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Robert A. Wheeler
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Creating an environment for solving difficult challenges is a prerequisite for effective leadership. Occasionally, the challenges may be positive and fun to address, such as how to best take advantage of a new market opportunity.

However, anyone in a position of leadership will face adversity sooner or later. While I would not characterize problem-solving in the face of adversity as “fun,” it is nevertheless rewarding, perhaps even more so, as the stakes are often very high.

The challenges of 2020 have taught me a great deal about leading through adversity. When faced with a major challenge, there is typically no playbook for responding to the issues that spring up with little notice. That has been especially true this past year. You have to trust your instincts and make the best decisions you can, and then be willing to learn from your mistakes and course correct, as necessary.

Here are a few lessons I’ve learned and the guiding principles I used to effectively lead my team through difficult times, and which may prove useful for you.

Communicate Early and Often

Since the beginning of the pandemic, even before the economy was shut down, Clark Nuber’s leadership team used all the tools at our disposal to communicate often with our entire team. Early on, we conducted All-Firm “Update” meetings via Zoom roughly every three weeks. These have continued monthly as we settled into the ongoing reality of remote work. Prior to each meeting, we encourage people to post their questions to an anonymous survey, and I try to answer those questions live during the meeting, even if sometimes the answer is, “I don’t know yet.”

The philosophy of communicating early and often has been adopted throughout the firm. All department and team leaders have been proactive in meeting with their teams regularly and holding open conversations about the challenges of remote work and the impact of the pandemic on our daily lives. Human Resources has also sent regular updates via email, highlighting the resources that are available to all employees – everything from health care and mental health resources, to fun events to keep people connected.

In the end, everyone in the firm has played a role in maintaining open lines of communication, even though we are not in the same physical space.

Take Care of Your People

In 2008, at the beginning of the Great Recession, Clark Nuber made the decision to do everything in our power to preserve our work force, protect our team, and invest in their development, despite significant economic pressure. This later proved to be a very wise decision as the economy improved, and we were able to immediately take advantage of new opportunities.

In 2020, we doubled down on this commitment, and we have continued to invest in the welfare and development of our team. However, there is one big difference between 2008 and 2020. This time, we must also do all we can to ensure the health and safety of our people.

Even though our office is open to employees now, the vast majority of our team continues to work from home, and we have done everything we can think of to encourage and facilitate remote work. In the office, we meet or exceed state and CDC guidelines for keeping people safe. And, we have encouraged open dialogue about the challenges we face – especially when it comes to remote learning for parents with kids in school, and the impact social isolation can have on the mental health of so many of us.

Keep Your Eye on the Ball

In Jim Collins’ book “Great by Choice,” he discusses the concept of the “20 Mile March” as a way to exert a sense of control in a world that is out of control. The idea is that it is important to make decisions and take actions that allow you to maintain consistent progress toward your long-term vision, no matter what is happening in the world or in your industry.

This can be hard to do during difficult times when it might be easier to say, “We’ll get back to working toward our vision when things have settled down.” However, that’s when it is most important to stay focused on your long-term goals and to move toward them with a continuing sense of urgency.

Stay True to Your Core Values

“Clark Nuber is dedicated to the success of our people and our clients.”

This is our purpose – our “Why” – and as an organization, we have worked especially hard to live up to our purpose this past year, and to truly help our clients, our team, and our community.

Culture can be fragile, and even a positive culture can be difficult to maintain in the face of adversity.  However, a strong culture will also provide the foundation for an organization to survive and thrive. I have said recently that 2020 has shown who we are and what we’re made of, and I am very proud of how our team has responded.

Be Realistic…and Optimistic.

Another Collins book, “Good to Great,” posits that a company cannot be truly great unless its leaders are willing to “confront the brutal facts” of any difficult situation, while maintaining an unwavering faith that they can and will prevail in the end.

In this context, optimism isn’t a Pollyanna expectation that the current challenge will simply fade away. Rather, it is about having the faith to expect that your team has the discipline and creativity to overcome any roadblock to achieve the long-term vision of the organization. It is the leader’s responsibility to understand and communicate the “brutal facts,” as well as to demonstrate their unwavering confidence in the ability of the team to meet the challenge.

As I said at the beginning, I have learned a lot this past year. Not all the decisions we made in 2020 were perfect, and I expect that will be true in 2021 as well. However, if we continue to follow the ideas expressed here, I’m confident things will turn out ok.

This article is part of the Learning, Adapting, and Growing: Leadership Perspectives series, which explores the role of leadership from a diverse array of perspectives. Each article is written by a Clark Nuber leader who shares their ideas on the unique challenges and opportunities they have experienced, and the lessons they’ve learned along the way.

© Clark Nuber PS and Leadership Perspectives, 2021. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Clark Nuber PS and Leadership Perspectives with appropriate and specific direction to the original content.

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Retroactive Changes to the Paycheck Protection Program for 2020 Borrowers

On December 27, 2020, the Consolidated Appropriations Act of 2021 (CAA) was signed into law. In addition to funding new Paycheck Protection Program (PPP) loans, the CAA relaxed certain rules governing the program and made many retroactive changes applicable to PPP loans issued in 2020. If your organization took advantage of the PPP loan program in 2020, below is a summary of the program rules, before and after the passage of the CAA. [table id=30 /]

Guide to PPP Loan Forgiveness

If you are looking for more information, we have published a five-part series on PPP loan forgiveness. Some of these articles were originally published before the passage of the CAA and do not reflect the recent modifications to the rules. If you have any questions regarding PPP loans, the forgiveness process, employee retention tax credits, or any other available Coronavirus relief options, please contact a Clark Nuber advisor. James Casey Byers - Audit Manager at Clark Nuber PS Casey Byers is a manager in Clark Nuber's Audit and Assurance Services Group. ©2021 Clark Nuber PS. All rights reserved.

Changes to the Employee Retention Credit

The Employee Retention Credit (ERC), introduced in March 2020 as part of the CARES Act, was a much-needed funding source for many employers. However, many were ineligible to claim the credit in 2020 as they opted to receive funding through the Paycheck Protection Program instead. With the recent enactment of the Consolidated Appropriations Act of 2021, the rules have changed. The ERC is now more favorable than ever and could yield a large refund for your organization. With the recent law changes, the restriction for PPP loans has been retroactively removed. This means employers can go back and claim the ERC for 2020, even if they received a PPP loan. Employers just need to make sure they aren’t double dipping on the wages. In other words, wages being characterized as qualifying expenses for PPP loan forgiveness can’t also be used for the ERC calculation. Additionally, there are enhanced benefits for Q1 and Q2 of 2021, including:
  • an expansion of the credit to $10,000 in quarterly wages (rather than the annual wage limit),
  • allowing up to 70% of wages as a credit (previously it was 50%), and
  • raising the full-time employee threshold to 500 employees (previously the expanded credit was allowed for employers with 100 or less full-time employees).
If your organization was, or is still, facing the inability to operate at full capacity due to government restrictions, or if it is experiencing a more than 50% (2020) or 20% (2021) decline in gross receipts when compared to that same quarter in 2019, do not ignore the employee retention credit. There is a potential for large tax savings that can provide immediate cash flow to your organization.

Summary of Changes for the ERC

Below is a summary of what has changed under the new Consolidated Appropriations Act for the ERC.  For a more detailed analysis of the ERC laws under the CARES Act, especially for employers considering a retroactive claim for 2020, please see our prior article on the topic. [table id=25 /]

ERC Example

To demonstrate how beneficial this credit may be, let’s walk through an example: A school typically has 75 full-time employees. It received a PPP loan in April 2020 and therefore didn’t claim the ERC during 2020. The school was remote for the end of the 2020 school year and started the 2021 school year in hybrid mode. Many of its extracurricular activities are still unable to continue due to COVID restrictions. Each employee is paid at least $10,000 per quarter in 2020 and 2021. [table id=26 /] Under this example, the school may be eligible for a 2021 credit of $1,050,000. The school may also retroactively file a refund claim for the credit in 2020 due to the eligibility changes to PPP loan recipients. The retroactive calculation for 2020 is as follows: [table id=27 /] Under this example, the school may receive a 2020 retroactive refund of $375,000 for wages paid. In the end, the school may be eligible for a total refundable credit of $1,425,000 as a result of the recent changes to the credit calculation.


Given recent law changes, do not ignore the employee retention credit. Many employers that were originally ineligible due to receiving a PPP loan are now able to utilize this credit as well. The ability to retroactively receive a refund for 2020 qualifying wages and expanded credit opportunities in 2021 may give your organization a sizeable refund and immediate cash flow. If you have additional questions, please contact your advisor at Clark Nuber for up-to-date information on the latest rules surrounding the Employee Retention Credit. ©2021 Clark Nuber PS. All rights reserved.

Provider Relief Funds: Reporting – Key Matters and Requirements as Guidance Continues to Evolve

Recipients of Provider Relief Funds (PRF) under the CARES Act have spent 2020 and the beginning of 2021 navigating the evolving guidance related to this program. There have been many questions related to PRF and, ultimately, the reporting that will be required. On Friday, January 15, 2021, the Provider Relief Fund Reporting Portal opened for registration and PRF recipients are now getting closer to final guidance on what will be necessary to include in the December 31, 2020 report that is due in early February. Given the guidance we now have available, this article will give a brief overview of the report and its requirements.

Who do the Reporting Requirements Apply to?

With the opening of the Provider Relief Fund Reporting Portal, the Health Resources and Services Administration (HRSA) also released a memo on Post-Payment Notice of Reporting Requirements - January 15, 2021. This new guidance supersedes the guidance issued on November 2, 2020. Any organization that received PRF funding in excess of $10,000 (in the aggregate) will be required to submit data elements in the post-payment reporting process, with the exception of PRF funding noted in the sections below that is excluded from this reporting requirement.

What Distributions do the Reporting Requirements Not Apply to?

While there has been guidance on certain types of PRF distributions, there are other types of PRF distributions that are not subject to the current reporting requirements and may have separate requirements. These include the distributions for Nursing Home Infection Controls; Rural Health Clinic Testing; and HRSA’s COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program and the HRSA COVID-19 Vaccine Administration Assistance Fund. For guidance on these specific distributions, see the HHS Provider Relief Fund Reporting and Auditing website. For organizations that received the Nursing Home Infection Controls distribution, it is still recommended that you register on the Provider Relief Fund Reporting Portal.

What are the Current Reporting Requirements?

For organizations to which the reporting requirements do apply, there are key data elements that must be included in the report, including:

Use of Funds:

The report will require disclosure of the use of the funds. The organization should report this using the standard method of accounting they use for other reporting purposes or internally as applicable (accrual vs. cash basis). The use of the funds would first include healthcare related costs attributable to the coronavirus. Additionally, these costs cannot have been reimbursed or been obligated to be reimbursed by another source. Examples include payments received from insurance and/or patients and amounts received from federal, state, or local governments. If PRF payments remain after applying eligible healthcare related expenses, then the organization may apply the rest of the funds towards lost revenue. The current guidance notes that organizations must choose one of three options for calculating lost revenues:
  • First, the lost revenue can be calculated based on the difference between 2019 and 2020 actual patient care revenue.
  • Second, lost revenue can be calculated based on the difference between 2020 budgeted and actual 2020 patient care revenue. If budgets are used, the 2020 budget must have been approved prior to March 27, 2020 and further support will be required upon submission.
  • Lastly, lost revenue may be calculated based on any reasonable method of estimating revenue. However, if an organization uses this approach, there are further requirements that they will have to submit related to descriptions and explanations for the methodology. The organization also increases the likelihood of an audit by HRSA due to the subjective nature of this option. If HRSA determines that a reasonable method is not used, the organization must resubmit their report with 30 days using actuals or budgets for the lost revenue calculation.
Additionally, if not all of the PRF funding is expended by December 31, 2020, organizations have an additional six months to spend the funding and will have additional reporting requirements.

Demographic Information:

The report will also require organizations to submit certain demographic information. The information will include each reporting entity and the type of PRF funding received by the entity. Organizations will also include the Tax Identification Number, National Provider Identifier (optional), fiscal year end date, and federal tax classification. Additionally, if the Reporting Entity is a parent entity, the parent entity may transfer targeted distributions from one subsidiary to another subsidiary eligible health care provider of the parent organization, even if the targeted distribution was issued to the first subsidiary. However, the responsibility for reporting the reallocated reimbursement shall remain with the original recipient of such reimbursement, and these transfers do increase the likelihood of an audit by HRSA.

Additional Provider Payment Information:

Lastly, there is a number of other items that will be included in the report. If an organization held the PRF funding in interest-bearing accounts, the amount of interest earned on the PRF funds must be reported. Any interest earned will be applied to the uses of the PRF distributions. The report will also require details on the 2020 facility, staffing, and patient care on a per quarter basis for 2020. This will include personnel metrics, patient metrics, and facility metrics. The organization will need to report any changes in ownership, including entities that were acquired or divested. If the organization itself was acquired or divested, it should also self-report that change. The report will require disclosure of other assistance the organization received including, but not limited to, Treasury assistance (Small Business Administration and Paycheck Protection Program), Federal Emergency Management Agency, CARES Act testing, local/state/tribal government assistance, business insurance, and other federal/coronavirus related assistance. Finally, the reporting requirements also require the organization to report if they are subject to a Single Audit under 45 CFR 75.501 in 2020 and if the auditors selected PRF disbursements as a program under the audit, but only if known at the time of submission. See our previous article highlighting the PRF audit requirements here.

What is Included in Healthcare Related Expenses?

Healthcare related expenses under PRF consist of costs incurred to prevent, prepare for, and/or respond to coronavirus. Under the reporting requirements, the level of detail that is included for healthcare related expenses depends on the level of disbursements that were received. If under $500,000, then organizations need only to report expenses in two categories: 1) General & Administrative (G&A) expenses and 2) other healthcare related expenses. These would be net of any other reimbursed sources. If the organization received $500,000 or more in PRF disbursements, then the organization is required to provide more detail for the two categories. G&A would be broken down into mortgage/rent, insurance, personnel, fridge benefits, lease payment, utilities/operations, and other G&A. Other healthcare related expenses would be broken down into supplies, equipment, information technology, facility, and other healthcare related expenses. Again, these would be net any other reimbursed sources.

What is Included in Lost Revenues?

Even if the organization expends all of the PRF payments on eligibly expenses, the report will still require that the organization provide, at a minimum, the 2020 actual patient care revenue as compared to 2019 actual patient care revenue. If the organization additionally claims lost revenue to apply to PRF payments, there will be additional reporting required. Organizations will be required to report total revenue (net of uncollectible patient service revenue recognized as bad debts) or net charges from patient care related sources in 2020. It is important to note that the current guidance does not make reference of the implicit price concession. However, as patient revenue is reported net of the implicit prices concessions, and they specifically note backing out bad debt, organizations should anticipate reporting revenue net of any implicit price concessions. Additionally, patient care is meant to exclude insurance, retail, or real estate values and grants/tuition unrelated to patient care. However, there is an exception for skilled nursing facilities, where insurance, retail, and real estate values may be allowable as part of patient care. Organizations will report total revenue/net charges from patient care by quarter by payor mix. Payor mix will include Medicare Part A or B, Medicare Part C, Medicaid/Children’s Health Insurance Program, commercial insurance, self-pay, and other. Depending on which option the organization chose for reporting loss revenue, there will be different requirements for 2019 actuals, 2020 budgets, or reasonable estimate for revenue.

What Resources are Available?

HHS has a website dedicated to PRF and all the requirements. The website includes a section for the reporting and auditing requirements under PRF. As new guidance is released, this website is updated for all changes. It also includes additional resources for providers, frequently asked questions (FAQs), and overall data on the distributions. The FAQs are routinely updated with further information and should be reviewed by each organization that receives PRF. Organizations should also reach out to their auditors for any further guidance. Auditors are additionally waiting on guidance on the PRF report and what items will be subject to audit under the Single Audit or Financial-related audit. This guidance is expected to be released by the Office of Management and Budget’s Office of Federal Financial Management in early February 2021. Lastly, HRSA has given notice that it plans to have Question and Answer Sessions available via webinar before the reporting deadline.

What are the Next Steps?

If you haven’t already, register your organization on the Provider Relief Fund Reporting Portal if the organization received more than $10,000 in PRF payments. The registration process is estimated to take about 20 to 30 minutes, and it is the first step in the reporting process. It is important to note that the portal does not save information if closed mid-registration. As such, the registration should be completed in one session. Once registered, HRSA will notify you via email when the second step is available. The second step will be the actual submission of the December 31, 2020 report. If you have any questions on PRF reporting, please contact a Clark Nuber advisor. ©2021 Clark Nuber PS. All rights reserved.

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