Dale Cottrill Begins Professional Transition

Dale Cottrill CPA - Pittsburgh CPA Firm

After a 40-year career in public accounting and having served as president since founding our firm in 1984, Dale Cottrill has decided to begin a professional transition.

He will remain with the firm on a part-time basis over the next 12 to 18 months and continue servicing clients as he transfers his responsibilities to others in the firm. During this period, Dale will be grooming a successor for the firm’s growing Contracted Services practice niche.  

He and all of our shareholders are committed to providing a smooth period of transition for our clients. Dale’s decision to begin the orderly process of exiting the firm underpins the firm’s commitment to seamless business succession and the importance of providing opportunities and pathways for younger members of our firm to grow in their careers and assume additional leadership roles.

At the same time, Dale will be assuming the role of CFO with the Allegheny County Airport Authority. With Dale having spent the past several months leading the Authority’s finance department on an interim basis through our firm’s Contracted Services practice niche, and after the Authority’s national search for a CFO, his role will evolve from a contracted position to CFO effective May 8, 2017.  

This comes at an exciting time when, led by CEO Christina Cassotis, the Pittsburgh International Airport has been named Air Transport World’s 2017 Airport of the Year, joining the ranks of Hong Kong International, London Heathrow and Singapore Changi.

Our firm name is blessed to enjoy goodwill for delivering high quality and valued professional services, and there are no immediate plans for the name to change.

Please join with all of us at Cottrill, Arbutina & Associates in congratulating Dale and extending our most heartfelt good wishes in this new phase of his life and career.

Business Relocation Benefits Offered by IRS Code Section 1031

By Joe Bevevino

All of Western Pennsylvania knows that Shell Oil Company (Shell) is going to start construction of an ethane cracker plant in 2018. We can’t begin to tell you about the mechanics of a cracker plant, but what we can tell you is that some previous business owners of land parcels near the plant site received some handsome prices for their land and buildings.  That’s the good news for them!  The bad news is that there are serious tax consequences as the result of these generous sale prices.

However, there is a silver lining thanks to an unlikely source – the Internal Revenue Service (IRS). Believe it or not, there is a way to defer the tax consequences of significant gains on the sale of business land and buildings.  Section 1031 of the IRS regulations addresses these issues.  Here’s how it works:

Assume a business land owner sells their property to Shell for $2,000,000 and generates a $1,500,000 gain. The land owner, wanting to relocate his or her existing business, identifies a similar replacement property for at least $2,000,000 within 45 days and closes on the purchase of the replacement property within 180 days.  In this case, Section 1031 dictates that no gain is required to be immediately recognized on the sale of the property to Shell.  Instead, the seller records a deferred gain in the amount of $1,500,000 as the seller is not required to report the gain until the replacement property is sold and is not replaced.

This is a simplified example of the workings of IRS Code Section 1031, but it can be adapted, modified, and made to fit to accommodate many versions of the sale and replacement of real estate. While the gain on the sale of the land cannot be fully eliminated, it can be deferred and with proper tax planning, can possibly be minimized and allow you to keep more of your profits.

Contact us today to assist you with your questions regarding Section 1031 or other tax matters.

Exception Loan Management

By Michele Renz

Written loan policies, approved by the Board of Directors and adhered to by management in practice, are of upmost importance in managing risk within a credit union’s loan portfolio. Loans approved in accordance with established internal control procedures and prescribed underwriting criteria are within the level of credit risk pre-determined to be acceptable within the portfolio considering the credit union’s complete financial picture.  Loans approved that are not in accordance with established internal control procedures or outside of the prescribed underwriting criteria are exception loans. 

I have yet to come across a credit union that does not allow exception loans; as a matter of fact, many loan policies specifically allow for the approval of such loans. This makes sense as it is the primary mission of credit unions  to help its members, especially its members with proven credit history.  To reject a loan application from a long-time member who has consistently paid on numerous loans to the credit union over the past 10 years because he or she is 2% over the policy-established debt-to-income ratio isn’t serving the need of a proven, credit-worthy member, nor does it make good business sense for the credit union.

Arguably, one exception loan will likely not make much of a difference; however, it is undeniable that each and every approved exception increases the credit risk within a loan portfolio beyond the level of risk pre-determined by the Board of Directors as acceptable. Not only do approved exceptions increase credit risk within the portfolio, but they also increase the credit union’s exposure to fair lending risk.  Therefore, it is of utmost importance to understand how many exception loans exist within your portfolio and the overall aggregate effect of these risks within the loan portfolio. 

Following are four components of an effective exception loan management program:

Defining Exception Loans. First and foremost, in a quality exception loan management program, the Board of Directors must ensure that loan policies clearly define a process for approving exception loans. Exception loans should require additional approvals outside the normal loan approval process and the extent of additional approvals should commensurate with how far an exception loans falls outside of the established underwriting criteria. For example, a compromise on a loan that falls a few points outside of the established credit score range or a reduction in interest rate due to a competitive situation may only require the approval of the lending manager (or CEO in smaller institutions) in addition to the lending officer. However, a decision on a loan that violates several of the established criteria or relates to an employee or other related party may not require only the additional approval of the CEO, but the lending committee and/or the board of directors as well.

File Documentation. Exceptions must be required to be well documented within the loan file. A standard exception reporting form should be used where independent exception decisions can be documented, visible, and stand on their own within the loan file. Denied exceptions should also be documented in this manner. This is especially important to diminish fair lending risk.

Exception Reporting. A loan exception reporting system must be put in place and executed. An exception reporting system should include the reporting approved and denied exceptions, individually and in the aggregate, to the Board of Directors. The individual reporting should include the reasoning for each exception decision reached. The aggregate reporting should include the total number of exceptions considered, approved, and denied. Increased reporting of exceptions over time may indicate trends resulting in an increased level of credit risk within the portfolio. The number of exceptions reported and subsequent charge-off activity may provide an indication that loan policies are too general or too restrictive, thus requiring examination and possible adjustment of policies to coincide with the desired level of risk to be assumed in achieving the financial and membership goals of the credit union.

Loan Reviews. To determine the effectiveness of your loan exception compliance system, periodic independent loan review audits should be performed to determine that loans are being processed according to stated procedures and in compliance with loan underwriting criteria set forth in the credit union loan policy. For any loans identified as exceptions that have not been reported, a reason can be determined and action taken to revise or improve procedures or to train staff accordingly.

A loan policy can never cover every possible lending or underwriting situation that your members will present with; making loan exceptions will continue to be a standard lending practice. An effectively implemented and executed exception loan management program is integral tool in helping credit union management monitor credit risk within a lending portfolio. 




Cottrill Arbutina Promotes Bowser and DiBenedetto to Senior Accountant

Staff Promotions - Pittsburgh CPA Firm


BEAVER, PA – April 11, 2017 –Tiffany Bowser and Nathaniel DiBenedetto have been promoted to senior accountants with Cottrill, Arbutina and Associates P.C. of Beaver, one of the region’s 25 largest public accounting firms.

Bowser, a resident of Beaver Falls, is an auditor for school districts and small government bodies in addition to non-profit and for-profit organizations and real estate tax collectors. She received dual bachelors of science degrees in accounting and in finance from Geneva College (2011) and currently is enrolled in a master’s in school business leadership program at Wilkes University.

DiBenedetto, also of Beaver Falls, is an auditor who primarily focuses his practice on serving credit union clients, providing internal audits, agreed-upon procedures, cash counts and Bank Secrecy Act, Automated Clearing House and other compliance audits. He holds a bachelor of science degree in accounting from Geneva College (2014).

More: www.cottrillarbutina.com

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Listen to Arbutina Podcast: “What the Shell Cracker Plant Means for CPAs”

PICPA CPA Conversations - Pittsburgh CPA Firm Tod Arbutina - Pittsburgh CPA Firm With construction expected to begin this year on a Shell petrochemical cracker plant in Beaver County, PA, Cottrill Arbutina managing shareholder Tod Arbutina, a member of PICPA’s Natural Resources Committee, records a CPA Conversations podcast with host James DeLuccia of the PICPA about what this plant could mean for the Pennsylvania economy and for local CPAs. Listen to this insightful conversation >>>

“The Fair Labor Standards Act 2016” – Cottrill Arbutina Academy

CA Academy - Pittsburgh CPA Firm Cheryl Ann Bean, President of Compass Resources, presented at a simulcast Cottrill Arbutina Academy class and webinar on “The Fair Labor Standards Act 2016” on July 27, 2016.

Cheryl’s presentation reviewed the recent changes to the FLSA. She highlighted what did not change and focus on the most significant change: the exempt versus non-exempt salary basis test.

She also discussed how an employer can manage the change and ensure compliance with this federal law.

View the presentation – [211MB, WMV file, 1:08:54 hours]


Fair Labor Standards Act - Pittsburgh CPA Firm

Cheryl Bean with Cottrill Arbutina’s Lawrence Zahn (left) and Joseph Bevevino


“Social Security: The Choice of a Lifetime” – Cottrill Arbutina Academy

CA Academy - Pittsburgh CPA Firm The first class of Cottrill Arbutina Wealth Management Group’s new Cottrill Arbutina Academy on “Social Security: The Choice of a Lifetime,” was presented by Carlo Cordasco, CRPC, CLTC, RICP, Vice President of Nationwide Retirement Institute, on Weds., June 22, 2016 at noon and again at 6:30 p.m. in our conference center at 535 Third Street.

At a time of continuing uncertainty in global financial markets, when some financial planners in our region are under pressure to achieve quotas by selling their own proprietary products, or struggling to achieve the rigid standards needed to maintain professional licensure, it’s critical for our community to be as educated as possible with unbiased, independent information.


CA Academy Wealth Management - Pittsburgh CPA Firm

Carlo Cordasco


Carlo joined Nationwide in 2010 with more than 20 years of financial industry experience. He is dedicated to educating advisors, clients, plan sponsors and plan participants about the latest in retirement income planning trends. He brings more than 25 years of experience and education to implement practical and comprehensive retirement income solutions.

Carlo’s areas of specialization in retirement income planning strategies include health care costs, long-term care costs and determining optimal Social Security filing strategies. He is responsible for the sale of immediate annuity products which allows him to create unique income streams to address clients’ retirement needs.

He is a graduate of Charter Oak State College where he majored in Business Administration with a concentration in Finance. In addition to his CRPC, CLTC and RICP designations, Carlo is FINRA series 6, 63 and 26 licensed.


Securities offered through LPL Financial, member FINRA/SIPC.

Carlo Cordasco is not affiliated with LPL Financial. Cottrill Arbutina & Associates, Cottrill Arbutina Wealth Management, Nationwide and LPL Financial are all separate entities. There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to effect some of the strategies. Investing involves risks including possible loss of principal.

Fixed annuities are long-term investment vehicles designed for retirement purposes. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 are subject to a 10% IRS penalty tax and surrender charges may apply.

Scala to Lead Cottrill Arbutina Academy QuickBooks Seminar

QuickBooks Essentials - Pittsburgh CPA Firm

Laura Scala - Pittsburgh QuickBooks Consulting Laura Scala, an accountant and business consultant with Beaver public accounting firm Cottrill Arbutina & Associates, and an Intuit-certified QuickBooks® “Professional Advisor,” will lead Cottrill Arbutina Academy seminars on “QuickBooks Essentials” on June 23, 2016.

Content for the four-hour Academy classes will include learning the most common mistakes in QuickBooks that can hurt a business and how to use QuickBooks to improve overall company performance. Other insights will range from QuickBooks errors that can hurt cash flow and bottom line, and mistakes to avoid in costing and why they matter, to ways to reduce payroll headaches and reports that will stop wasted expenses and reduce overhead.

Print Cost is $147. Classes will begin at 9 a.m. and conclude at 1 p.m. A light lunch will be served. Payment may be made via credit card or check.

How to RSVP or Receive Future Invitations – Contact Thomas Helsing at thelsing@cottrillarbutina.com – 724.683.3402.

About Cottrill Arbutina Academy – Cottrill Arbutina Academy is an initiative launched in 2016 by Cottrill Arbutina & Associates, a Pittsburgh Business Times “Top 25” public accounting firm. It will provide high quality finance, wealth management, insurance, retirement planning and lifestyle education for clients and friends. During the year, one or more classes will be held each month on a variety of topics and feature a host of speakers.

About Laura Scala – As a member of Cottrill Arbutina’s Contracted Financial Services Group, Scala provides QuickBooks accounting and consulting for nearly 50 closely held businesses and non-profit organizations. She also has advised municipalities in converting outdated fund accounting systems to QuickBooks. She has advanced Intuit certification as a QuickBooks “Professional Advisor” in every version of the popular software since 2002. With this expertise, she trains client personnel in how to use this powerful tool for managing accounts payable, accounts receivable and payroll.

More: www.cottrillarbutina.com

Bradley Center, Cottrill Arbutina Team for Angel Tree Gifts for Kids at Risk


Angel Tree Gifts for Kids - Pittsbrugh CPA Firm


ROBINSON TOWNSHIP – Jan. 29, 2016 – To support the recent Angel Tree fundraising program for The Bradley Center – a leading provider of behavioral healthcare and child welfare services – Cottrill Arbutina and other companies donated Christmas gifts based on the wish lists of more than 100 children, ages six to 18, who live at the Center, and another 30 youth who attend its day school.

Bradley_Center_LogoFounded in 1905, The Bradley Center helps children with mental and behavioral health issues, and specializes in treating children with histories of abuse, neglect and other trauma. Common diagnoses include post-traumatic stress, bipolar, and attention deficit disorders, and depression, schizophrenia, and autism.

Bradley helps heal these children with a comprehensive program that includes clinical, therapeutic, educational, and transition services to help them move past their histories of trauma and begin building new lives full of possibilities.

To learn more, visit www.thebradleycenter.org.


Cottrill Arbutina Promotes Rihely to Shareholder, Renz to Director

Lucas Rihley CPA - Pittsburgh CPA Firm MIchele Renz CPA - Pittsburgh CPA Firm
Rihely Renz

BEAVER, PA – Jan. 27, 2016 – Cottrill, Arbutina & Associates, a Pittsburgh Business Times “Top 20” public accounting firm based in Beaver, has promoted Lucas Rihely, CPA to shareholder and Michele L. Renz, CPA to director.

Rihely is responsible for managing audit and tax engagements. This includes tax minimization strategies and income tax compliance, research and consulting services for individuals, partnerships and corporations. He also specializes in audits of defined contribution employee benefit plans and has helped navigate plan management through Internal Revenue Service and Department of Labor regulations. He also is a certified fraud examiner and has helped clients detect and deter fraud and assisted victimized organizations in obtaining insurance recoveries of more than $75,000. He obtained his bachelor of science degree in accounting in 2006 from Robert Morris University.

Renz also is a leader of the firm’s Credit Unions and Financial Institutions Division and works with clients to provide traditional financial and internal auditing services. She also specializes in regulatory compliance audit consulting. Her regulatory compliance assistance areas include National Credit Union Administration (NCUA) Supervisory Committee requirements, Bank Secrecy Act, Automated Clearing House, Secure and Fair Enforcement for Mortgage Licensing Act, Home Mortgage Disclosure Act and website compliance. She obtained her bachelor of science degree in accounting in 1993, magna cum laude, from Indiana University of Pennsylvania.

Cottrill Arbutina also has offices in Pittsburgh and Peters Township. For more, visit www.cottrillarbutina.com.