H2R CPA and Cottrill Arbutina Announce Merger; Combined Firm to be Called H2R CPA

Pittsburgh, PA – Dec. 5, 2019 – Pittsburgh-based H2R CPA and Cottrill, Arbutina & Associates PC of Beaver County announced that they will merge into one firm, effective January 1, 2020. The staff of both firms will operate as H2R CPA, while maintaining their existing office locations in Parkway Center and downtown Beaver. The combined firm, with 10 partners and over 80 team members, will remain an independent regional CPA firm serving clients in the middle market, with expanded service offerings and additional resources that will help to fuel continued growth.

“We are pleased to be combining resources with a firm like H2R CPA that has a similar culture, family business values, complimentary skills in different practice areas and a shared vision of meeting the future needs of our clients and employees,” said Tod R. Arbutina, CPA, CFP, MBA, Managing Partner of Cottrill Arbutina.

“We are very excited that our merger with Cottrill Arbutina will enable H2R CPA to continue the culture and service to our clients that is reflected in our firm commitment: Business Solutions, Family Approach,” said Paul K. Rudoy, CPA/PFS, Managing Partner of H2R CPA. “The leaders at Cottrill Arbutina have the same client service dedication and commitment to employees that creates a great working atmosphere with quality middle market clients. The Partners of H2R CPA are committed to providing a locally owned, family atmosphere culture for the foreseeable future and merging with Cottrill Arbutina will be a perfect fit for that goal,” he added.

Tod Arbutina Paul Rudoy


Monaca, PA, March 26, 2019 – Big Brothers Big Sisters of Beaver County (BBBS) and the Community College of Beaver County (CCBC) are launching an innovative workforce development program aimed at bringing neighboring high school students to CCBC’s campus to develop one-on-one mentoring relationships with college leaders.

This effort is made possible by a $10,000 donation from two Beaver-based businesses, the public accounting firm of Cottrill Arbutina & Associates and the financial planning firm of Cottrill Arbutina Wealth Management Group, and a $5,000 matching contribution from CCBC.

Modeled after the Beyond School Walls Workplace Mentoring program, this personalized approach offers students exposure to the programming at CCBC and connects them with executive leadership at the college to advise and support their personal, educational and professional goals.

“This is our first partnership to get off the ground in the workplace mentoring program. We cannot do this by ourselves, and we feel incredibly fortunate to have great partners at Cottrill Arbutina, CCBC and Central Valley School District to launch this effort,” said Kim Anastas, Executive Director, BBBS of Beaver County.

The goals of CCBC’s new mentoring program are to introduce youth to jobs earlier in their school years, allow them to experience what it means to work for a corporation or government agency, inform them of the education requirements needed to achieve professional success, and build a strong and supporting mentoring relationship.

In addition to mentoring at least 15 students from the Central Valley, the program will provide a valuable opportunity to expose the students to CCBC’s nationally-recognized High School Academies and place them on guided pathways in high-demand career fields such as professional piloting, nursing, process technology, coding, criminal justice, and construction management.

“As a former BBBS ‘Big’ I know first-hand the life-changing impact these mentor relationships can have in the community,” said Roger Davis, President, CCBC. “We’re incredibly thankful for the philanthropic support of the Cottrill Arbutina firms to launch this program, and we see this as another puzzle piece to help people in our community move their lives forward.”

The program will launch in March 2019 and will run for nine months with student participants visiting CCBC monthly to meet with their CCBC “Big” for lunch and to explore a new career path during each visit.

“I’ve had the good fortune to be a board member for both BBBS of Beaver County and the CCBC Foundation and see the life-changing impact both of these organizations have in our community,” said Tod Arbutina, Managing Shareholder, Cottrill Arbutina and Associates and Managing Member, Cottrill Arbutina Wealth Management Group. “I see incredible opportunity for them to work together and I’m glad the two Cottrill Arbutina firms are able to help make that possible.”

About Community College of Beaver County – CCBC transforms lives through personalized education, dynamic partnerships, and high impact practices. CCBC is an Achieving the Dream Leader College and offers 64 degree, certificate and diploma programs, hundreds of Continuing Education and Workforce Development programs, seamless transfer to a wide variety of baccalaureate and graduate institutions, and a nationally distinctive high school academy dual enrollment program. The Aspen Institute named CCBC one of America’s Top 150 community colleges in 2017.

About Big Brothers Big Sisters of Beaver County – The Big Brothers Big Sisters mission is to help children reach their potential through professionally supported, one-to-one relationships with caring and committed Big Brothers, Big Sisters, and Big Couples. Programs are designed to assist at-risk children from primarily low-income families. Youth development experts agree that at-risk children benefit from having additional supportive, caring adults in their lives to instill confidence and self-worth.

About Cottrill Arbutina and Associates – With offices in Beaver and Pittsburgh, and founded in 1984, Cottrill Arbutina is one of the largest privately-owned public accounting firms in Western Pennsylvania and a Pittsburgh Business Times “Top 25 public accounting firm.”

About Cottrill Arbutina Wealth Management Group – Cottrill Arbutina Wealth Management Group specializes in comprehensive wealth planning to help individuals pursue focused goals to provide a range of investments and income that seek to meet their needs. Securities offered through LPL Financial, Member FINRA/SIPC. Tax and accounting services provided by Cottrill, Arbutina & Associates, Inc. are not affiliated with Cottrill, Arbutina Wealth Management Group nor LPL Financial.

You can read more about this program here:  https://www.timesonline.com/news/20190327/ccbc-big-brothers-big-sisters-create-mentoring-program


Cottrill Arbutina’s Rihely Named to Beaver County Rehabilitation Center Board

Lucas Riley CPA - Pittsburgh CPA Firm

BEAVER, PA –March 11, 2019 – Lucas Rihely, CPA, CFE, a shareholder and tax practice leader with Cottrill Arbutina & Associates, P.C. of Beaver, has been elected to the board of directors of the Beaver County Rehabilitation Center.

Based in Center Township, BCRC (www.bcrc.net/) helps people with intellectual, developmental, psychiatric and co-occurring disabilities to secure employment, work toward recovery, achieve increased independence and participate in their communities.

Rihely leads Cottrill Arbutina’s tax practice and has experience in serving closely held businesses and employee benefit plans. As a certified fraud examiner, he has helped clients detect and deter fraud and assisted victimized organizations in obtaining insurance recoveries. View Lucas Rihely profile.

With offices in Beaver and Pittsburgh, Cottrill Arbutina is one of the largest privately-owned CPA firms in Western Pennsylvania and a Pittsburgh Business Times “Top 25 public accounting firm.”

Cottrill Arbutina Cares About… Educating and Developing Community Leaders

By:  Michele Renz

“Cottrill Arbutina Cares About…” is a blog that highlights the employees and community service of Cottrill Arbutina.

On Friday, January 18, 2019, Joel Martin, Audit Group and Contracted Services Shareholder, presented to the 2018-19 participants of Leadership Beaver County on the topic “Fiduciary Responsibilities of Non-Profit Boards”.  Drawing from his over 20 years of professional experience in providing audit and consulting services to numerous clients and their boards of directors in both the non-profit and governmental sectors, Martin discussed the fundamental roles, responsibilities, and liability of fiduciaries.  He also offered his insights and suggestions regarding best practices of effective board leaders and members.

As per their website, Leadership Beaver County is designed for existing and emerging leaders within Beaver County and is administered by the Beaver County Chamber of Commerce.  The goal of the program is to “…educate on the most important opportunities, challenges, and issues within the county and region in order to cultivate diverse and well-rounded leaders to carry our community forward.”  More information regarding Leadership Beaver County can be found on the Beaver County Chamber of Commerce website.

Joel Martin can be contacted directly at jmartin@cottrillarbutina.com.

And the results are in…2018 CAA Annual Ugly Christmas Sweater/Jacket Contest

2018 Participants

Back row (left to right):  Tom Helsing, Lucas Rihely

Middle row:  Katie Pagan, Brian Sprinker, Vito Farelli, Larry Zahn, Nicholas Raught

Kneeling:  Paula Ledbetter, Shannon Snyder, Marilynne Donnelly

And the winners are…

First Prize:  Vito Farelli (Vito is our I.T. guy!)

Second Prize:  Shannon Snyder

Third Prize:  Paula Ledbetter

Vito proudly displaying his awards.

CAA Employee Spotlight: Katherine Pagan

Katherine (Katie) Pagan is a staff accountant who does triple-duty at Cottrill Arbutina splitting her time between the tax, consulting, and audit departments.  She assists in the preparation of individual and corporate tax returns and works on government and credit union audit and consulting projects. 

Katie joined Cottrill Arbutina in January 2016 as an intern in the tax department and joined us full-time shortly after her graduation from Geneva College.  She completed and passed all four parts of the CPA exam in February 2018 (on her first try, which is not easy!) and is currently enrolled in classes to complete the Pennsylvania State Board of Accountancy 150-credit hour requirement to apply for her CPA license.  If all goes as planned, Katie expects to be a licensed CPA in January 2019.

In September 2018, Katie got engaged to her boyfriend of four years, Wayne Butler, and they are planning a May 2020 wedding on Sherwood Forest Beach in Hawaii.  She and Wayne have a 2-year old Siberian Husky named Howlitzer.  Katie enjoys traveling and has been in 20 different countries and all over the United States.  Most recently, she and Wayne visited Chicago and went hiking in Colorado.  In addition to hiking, Katie enjoys bowling, hanging out with friends, trying new restaurants, and spending time with her 3-year old sister, Sofia.

Katie says that the best part of her job here at Cottrill Arbutina is “…building professional relationships while providing accounting and compliance expertise.” 

We appreciate Katie and the many roles that she fills here at Cottrill Arbutina!

The Most Important Steps That You Can Take to Combat Embezzlement in Youth Sports and Other Organizations

By:  Michele Renz

If you are a parent of a school-aged child in Western Pennsylvania, you are undoubtedly familiar with the seemingly endless amount of choices of teams, clubs, associations, and groups that are available for your child to join.  For example, take sports.  Not only are there school-related sports teams – there are regional, community, travel, elite, club, in-house, and other special team classifications I’m sure I’m missing and haven’t listed – for each sport – and it’s big business.  According to a 2016 article in the New York Times, there are approximately 14,000 youth sports organizations in the Unites States taking in annual revenue of about $9 billion.  Add to this the plethora of different non-sports related clubs, associations, and groups – band boosters, drama, dance, art, ski, history, mountain biking, chess, computer, choir – the billions in revenue being brought in is greater than some entire states!

Which begs the question:  who is keeping track of all those fees, dues, and expenses you are paying into organizations?  At the local and regional level, it’s likely a volunteer: a civic, volunteer-minded, honest parent of a kid in the organization that knows how to manage a checkbook and wants to manage the finances to benefit the overall well-being and purposes of the organization.  The majority of volunteer treasurers and boards are good people and have the best interest of the organization in mind.  These people – and the countless others that serve – run great organizations and make the experience worthwhile for all involved.

However, there is a definite dark side out there.  Take a moment and type “youth sports embezzlement” or “youth sports financial theft” into your search engine, and you will see what I mean: countless stories are documented and millions of dollars are being embezzled from youth organizations each year.  What’s even more scary?  For every case you hear about, there is one or possibly more, that haven’t been discovered yet or are not ever reported.  Reasons that cases aren’t reported include fear of bad publicity; protection of the reputation of the organization; social repercussions for the accuser, accused, and their children; upset of team dynamics; and legal and other professional costs associated with pursuing such an allegation.  Another main reason:  people are too busy to care or simply don’t want to spend the time it takes to pursue it.

Those of you reading this likely believe that this happens in other youth organizations, but it is certainly not happening in the organization where your child is involved.  After all, you know and perhaps are friends with the people in charge of the organization – they are good people.  This exact kind of thinking and rationalization has allowed the millions of dollars of frauds to occur in the first place.  According to the Association of Fraud Examiners 2016 Global Fraud Study (ACFE Study), 88.3% of fraudsters are first time offenders with no prior convictions and a majority had never been fired from a job for suspected fraud abuse.

When interviewed, most convicted fraudsters say that they did not go into their positions with the intent to defraud or steal from an organization.  Typically, there is a pressure upon them (e.g. financial problems, addiction, etc.) which causes them to rationalize (e.g. “I’ll just borrow the money and pay it back before anyone notices,” or “I do so much for this organization.  I deserve this.”).  When pressure and rationalization cross with the opportunity to steal – you have the perfect storm – the perfect fraud triangle and scenario for a fraud to occur.

How can fraud in youth sports and other extra-curricular organizations be prevented?  While every organization operates differently and processes need to be customized to the organization, following are two suggestions that are applicable to every organization: 

Recognize the Behavioral Red Flags Demonstrated by Fraud Perpetrators

According to the ACFE Study, the most common red flags identified by respondents as warning signs displayed by the perpetrator before a fraud was detected were as follows:

  • Living Beyond Means
  • Financial Difficulties
  • Unusually Close Association With a Vendor
  • “Wheeler-Dealer” Attitude
  • Control Issues; Unwillingness to Share Duties
  • Divorce/Family Problems
  • Irritability, Suspiciousness, or Defensiveness
  • Addiction Problems

A specific behavior that I have personally noticed and/or been made aware of in fraud and misappropriation investigations is the unwillingness to share bank statements and other financial documentation (receipts, etc.) with other organization leaders upon request.  Another indicator is that while the person is more than willing to share documentation, there “isn’t any” or “it’s missing”.  Good financial stewards will not only maintain good records, and even if they don’t, they will be eager to do whatever it takes to demonstrate their honesty and prove that they did not misappropriate funds. 

Another unusual behavior that I’ve come across is a volunteer staying involved with an organization after his or her child has left the organization and has moved on to other activities.  Yes, there are admirable good Samaritans out there, but I think we can all agree that this kind of “service after your kids leave” is rare as we are busy rushing and finding time to make it to our kids’ own events or serving where our own kids are involved. 

Reduce or Eliminate the Opportunity for a Fraud to Occur or Go Undetected

Earlier in this blog, I referred above to the fraud triangle:  it is where pressure, rationalization, and opportunity meet to allow a fraud to occur and potentially go undetected.  An organization ultimately doesn’t have control over one’s internal pressures and rationalizations.  However, the organization has significant control over eliminating the opportunity for fraud.  Sadly, as is evidenced by the millions of dollars stolen from our youth programs, many fall way short of eliminating opportunity; as a matter of fact, many actually unknowingly encourage it. 

The biggest way that your organization can significantly reduce – and potentially eliminate – the opportunity for fraud is to implement what we auditors collectively refer to as internal controls.  Internal controls are processes and methods put in place by an organization to ensure the integrity of financial and accounting information.  In other words, good internal controls is an executed system of checks and balances to ensure accuracy.

By far, the most important internal control in any organization – or business for that matter – is to ensure that there is segregation of duties throughout financial processes.  Segregation of duties means having more than one person be involved in a task.  The opposite of segregation of duties is allowing one person to control a process from beginning to end.  Let me stress it again:  SEGREGATION OF DUTIES IS THE MOST IMPORTANT INTERNAL CONTROL IN ANY ORGANIZATION!!! 

Yet, so often, as I’ve seen in person and as is the case in many of the examples that you can pull up in your search engine, organizations allow one person – typically a highly respected, trustworthy person with the title of president or treasurer – to control the organization’s bank account and cash processes.  They allow the same person to collect money, deposit money, write checks, receive and pay invoices, be the sole signatory on the bank account, and receive and balance the bank statements.  Then, somewhere in the course of life while that person has sole control over your organization’s finances, he or she experiences a personal financial pressure, rationalizes that he or she will borrow and pay it back, and you have no controls stopping that person from helping himself or herself to your funds.  Easy.  Just like that, a fraud has occurred.  And many times, because it was so easy and no one found out, he or she does it again.  And again.  Before you know it, your organization and its participants are out hundreds of dollars – often more. 

This type of fraud is so common and yet, it is so easy to prevent, or at least significantly minimize, with these practical tips:

  • All checks and payments made from the organization’s bank account by the treasurer must have supporting documentation such as a detailed invoice. All invoices should be approved by another person (e.g. president, vice-president, or person requiring the goods or services).
  • Registration fees and player/member payments should be tracked and totaled by someone other than the treasurer. The treasurer should be responsible for depositing the funds. 
  • Two people from different families should be involved in cash collection processes such as a gate or admission receipts. A written form should be provided and should be signed by both people involved verifying the total cash being submitted.  The cash should be placed along with the form in a sealed envelope.  The envelope should be opened, counted, and verified by the treasurer and another member of leadership who should sign-off that they verified the totals.
  • Always have two signors on an organization’s bank account. Both signors must have access to view the account activity, including check images, and statements, via online banking inquiry.  The treasurer should be responsible for writing the checks, making deposits, and recording the checkbook while the other is responsible for preparing bank reconciliations and verifying deposits, check payments, and cash withdrawals to supporting documentation.  If possible and practical, having a third person involved in performing the verifications to supporting documentation is even better.  At least two people with access to the bank account statements is a non-negotiable must.
  • The checkbook, bank statements, and reconciliations should be presented for review by the governing body (board of directors or equivalent) of the organization. All supporting documentation for any deposits or expenditures should be made available upon request of members of the governing body. 
  • A member of leadership not listed on the bank account should verify supporting documentation for all payments or reimbursements to the two signors on the organization’s bank account as well as registration fee payments for the signors’ children.
  • If you do not have volunteers willing to perform the documentation verifications or want the added assurance of the involvement of an independent third party in your verification processes, consider hiring a local CPA to assist you.
  • A best practice is to have organization by-laws or rules require periodic rotation of at least one signor on the bank account. If this is not a requirement, involvement of assistance of a local CPA is highly encouraged.

The key takeaways from the tips above are a good system of checks and balances (internal controls) and transparency.  By implementing even one of the tips above, you reduce the risk of a fraud happening to your organization.  Implementing multiple tips exponentially reduces fraud risk. 

If you are an honest volunteer who is donating your time to a worthwhile organization for the benefit of youth in your community, thank you, and I hope that you find these suggestions helpful to your organization and share it with your leadership and the leadership of other organizations.  If you are a volunteer reading this who is currently defrauding an organization you are involved with, please understand the ramifications to you personally after you are caught are less now than they will be if you continue doing what you are doing.

In conclusion, preventing fraud from happening in any organization is not rocket science – it’s common sense and good business.

If our firm can be of any assistance to your organization, contact us. 

UPDATE: New Pennsylvania State Tax Withholding Obligation on Certain Leases

Pennsylvania Act 43 of 2017 created a withholding obligation for certain payors of PA-source income and lessees of PA real estate to non-residents.  Beginning January 1, 2018, anyone that makes payments to non-resident individuals or disregarded entities with a non-resident member that is subject to 1099-MISC reporting is required to withhold PA tax from the payments if the payments total $5,000 or more annually.  If the payor or lessee fails to withhold and pay the required withholding, the Department of Revenue can collect the tax from the payor or lessee.  Just recently, the state announced that periods prior to July 1, 2018 will not be subject to assessment for a failure to withhold; however, when tax is withheld, it must be filed and remitted as required by law. 

Contact us if you have any questions related to the new PA 1099-MISC withholding rules or other tax matters.

Individual Tax Provisions Included Within the Recent Budget Deal

On February 9, 2018, Congress passed and the President signed into law, the “Bipartisan Budget Act of 2018.”  Included in the act are several tax provisions, including “extenders” for individuals, which affect the 2017 tax year.  These “extenders” are:

        1. Exclusion for discharge of indebtedness on a principal residence:  Normally, a discharge of indebtedness is considered taxable income to the borrower.  This provision, which is now extended through agreements entered into before January 1, 2018, permits a taxpayer to exclude the discharge that pertains to qualified principal residence indebtedness.

       2. Treatment of mortgage insurance premiums as deductible qualified residence interest: This provision permits mortgage insurance premiums to be treated as mortgage interest on a qualified personal residence.  The deduction for mortgage insurance premiums begins to phase out for taxpayers with adjusted gross incomes (AGIs) exceeding $100,000 ($50,000 in the case of a married individual filing a separate return).

       3. Deduction for qualified tuition and related expenses: An “above-the-line” deduction is available to taxpayers with qualified higher education expenses.  The deduction is capped at $4,000 for taxpayers who have an AGI less than $65,000 ($130,000 for married taxpayers filing jointly) or $2,000 for individuals who have AGIs not exceeding $80,000 ($160,000 for joint filers).

      4. Tax credit for nonbusiness energy property:  A tax credit is available, up to $500, for homeowner’s who make certain energy-efficient improvements to their homes.  The credit is based on 10% of the project cost and includes such improvements as new windows and doors, heating and cooling units, and insulation materials, provided that the improvement meets specific energy rating requirements.  The $500 limitation applies to the lifetime of the taxpayer.

If you have any questions on this law change, or others, please contact us today to schedule an appointment.