly included or excluded

The main determination if a change order should be included in WIP schedule calculations is if it is a continuation of an existing contract and is signed and legally enforceable or at least has a mutually agreed-upon scope and is awaiting price agreement. If so, the projections should be updated to include the change order. This can get complicated, though, so be sure to check with your accountant if there is a question.

4. Not reconciling the WIP schedule to the financial statements

It is important to understand the WIP schedule and how it ties into financial reporting. The general ledger or internal financial statements should be reconciled with supporting external sources as well as internal calculations or spreadsheets, including the WIP schedule. This includes reconciling contract assets, contract liabilities, and related income statement accounts.

5. Not including all contracts on the WIP schedule–including open and closed jobs

The WIP schedule should include all contract amounts, no matter how big or how small, or whether they are open or closed. Open vs. closed jobs should be noted as such on the schedule. It is a best practice to include job numbers for each contract; this way jobs can be tracked month over month, or year over year, and a gain/loss fade analysis can be performed.

BerryDunn’s Construction team partners with clients to provide meaningful insights on best practices in building capacity, stabilizing cash flow in growth, reducing tax liabilities, capturing reimbursable local taxes, and navigating state nexus. Learn more about our team and services.