• Tariffs and global uncertainty are driving up construction hard costs and disrupting material sourcing and timelines. 

• Developers and contractors are responding by rethinking supplier relationships, stockpiling inputs, and tightening contract language. 

• Legal and accounting professionals play a key role in helping you manage financial risk, secure financing, and monitor vendor compliance. 

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In today’s construction market, tariffs change fast — and so do your costs, contracts, and supply chain risks. One week, your project inputs are tariffed at 25%; the next week, that rate drops to 10%. This type of volatility is no longer the exception, it’s the new norm.

As of mid-2025, tariff policy remains in flux. While electrical components, steel, and Canadian lumber remain hot-button items, the broader concern is uncertainty.

“Uncertainty causes a hold or freeze in decision making,” said Eric Paulsen, chief operating officer of commercial real estate firm Kidder Mathews. “With the fluctuation in pricing, contractors used to provide a quote that was good for months, now it’s only good for a week … if not days.”

So, what does this mean for your bottom line — and how can you adapt your contracts, purchasing, and financial planning to respond?

How Tariffs Are Hitting You on the Developer Side

Tariffs are directly affecting hard costs and disrupting the procurement process, especially when it comes to internationally sourced materials like steel and electrical equipment. According to Paulsen, delivery delays for items like electrical transformers and panels have become more severe. Even before recent escalations, delays were stretching out to 12 months or greater — meaning materials had to be ordered before final plans were approved just to stay on schedule.

Paulsen added that uncertainty is now adding “an extra layer of scrutiny” to every purchasing decision.

Practical Steps Developers Are Taking

To mitigate the risk of tariffs, some developers are taking proactive steps, such as:

• Buying in advance or keeping materials on hand: While this can be “brutal for smaller shops,” it’s a practical move to hedge against volatility.

• Seeking out new sourcing options: Paulsen noted that smaller countries like Cambodia are trying to modernize and enter the manufacturing game, though that’s still a longer-term shift.

• Preparing to shift suppliers: “Long-time relationships between contractor and supplier are now at risk,” he said. For some firms, the current environment is “a great time to usurp a previous relationship.”

Ultimately, Paulsen warned that “development at its core has to pencil or the development won’t happen.” Unless it’s a government or public-use project or a user-driven build-to-suit, many speculative projects are currently on hold.

Best-Case Versus Worst-Case Scenario

Moving forward, Paulsen describes the best-case scenario as “stability or at least a sense that the worst is over, so people can make some decisions.” The worst-case scenario? Basically, more of the same: “Flip flopping, start/stop, or anything that causes uncertainty.”

For developers to fully participate in the market, they need to have a sense of where things stand.

“We need the rules of the road,” Paulsen said. “With some final stability, people will figure out the new market measures and re-engage. Until then people who can wait, will.”

On the Legal Side: Modernizing Your Contracts

If you haven’t revisited your contracts in the last few years, now’s the time.

Derek Weisbender, a construction partner at Allen Matkins, a law firm with deep roots in real estate, noted that it’s typical for certain contracts to allow contractors to request more money when there’s an unanticipated change in law (such as a new tariff) that makes performance more expensive. The burden is on vendors to support their claims.

He said there is an “obligation on vendors [to] show baseline costs as of the contract date.” That serves as support to validate future price fluctuations. Without that transparency, disputes are more likely. But if the backup is built in, you’re better positioned to make your case — whether costs go up or down. But what’s newer, and not often considered, is a reciprocal clause that protects an owner or developer when the opposite occurs (such as when a tariff is rescinded).

“Sophisticated owners are using the baseline tariff cost to claw back savings when tariffs are avoided,” Weisbender noted. In other words, if tariff costs are ultimately avoided, the owner or developer can negotiate a partial refund or cost adjustment. Some contractors may disagree. But, as Weisbender explained, “it seems fair that if an owner should bear the burden of a tariff increase, they should likewise enjoy the savings of a tariff decrease.”

The Role of Your Accounting and Finance Team

Adapting to volatility isn’t just a legal or operational issue. It’s a financial one, too.

If you’re considering strategies like prepayment, early ordering, or warehousing materials, you may need short-term capital — and that requires careful planning and documentation. Accountants can help you:

• Model out cash flow scenarios to support big-ticket pre-buys

• Prepare the financial reporting needed for loan applications, especially if you’re approaching lenders outside your primary bank

• Support compliance monitoring for tariff-related contract provisions, validating vendor costs and identifying irregularities

While accountants can’t give legal advice, they can offer critical support when it comes to making your financial strategy align with your contract protections.

Your Next Move: Reassess Your Risk and Recheck Your Language

Tariff policy is beyond your control. But how you plan, purchase, and protect your interests isn’t.

If you’re a developer or general contractor:

• Talk to your lawyer about updating your contracts to include cost claw-back provisions 

• Evaluate whether you need to shift suppliers or purchase materials in advance 

• Engage your accounting team to model cash flow, validate vendor inputs, and support financing conversations 

If you’re relying on old contract templates or handshakes, you could be leaving money on the table, or absorbing unnecessary risks.

In today’s market, your success depends on staying agile, informed, and well-supported.

How MGO Can Help

Our Professional Services team works closely with developers and contractors to provide financial clarity in uncertain markets. From cash flow modeling and budgeting for material pre-purchasing to preparing financial reports for lenders. We help you make confident, informed decisions. We also assist with ongoing compliance support tied to contract terms and vendor costs.

Reach out to our team today to build a financial strategy that keeps your business moving forward.

The post How to Manage Your Construction Costs in a Tariff-Turbulent Year appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• AI agents deliver efficiency across the value chain — from contract review and tenant services to construction planning and payment management, agentic AI can streamline operations, reduce errors, and cut costs.
• Your firm should implement oversight, ethical safeguards, and security protocols to responsibly adopt autonomous systems.
• If you adopt early, you gain a competitive edge, as organizations that act now to pilot agentic AI use cases will position themselves ahead of competitors still relying on traditional processes.

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Real estate and construction companies are on the precipice of a dramatic shift. Artificial intelligence (AI), particularly agentic AI, will permanently change how the industry does business, streamlining functions from back-office administration to logistics, data-heavy tasks, and more.

Unlike traditional automation, intelligent agents are purpose-built and trained to fulfill specific roles, enabling them to make decisions independently and navigate complex processes with minimal human intervention. Organizations that successfully integrate these tools stand to benefit from faster decision making, improved project planning, and more competitive pricing.

For all its benefits, autonomous AI represents an intimidating advancement. These systems require robust support infrastructure and bring new risks and challenges. Organizations will need to strengthen their data governance processes, implement cybersecurity best practices, learn how to collaborate with autonomous systems, and account for novel risks like AI bias on an ongoing basis.

These complex dynamics call for thoughtful planning and targeted investments without delay. As first steps to integration, real estate and construction companies should proactively investigate how agentic AI can improve their operations and seek out potential use cases. Organizations that act quickly will unlock a powerful competitive differentiator, while those who wait risk being left behind.

Agentic AI Real Estate and Construction Use Cases

Companies are just beginning to understand the vast potential of AI agents. For real estate and construction leaders seeking an entry point, several use cases stand out as impactful and achievable options, each carrying the potential to increase efficiency and reduce operational overhead.

Real Estate Use Cases

Contracts and pricing: Property management firms are responsible for maintaining and understanding large troves of documentation. AI can quickly sift through huge amounts of data, easing the process of reviewing and drafting key documents. These tools will help verify that contractual clauses are written correctly and do not contain any oversights. They can also monitor regulatory activity and notify businesses in real time about any changes, new rules, and potential compliance issues. With appropriate oversight, they will even be able to make the necessary adjustments in some cases. 

During negotiations, firms could call upon their AI agents to screen tenant applications and leverage historical and current market data. Property managers could come to the table confident that their pricing decisions are defensible and backed by data, tailored to both meet their needs and satisfy applicants’ expectations.

Tenant management and customer service: Intelligent systems can offer around-the-clock support for maintenance or information requests. Previously, if a tenant experienced a non-emergency issue with an appliance during the night, they might need to wait until the following day to notify their management company and schedule repairs. Autonomous agents can respond immediately, no matter the time, and place a service request on the schedule for the following morning. Prompt responses will help reassure tenants they are being heard, reducing instances of friction and building loyalty. Should an emergency arise, the system can immediately notify the management company and update the maintenance schedule accordingly.

Back-office support: AI will transform the back office, processing and validating payments automatically and sending reminders to tenants or other customers who miss a deadline. With access to this financial information, intelligent tools can also help collect and organize data for financial reporting obligations and, if given the appropriate parameters, may even supplement actions such as filing taxes, cutting down on compliance costs while increasing efficiency.

Portfolio Management: Agentic AI can act as a continuous decision-making partner in investment management for both real estate and construction firms. It can autonomously monitor market dynamics, forecast project viability, and reallocate capital across portfolios in real time. It can also evaluate factors like material cost fluctuations, urban development plans, and rental yield trends to optimize asset performance without constant human oversight.

Construction Use Cases

Coordination and planning: AI agents can engage in forecasting, simulation, and planning for construction projects. They can also oversee communications with and between parties like inspectors, contractors, and subcontractors. Acting as project managers, these systems will monitor and log progress when a job is running smoothly, and step in to help course correct when necessary, independently adjusting schedules or budget forecasts based on changing circumstances. If, for example, malfunctioning machinery causes a work stoppage, an AI agent can flag the breakdown and incorporate the time needed for repairs into an updated project roadmap. With an autonomous agent managing workflows, organizations may be better insulated against human scheduling errors and resultant cost overruns.

Payment Management: Agentic AI can help construction companies manage payment applications, ensuring contractors and subcontractors are paid on time. It can also log completed work for recordkeeping and reporting purposes, keeping information standardized and accessible and reducing the chances of documentation getting lost or misclassified.

Permits and compliance: Construction projects require proper permitting and regular inspections to verify that job-site conditions are safe and compliant. Mistakes or misstatements in permitting documentation can be expensive and may increase overall compliance costs or open organizations up to enforcement actions. Intelligent agents can reduce these risks by gathering information for use in permit applications, interpreting and filling out the necessary forms, keeping track of permits filed, and updating the company in real time if permitting needs change. This function can be particularly impactful with respect to local jurisdictions, where regulations can often vary widely and can be difficult to track manually.

Agentic AI can also monitor labor union agreements and related workforce regulations, helping firms proactively align with union requirements, avoid disputes, and maintain smooth operations across all jurisdictions.

Humans in the Loop

Real estate and construction companies can pursue these applications today. As agentic AI advances, companies can integrate these systems even more deeply into operations. Think of smart buildings and autonomous construction equipment, all managed and guided by intelligent tools.

Even as AI functionality continues to evolve, one factor remains constant: Humans are essential to support both initial integration and provide ongoing oversight of new tools and technologies. Leaders must remain aware of the challenges AI can bring and treat adoption not as a one-off instance but as part of a long-term strategy.

Agentic AI Risks and Challenges

In the past, real estate and construction companies have not been as tech-forward as other industries. To support agentic AI, they will have to make up ground, particularly in areas like governance, cybersecurity, and AI literacy.

AI Bias

The risks posed by unseen biases grow substantially with AI agents. Data used to train AI is subject to the biases of the humans who provide it, sometimes causing a program to “inherit” the discriminatory biases of its creators. Inherited biases could lead to unfair or inaccurate outputs that damage the businesses that rely on them. This risk is especially prevalent for real estate firms, which may employ intelligent tools for tasks like pricing, contract negotiations, and application screening. For instance, if those systems have inherited a bias that causes them to treat applicants differently based on a protected characteristic, the firm could violate fair housing regulations, leading to significant financial, legal, and reputational risks.

Preventing AI bias demands continuous and active testing, covering both the underlying dataset and the AI’s outputs. Companies should request bias test results from any potential AI vendor, and check whether a vendor has obtained third-party certifications such as SOC 2 as an additional layer of confidence. A lack of bias testing is a red flag. The risks of harm to a business and its customers are too great to ignore. Organizations inexperienced in making these evaluations may consider enlisting a knowledgeable third party with the resources and experience to help check for unseen biases.

Governance

Strong AI governance, covering both technical concerns and operational risks, is critical for successful AI implementation. Because autonomous agents will operate cross-functionally, building a governance framework must be a cross-functional process, incorporating feedback from each area of the business and covering critical domains like risk management, data ethics, data privacy, data lifecycle management, and organizational structure.

For real estate and construction companies, the first step is assigning decision rights. Where will an AI agent be empowered to make decisions, what data will it leverage to do so, and how will human oversight be conducted? Answering these questions means defining specific use cases, such as the options above, and will allow firms to clearly delineate the AI agent’s role and assessing any risks tied to each use case. Organizations will also need a process to document decisions and deliver feedback. For domains that introduce compliance risks, such as construction site safety or tenant application screening, governance teams should implement several layers of checks to ensure that all decisions are responsible and ethical.

Governance is not just as a means for organizations to protect themselves, but also a way to unlock the full potential of their AI agents. A clear scope and well-defined decision parameters will enable safer usage, but they also create higher quality and more reliable outputs.

Cybersecurity

Interconnected systems can increase security vulnerabilities, necessitating new protections against novel forms of data theft. Real estate and construction companies will need clear visibility into AI input data, how that data is processed, who has access to it, and how it is shared to support data loss prevention (DLP) and stop sensitive data from leaking.

For organizations that employ outward-facing AI, such as agents that handle tenant inquiries, these needs are even sharper. A user interacting with an agent could ask a question that causes the system to reveal sensitive business information. Known as “prompt injection,” this tactic is increasingly used by bad actors to steal information without breaking into a company’s systems.

In some cases, strengthening cybersecurity also involves physical security. On a construction site, for instance, supervisors will likely use mobile devices or machinery that communicate with AI agents. Firms must be sure they have adequate endpoint security and a robust mobile device management strategy to track usage. If an unauthorized individual gains access, whether on purpose or by mistake, they could obtain sensitive information. These devices should only be accessed by trusted, predesignated users.

How MGO Can Help

Adopting agentic AI is not just about technology; it’s about building a sustainable framework that blends innovation with responsibility. At MGO, we help real estate and construction firms evaluate practical AI use cases, strengthen data governance, mitigate risk, and design tailored strategies for integration. Whether you are exploring tenant management automation, portfolio optimization, or construction compliance tools, our team provides you with the insights and guidance needed to move forward with confidence. By acting today, your organization can unlock efficiency, resilience, and a powerful competitive advantage in tomorrow’s market. Contact us to learn more.

Written by Tyler Cahill, Kirstie Tiernan and Kristi Gibson. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com.

The post Agentic AI Use Cases for Today’s Real Estate and Construction Firms appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Using AI cybersecurity tools can help you detect threats faster, reduce attacker dwell time, and improve your organization’s overall risk posture.

• Generative AI supports cybersecurity compliance by accelerating breach analysis, reporting, and regulatory disclosure readiness.

• Automating cybersecurity tasks with AI helps your business optimize resources, boost efficiency, and improve security program ROI.

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Cyber threats are evolving fast — and your organization can’t afford to fall behind. Whether you’re in healthcare, manufacturing, entertainment, or another dynamic industry, the need to protect sensitive data and maintain trust with stakeholders is critical.

With attacks growing in volume and complexity, artificial intelligence (AI) offers powerful support to help you detect threats earlier, respond faster, and stay ahead of changing compliance demands.

Why AI Is a Game-Changer in Cybersecurity

Your business is likely facing more alerts and threats than your team can manually manage. Microsoft reports that companies face over 600 million cyberattacks daily — far beyond human capacity to monitor alone.

AI tools can help by automating key aspects of your cybersecurity strategy, including:

• Real-time threat detection: With “zero-day attack detection”, machine learning identifies anomalies outside of known attack signatures to flag new threats instantly.

• Automated incident response: From triaging alerts to launching containment measures without waiting on human intervention.

• Security benchmarking: Measuring your defenses against industry standards to highlight areas for improvement.

• Privacy compliance support: Tracking data handling and reporting to meet regulatory requirements with less manual oversight.

• Vulnerability prioritization and patch management: AI can rank identified weaknesses by severity and automatically push policies to keep systems up to date.

AI doesn’t replace your team — it amplifies their ability to act with speed, precision, and foresight.

Practical AI Use Cases to Consider

Here are some ways AI is currently being used in cybersecurity and where it’s headed next:

1. Summarize Incidents and Recommend Actions

Generative AI can instantly analyze a security event and draft response recommendations. This saves time, supports disclosure obligations, and helps your team update internal policies based on real data.

2. Prioritize Security Alerts More Efficiently

AI triage tools analyze signals from across your environment to highlight which threats require urgent human attention. This allows your staff to focus where it matters most — reducing risk and alert fatigue.

3. Automate Compliance and Reporting

From HIPAA to SEC rules to state-level privacy laws, the regulatory landscape is more complex than ever. AI can help your organization map internal controls to frameworks, generate compliance reports, and summarize what needs to be disclosed — quickly and accurately.

4. Monitor Behavior and Detect Threats

AI can track user behavior, spot anomalies, and escalate suspicious actions (like phishing attempts or unauthorized access). These tools reduce attacker dwell time and flag concerns in seconds — not weeks or months.

5. The Next Frontier: Autonomous Security

The future of AI in cybersecurity includes agentic systems — tools capable of acting independently when breaches occur. For instance, if a user clicks a phishing link, AI could automatically isolate the device or suspend access.

However, this level of automation must be used carefully. Human oversight remains essential to prevent overreactions — such as wiping a laptop unnecessarily. In short, AI doesn’t replace your human cybersecurity team but augments it — automating repetitive tasks, spotting hidden threats, and enabling faster, smarter responses. As the technology matures, your governance structures must evolve alongside it.

Building a Roadmap and Proving ROI

To unlock the benefits of AI, your business needs a strong data and governance foundation. Move from defense to strategy by first assessing whether your current systems can support AI — identifying gaps in data structure, quality, and access.

Next, define clear goals and ROI metrics. For example:

• How much time does AI save in daily operations?

• How quickly are threats identified post-AI deployment?

• What are the cost savings from prevented incidents?

Begin with a pilot program using an off-the-shelf AI product. If it shows value, scale into customized prompts or embedded tooling that fits your specific business systems.

Prompt Engineering to Empower Your Team

Your teams can get better results from AI by using structured prompts. A well-designed prompt ensures your AI tools deliver clear, useful, business-ready outputs.

Example prompt:

“Summarize the Microsoft 365 event with ID ‘1234’ to brief executive leadership. Include the event description, threat level, correlated alerts, and mitigation steps — in plain language suitable for a 10-minute presentation.”

This approach supports internal decision-making, board reporting, and team communication — all essential for managing cyber risks effectively.

Don’t Wait: Make AI Part of Your Cybersecurity Strategy

AI is no longer a “nice to have”; it’s a core component of resilient, responsive cybersecurity programs. Organizations that act now and implement AI strategically will be better equipped to manage both today’s threats and tomorrow’s compliance demands.

How MGO Can Help

At MGO, we help forward-thinking companies across industries — including healthcare, life sciences, manufacturing, cannabis, technology, and entertainment — harness the power of AI to strengthen their cybersecurity posture while maintaining control, compliance, and clarity.

Our team combines deep technical knowledge with industry-specific insight to help you evaluate your current systems, identify where AI can deliver real value, and implement solutions that support long-term resilience across the board.

From building data governance frameworks to designing effective prompt strategies, we guide you step-by-step to make sure your cybersecurity investments are strategic, scalable, and aligned with your business goals — all with tailored advisory solutions in cybersecurity management, outsourced accounting, and technical compliance.

Explore how MGO can help you build a smarter, stronger cybersecurity program. Contact us today to learn more.

The post How AI Can Strengthen Your Company’s Cybersecurity appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Manufacturers are reassessing supply chains and tax strategies to adapt to shifting tariffs and tighter margins.

• Retailers and overseas suppliers are pushing back on price increases, placing more pressure on distributors.

• Rapid scenario planning and operational agility are essential as companies navigate a fast-changing trade and demand environment.

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After a brief period of optimism, the U.S. manufacturing sector has slipped back into contraction. The Institute for Supply Management (ISM) reported a decline in activity for July 2025, raising fresh concerns about the resilience of an industry already strained by global instability, cost volatility, and labor shortages.

According to ISM reporting, July continues a multi-month downturn in U.S. manufacturing. Rising tariffs on semiconductors, clean tech components, and electronics are contributing to declining optimism and margin pressure.

In response, manufacturers are accelerating reshoring strategies, rethinking sourcing models, and reallocating capital toward U.S.-based production. But these operational shifts carry downstream effects — including supply chain disruption, pricing tensions with retailers, and growing tax complexity.

Tariff Impacts Driving Operational and Financial Restructuring

The latest round of tariff policy changes — particularly those targeting semiconductors, clean tech components, and consumer electronics — has added urgency to supply chain reassessment across the manufacturing and distribution sector. For many mid-sized companies, this is no longer a matter of long-term planning, but of near-term survival.

In addition to long-term shifts, companies are contending with immediate pressures that demand more agile, real-time responses. With the policy environment shifting rapidly, firms need to be able to redirect sourcing, adjust pricing, and adapt operations quickly in response to new trade terms or economic signals. Retailers are resisting price increases amid soft consumer demand, while overseas suppliers show little willingness to absorb added tariff costs. This dual resistance leaves U.S. manufacturers and distributors caught in the middle — facing rising input costs and shrinking pricing power.

This pricing stalemate has forced many companies to absorb margin pressure themselves, accelerating the need for real-time scenario planning and rapid cost modeling. Facing inflexible suppliers and impatient buyers, some firms are exploring new supplier relationships altogether — often under compressed timelines and uncertain economic conditions.

These dual pressures are driving a shift toward faster, more flexible operational planning. Traditional multi-quarter strategy cycles have given way to real-time adjustments, where pricing models, sourcing plans, and capital deployment decisions are made in weeks rather than quarters. Today, manufacturers are engaging in rapid scenario modeling, adjusting pricing structures on the fly, and mapping out contingency plans for everything from inventory shifts to capital deployment.

These changes are not occurring in silos. Every sourcing decision affects tax exposure, every pricing adjustment impacts working capital, and every supplier switch creates new compliance considerations. That’s why companies are increasingly approaching supply chain restructuring as a cross-functional exercise — integrating finance, tax, and operations into a single planning framework built for speed, resilience, and data-informed execution.

Technology Investment Moves to the Forefront

Despite economic headwinds, many manufacturers are prioritizing tech adoption. Automation, AI, and advanced data tools are being used to improve throughput, reduce waste, and alleviate workforce gaps.

However, technology investments only deliver value when aligned with operational and financial systems. That’s why firms are increasingly focused on integrating data across functions, streamlining reporting, and tracking ROI in real-time. The shift isn’t just about adopting new tools — it’s about embedding them into core workflows and decision-making processes.

Advisory support in this space is helping companies make smarter, phased tech decisions — prioritizing high-impact areas first, then expanding as capacity grows. By focusing on tangible results and incremental wins, companies can build momentum while managing risk and preserving capital.

Operational Risk and Controls Under Strain

As manufacturers digitize operations and integrate more advanced technologies, traditional internal controls are being tested in new ways. Increased reliance on connected systems and data flows elevates operational risk — not just in terms of security, but also in accuracy, oversight, and regulatory compliance.

Legacy systems often require updated controls to support modern processes and maintain reporting integrity and process reliability, particularly as companies scale or reconfigure supply chains. In some cases, control gaps can expose the business to financial reporting risks as well as operational disruptions that affect fulfillment, cash flow, or customer trust.

Many organizations are reevaluating risk frameworks, updating governance structures, and taking a more proactive approach to finding and addressing control deficiencies that legacy operating models may have masked. This includes reassessing control ownership across departments and embedding real-time monitoring into critical workflows.

A Time for Reinvention

Strategic roadmaps are being replaced by agile frameworks that enable cross-functional teams to pivot quickly. Multi-year plans have given way to agile playbooks that allow operations and finance teams to redirect quickly. Tariff pressures, labor challenges, and rising technology demands are converging in an environment that is increasingly unpredictable and fast-moving.

The ability to scenario-plan and reallocate resources in near-real time is becoming a competitive advantage — particularly as pricing power erodes and supplier relationships grow more complex. The ability to act quickly — operationally and financially — is becoming a key differentiator, particularly as pricing power weakens and supplier negotiations become more complex.

For mid-sized firms, this creates both pressure and opportunity. Those that realign operations, improve visibility, and strengthen internal decision-making processes will be better equipped to lead through change. Outside advisors are playing a critical role — supporting companies with financial modeling, tax strategy, and operational planning that’s built for speed and uncertainty.

In this climate, long-term success will favor firms that can move with both speed and precision.

Supporting the Industry Through Change

MGO works with manufacturing and distribution companies navigating disruption and building for what’s next. Our team delivers practical, industry-informed guidance to help middle-market companies make confident, forward-looking decisions in times of change.

As pricing pressures and policy shifts reshape the landscape, we can help your organization respond quickly and strategically — adapting financial strategies, modeling supply chain scenarios, and reinforcing risk and control frameworks. Reach out to our team today to learn how MGO can help you move forward with clarity, confidence, and resilience.

The post Your Manufacturing Strategy in a Tariff-Driven Market appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• DOJ has narrowed FCPA focus to cartel-linked bribery, shell firms, and TCOs tied to national security threats. 

• Corporate FCPA enforcement shifted to target individuals, reducing business disruption. 

• DOJ guidance now highlights the risk of material support to FTOs and urges stronger compliance controls. 

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On June 9, 2025, the United States Department of Justice’s (DOJ) Deputy Attorney General, Todd Blanche, released new guidance regarding FCPA investigations and enforcement by the department’s Criminal Division. 

The guidance reflects a consistent “America-First” approach, continuing the Trump administration’s pause on FCPA enforcement by introducing additional guidelines designed to “limit undue burdens on American companies operating abroad” and focusing enforcement on conduct that undermines U.S. national interests. In addition, the memo provides more detailed information on how enforcement efforts will be prioritized moving forward. 

Key Takeaways from the Guidelines: 

1. Continued Focus on Cartels and Transnational Criminal Organizations (TCOs): 

The DOJ will maintain its emphasis on the “total elimination” of cartels and TCOs. In addition to investigating bribery that facilitates these organizations, the DOJ will also prioritize “dismantling the financial mechanisms and shell companies used by criminal networks.” This raises the expectations for transaction monitoring by financial institutions and Money Service Businesses (MSBs). Specifically, the memo instructs DOJ prosecutors to determine whether the alleged conduct in cases they pursue: 

• Is associated with the criminal operations of a cartel or TCO; 

• Utilizes shell companies or money launderers known to support such organizations; or 

• Is linked to foreign officials or employees of state-owned entities who have received bribes from cartels or TCOs. 

2. Safeguarding Fair Opportunities for U.S. Corporations: 

The DOJ aims to protect U.S. companies from corrupt foreign competitors by identifying cases where alleged misconduct: 

• Deprived specific and identifiable entities of fair access to compete; or 

• Resulted in economic injury to American companies or individuals. 

3. Advancing U.S. National Security: 

There will be a particular focus on bribery of corrupt foreign officials that may threaten key minerals, deep-water ports, critical infrastructure assets, and the defense industry as a whole. 

4. Prioritizing Serious Misconduct: 

The DOJ will prioritize “serious misconduct” and will not penalize Americans for routine or facilitation payments in jurisdictions where such payments are permitted. 

Furthermore, the prosecution of FCPA cases will now focus on individuals rather than corporate entities, making the process less disruptive for companies. All currently active FCPA cases are centered on individuals responsible for the violations. Additionally, each new case must be escalated to senior DOJ officials for approval and consideration. The DOJ aims to ensure that FCPA enforcement is both expeditious and minimally disruptive to U.S. companies. 

Lastly, the new guidance makes notable reference to the Foreign Extortion Prevention Act (FEPA), indicating that prosecutors will consider whether U.S. companies have been harmed by foreign officials demanding bribes to secure contracts. 

What Does This Mean for Your Company? 

Given the current administration’s focus on Foreign Terrorist Organizations (FTOs) and Transnational Criminal Organizations (TCOs), companies now face increased legal risk of inadvertently providing “material support” to these groups. The definition of material support is broad, encompassing “any property, tangible or intangible, or service,” including currency or monetary instruments, financial services, lodging, training, expert advice or assistance, communications equipment, facilities, personnel, or transportation. Importantly, companies do not need to be directly complicit in making payments to such organizations; liability can arise simply from having knowledge that payments are being made to entities designated as FTOs. This places additional strain on existing compliance programs and controls, requiring companies to ensure they can appropriately capture this knowledge and prevent such transactions from occurring. 

The guidance confirms that, beyond the FCPA pause of February 2025, enforcement will not disappear but will become more targeted in support of U.S. companies and national interests. With a focus on national resources, security, and TCOs, certain industries will be more heavily impacted and should consider the following actions: 

Actions to Consider 

Reassess Your Company’s Risk Profile: 

• Identify whether your organization operates in regions known for cartel or TCO activity, and reassess your risk exposure accordingly. 

Conduct a Risk Assessment: 

• Evaluate risks based on your company’s geographic footprint and operational activities. 

Review International Procurement and Bidding Processes: 

• Examine your escalation procedures when red flags arise, especially if requests for intermediaries or consultants are made in high-risk territories. 

Engage with Security Teams: 

• Collaborate with your company’s security teams, who are often most knowledgeable about physical security in your areas of operation and transport corridors. Including them in the risk assessment process is essential for employee safety and for determining when heightened security measures are necessary. 

Evaluate Treasury and Payment Processing Controls: 

• Assess controls related to payments that could inadvertently involve unknown TCOs or cartels. 

Strengthen Third-Party Onboarding and KYC Processes: 

• Ensure your onboarding process includes robust Know Your Customer (KYC) procedures. Cartels and TCOs often operate through seemingly legitimate businesses and may require you to use their services if you operate in their territories. Understanding beneficial ownership is critical. 

Test and Update Whistleblower Mechanisms: 

• Ensure your whistleblower system addresses both safety and compliance concerns associated with operating in cartel or TCO territories. Update training for employees in high-risk areas and review internal escalation protocols to ensure prompt notification and response. 

Written by Didier Lavion. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com 

How MGO Helps You Stay Compliant in a Changing Global Enforcement Climate 

As FCPA enforcement pivots toward national security and individual liability, MGO’s team can help your company reassess its compliance risk, especially in regions with cartel or TCO activity. We support cross-functional teams with actionable risk assessments, KYC enhancements, and controls that align with DOJ expectations. Whether updating your whistleblower protocols or safeguarding procurement in high-risk territories, MGO assists your legal and finance teams to strengthen your compliance infrastructure without disrupting core operations. Contact us to learn more.  

The post New Guidelines on FCPA Investigations by the DOJ: What Companies Need to Know  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Proactive compliance risk assessments help state and local governments avoid funding clawbacks, penalties, and reputational damage.

• Strong internal controls, continuous monitoring, and staff training are essential for preventing improper payments and managing regulatory complexity.

• Integrating compliance into broader risk management frameworks builds financial resilience and reinforces public trust.

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Part III: Ensuring Compliance and Financial Integrity – Preventing Improper Payments and Managing Regulatory Risk

This is the final installment in our series, Navigating Fiscal Uncertainty. Having explored budgetary and revenue risks, we now turn to compliance — a cornerstone of public sector accountability.

—

Introduction

In an environment of heightened fiscal scrutiny and increasing regulatory complexity, compliance is not just a legal requirement – it is a cornerstone of public trust and financial integrity. For state and local governments, the prevention of improper payments and adherence to regulatory mandates are essential for maintaining both fiscal discipline and the public’s confidence. In Part III of our series, we explore how to conduct compliance risk assessments, prevent improper payments, and establish robust internal controls to manage regulatory risk.

Understanding Compliance Risk

Compliance risk encompasses the challenges associated with making sure all financial operations meet statutory, regulatory, and internal standards. For state and local governments, noncompliance can result in:

• Funding Clawbacks: The return of funds due to noncompliance.
• Penalties and Legal Challenges: Potential fines, litigation, or sanctions under laws such as the False Claims Act.
• Reputational Damage: Eroding the public’s trust in the management of government funds.

Example:

A local government might face a situation where insufficient documentation for vendor payments triggers an audit, resulting in the recovery of funds and significant negative media coverage. Such incidents underscore the importance of rigorous compliance measures.

Approaching a Compliance Risk Assessment

1. Inventory Regulatory Requirements

Mapping the Regulatory Landscape: Begin by identifying all applicable regulations – from federal requirements (such as 2 CFR Part 200 and OMB circulars) to state-specific mandates and internal policies.

Items to Consider:

• What specific federal, state, or local regulations govern your operations?
• Are there any recent regulatory changes that impact your current processes?
• How are these requirements documented and communicated across the organization?

Develop a Compliance Matrix: Create a detailed compliance matrix that links each regulatory requirement to specific internal controls and reporting deadlines. This matrix acts as a roadmap to make sure no requirement is overlooked.

Example:

A county government may develop a matrix that clearly outlines deadlines for submitting grant expenditure reports, documenting employee time for federally funded projects, and procedures for vendor verification. This matrix is reviewed regularly to make sure it reflects current regulations.

2. Evaluate Internal Policies and Controls

Review and Gap Analysis: Conduct a thorough review of existing internal policies, procedures, and controls. Compare these against the compliance matrix to identify any gaps or areas that need improvement.

Items to Consider:

• Are current policies up to date with the latest regulatory requirements?
• What internal controls are in place to prevent improper payments?
• How is documentation managed, and are records readily accessible in the event of an audit?

Documentation Practices: Establish rigorous documentation standards for all financial transactions, approvals, and compliance-related communications. Effective documentation is the first line of defense in audits and regulatory reviews.

Example:

A state department might notice through internal audits that certain expense claims are not supported by adequate documentation. By revising internal guidelines and conducting training sessions, the department improves its record-keeping practices, thereby reducing the risk of noncompliance.

3. Implement Continuous Monitoring and Training

Internal Audits and Real-Time Monitoring: Schedule regular internal audits focusing on high-risk areas like payroll, vendor payments, and subrecipient oversight. In parallel, use compliance management software to monitor key indicators in real time.

Items to Consider:

• What frequency is appropriate for internal audits of high-risk areas?
• Which automated tools can provide early warnings of compliance issues?
• How are audit findings communicated and remedied?

Employee Training and Culture: Invest in ongoing training programs for finance and administrative staff to make sure everyone understands regulatory requirements and proper procedures. Cultivating a culture of compliance helps prevent errors and fraud before they occur.

Example:

A municipal finance department might institute quarterly compliance training sessions and utilize an online learning platform to keep staff updated on new regulatory changes. This proactive approach not only minimizes errors but also reinforces the importance of ethical financial management.

4. Preventing Improper Payments

Segregation of Duties and Pre-Payment Reviews: Implement robust internal controls that separate the responsibilities for authorizing, processing, and reconciling payments. Pre-payment reviews are crucial to make sure each disbursement is supported by the necessary documentation.

Items to Consider:

• Are there clear, defined roles in the payment process to prevent conflicts of interest?
• What checks are in place to verify that payments align with approved budgets and vendor contracts?
• How are duplicate or erroneous payments detected and prevented?

Automated Detection Tools: Leverage technology like AI-driven analytics and duplicate payment detection systems to flag anomalies. These tools can analyze large volumes of transactions to identify irregular patterns that might indicate improper payments.

Example:

A local government might adopt a financial software system that automatically compares vendor invoices with contract terms. When discrepancies are detected – like a duplicate invoice or an invoice that exceeds the agreed-upon amount, the system alerts the finance team for further review.

Key Considerations and Concerns

• Evolving Regulations: The regulatory environment is continually changing. CFOs must stay informed about legislative updates and adjust internal controls accordingly.
• Subrecipient and Vendor Oversight: For organizations that distribute funds to subrecipients or rely on multiple vendors, making sure all partners comply with guidelines is essential. Lapses in oversight can have cascading effects on overall compliance.
• Integration with Overall Risk Management: Compliance should be integrated with broader risk management processes. This established that financial, operational, and regulatory risks are not viewed in isolation but are addressed holistically.

Strategic Recommendations for Compliance

• Build a Comprehensive Compliance Framework: Integrate compliance risk assessments into your overall risk management strategy. Use a combination of internal audits, automated monitoring tools, and periodic external reviews to establish ongoing compliance.
• Regularly Update Training Programs: Keep all employees informed about the latest regulatory changes and internal policy updates. Regular training and clear communication channels help reinforce a culture of accountability.
• Engage External Expertise: Consider partnering with third-party auditors or consultants to provide an objective assessment of your compliance framework. This external perspective can highlight blind spots and offer recommendations for improvement.
• Establish Clear Reporting Channels: Implement secure, anonymous channels for staff to report potential compliance issues or irregularities. An effective whistleblower program not only detects problems early but also reinforces organizational commitment to integrity.

Establishing compliance and preventing improper payments is a critical component of financial management for state and local governments. Through comprehensive compliance risk assessments, robust internal controls, continuous monitoring, and ongoing staff training, CFOs and directors of finance can safeguard public funds and maintain the trust of their communities. By proactively addressing compliance challenges, organizations can minimize legal risks, avoid funding clawbacks, and build a resilient financial infrastructure capable of withstanding future uncertainties.

Series Conclusion: A Proactive Roadmap to Fiscal Resilience

This three-part series has explored the essential elements of managing fiscal uncertainty in state and local government finance. We began with budgetary risk management – emphasizing realistic forecasting, monitoring, and contingency planning. We then examined revenue risk assessments – focusing on diversification, accurate forecasting, and cash flow strategies. Finally, we addressed the critical area of compliance – outlining how to prevent improper payments and manage regulatory risks effectively.

For CFOs and directors of finance, the challenges are significant, but so too are the opportunities. By integrating these risk assessments into strategic planning, leveraging technology, and fostering a culture of transparency and accountability, financial leaders can transform uncertainty into a catalyst for innovation and long-term stability. In doing so, they not only protect public funds but also reinforce the trust that the community places in its government institutions.

As you work to build a resilient financial framework, consider the insights and strategies outlined in this series as a roadmap to navigating today’s complex fiscal environment. Whether you are refining your budgetary forecasts, diversifying revenue streams, or enhancing compliance protocols, proactive risk management will empower your organization to thrive in even the most uncertain times.

How MGO Can Help

At MGO, we understand the unique compliance challenges facing state and local governments. Our experienced team works with public sector leaders to conduct detailed compliance risk assessments, strengthen internal control environments, and implement real-time monitoring systems that reduce your risk of improper payments. We also keep your teams informed and aligned with the latest regulatory changes.

Whether you’re building a compliance matrix, managing subrecipient oversight, or integrating compliance into your broader risk strategy, MGO delivers the experience and the tools to help you stay compliant, protect public funds, and uphold the trust of your community. Contact us to learn how we can support you in creating a stronger, more resilient financial future.

Written by Lee Klumpp. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com

The post Navigating Fiscal Uncertainty: Risk Management Strategies for State and Local Governments  — Part Three appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Your board should boost tech literacy and structure to oversee innovation, risk, and digital transformation effectively. 

• Staying current on AI, cybersecurity, and data privacy laws is essential for strong technology governance. 

• If you want strong, effective tech oversight, it’ll require cultural alignment, workforce readiness, and smart investment strategies.  

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Technology is no longer just an operational tool; it is a core driver of strategy, risk, and opportunity. For boards, the imperative to innovate is matched only by the responsibility to govern technology effectively. As organizations harness emerging technologies, the boardroom must be equipped to navigate complex issues ranging from regulatory compliance and risk management to cultural alignment and investment prioritization.  

Here we explore the top five boardroom conversations shaping technology governance for directors seeking to foster innovation while safeguarding organizational integrity and value. 

1. Assessing the board’s technological literacy and access to expertise  

• Determine whether the board, as a whole, has the appropriate knowledge and experience with technological innovation and implementation to provide strategic oversight.  

• Assess the board’s familiarity with the company’s technology debt when considering opportunities to implement emerging technologies.  

• Consider whether the circumstances of the company indicate the need to appoint a member with specific and relevant technology expertise. 

• Discuss whether the current board structure supports the strategic technology goals, objectives, and identified risks.   

• Weigh potential decisions for a dedicated technology committee, assigning technology to a specific existing committee, or keeping responsibility with the full board.   

2. Remaining apprised on a shifting regulatory landscape 

• Given the fast-evolving nature of data privacy, cybersecurity, and AI regulations, consider the board’s ability to confirm compliance with all laws and regulations.  

• Request continuing education and updated thought leadership from counsel and other advisors, subscriptions to emerging legislative trackers, etc.  

3. Engagement with management to understand risk management effectiveness  

• Consider whether management has adopted a viable framework that provides accountability and instills trust in its use and deployment of AI. 

• Assess whether the underlying data hygiene of the organization – including data integrity, access and privacy rights protections, effective internal controls, and system security – will enable technology to provide usable and ethical outputs. 

• Evaluate management’s use case identification in prioritizing the opportunity/problem being addressed versus the risk exposure to the organization. 

• Assess how human supervision and continuous monitoring are built into the process to identify and mitigate issues promptly. 

4. Cultural alignment and workforce preparation 

• As technology is being integrated and implemented, consider the appropriateness of training and upskilling the workforce to use and monitor new tools, identify and remedy associated risks, and comply with internal policies, procedures, and external rules and regulations.  

• Determine the existence and robustness of cross-disciplinary change management to foster a cultural of innovation acceptance and empowerment.  

• Discuss management strategies in place to address cultural and operational challenges to widespread adoption and use.  

• Assess the quality and effectiveness of communication throughout the organization to drive employee understanding of the use cases being deployed, changes to workflows, and how their roles may continue to evolve. 

5. Prioritizing technology investment 

• Consider the process applied by management for evaluating use cases against the mission, values, and agreed upon strategy of the organization. 

• Determine whether management’s technology strategy focuses not only on the investment in specific tools and their implementation but includes adequate investments in security and risk management.  

• When planning to deploy AI technology, consider whether critical input is being provided by others responsible for related risks such as cybersecurity teams, general counsel, finance, human resources, and operations.   

Stay Engaged 

Directors are encouraged to stay educated, informed, and in constant contact with management when integrating and utilizing new and complex technologies. The BDO Center for Corporate Governance endeavors to support directors in engaging in effective governance by providing insights, learning, and networking opportunities in collaboration with BDO subject matter specialists, advisors, and peer networks designed specifically for boards of directors. 

Written by Amy Rojik, Rachel Moran and Lee Sentnor. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com 

How MGO Supports Boards in Technology Oversight 

As technology becomes central to strategy and risk, MGO helps boards elevate their governance capabilities. From assessing board tech literacy to advising on AI risk frameworks and regulatory compliance, MGO offers tailored insights that empower directors to make informed decisions. Our team supports board and committee structures, provides continuing education on emerging tech, and helps align technology investments with organizational values. With deep experience in cybersecurity, data governance, and digital transformation, we work with you to navigate the complexities of modern technology oversight as it continues to evolve. Contact us to learn more.  

The post Top 5 Boardroom Conversations on Technology Governance  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• If your business qualifies, you can access NMTC-subsidized loans that offer favorable terms and potential loan forgiveness after seven years. 

• Sectors such as healthcare, manufacturing, education, and renewable energy may qualify, while certain restricted businesses are excluded. 

• To be a successful job applicant, you should demonstrate job creation, training programs, or improved access to services like healthcare or education. 

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The New Markets Tax Credits (NMTC) Program is a federal initiative aimed at supporting businesses that make capital expenditure (CapEx) investments and create community impact in low-income areas in the U.S. Through the NMTC program, companies making these investments can receive tax credit-subsidized loans for use in their projects. Among other preferential terms, these NMTC loans generally provide for forgiveness of the principal at the end of a seven-year term, delivering a permanent cash benefit to investors. 

These FAQs provide insights and answers about the program, offering an overview of its features and explaining how businesses can benefit from participation. 

What is the NMTC program? 

• The NMTC program was created in 2000 as part of the Community Renewal Tax Relief Act and was designed to subsidize capital investments in low-income communities. Businesses that invest in eligible low-income communities (Qualified Active Low-Income Community Businesses or QALICBs) are eligible to receive tax credit-subsidized NMTC loans that have principal forgiveness features after a seven-year term, providing a permanent cash benefit to the QALICB. In addition to principal forgiveness, these loans offer other beneficial features, including interest-only terms and below-market interest rates. 

Who can benefit from the NMTC program? 

• Businesses that make CapEx investments in eligible low-income census tracts are eligible to apply and receive NMTC financing. Businesses can be either for-profit or not-for profit.  

• Additionally, the NMTC program supports a wide range of business sectors, including manufacturing, healthcare, retail, renewable energy, education, and more. Businesses involved in the following activities are not eligible for NMTC financing: massage parlors, gaming facilities, liquor stores, racetracks, tanning facilities, and golf courses. The NMTC program also imposes certain restrictions related to farming and residential rental properties. 

How does the NMTC program work? 

• Every year, certified Community Development Entities (CDEs) apply to the Community Development Financial Institutions (CDFI) Fund, a branch of the U.S. Treasury, for New Markets Tax Credit Authority (also known as an NMTC allocation). If awarded an NMTC allocation, CDEs use this tax credit authority to offer tax credits to Tax Credit Investors in exchange for NMTC equity. CDEs can then use the capital to make loans and investments to QALICBs with projects in low-income communities. Each CDE has its own specific strategy for its NMTC allocation (for example, some CDEs may provide NMTC financing only to businesses in certain states or certain industries) and will evaluate which projects to finance based on the community impact generated by the CapEx investment. 

• The NMTC program is currently set to expire on December 31, 2025, with the final two rounds (CY24 and CY25) of approved NMTC allocation expected to be released in the fall of 2025, totaling $10 billion. The NMTC program has generally received bipartisan support and, most recently, the Senate Finance Committee released legislative text as part of the Senate Republicans’ proposed budget reconciliation bill on June 16, 2025 that included a provision to permanently extend the NMTC program.  

NMTC Project Requirements 

Is my project eligible for NMTC financing? 

• To be eligible for NMTC financing, projects must be located in an eligible low-income census tract and must generate significant community impact. Community impact encompasses a wide range of initiatives, including but not limited to: 

• Quality job creation, generating positions that offer living wages and/or benefits such as health insurance, 401K or retirement plans, and paid time off. 

• Accessible job creation, whereby positions are made available to individuals who have only a high school degree or the equivalent, or individuals who face other barriers to employment (for example, the longer-term unemployed, displaced workers, or the formerly incarcerated). 

• Creating or expanding employee training programs or providing opportunities for career advancement. 

• Increasing access to goods or services such as healthy foods, healthcare and childcare services, education programs, and more. 

• Minority outreach efforts such as targeted hiring of minority individuals or engaging minority-owned or controlled contractors/subcontractors during construction. 

• Environmental efforts such as supporting the production or distribution of renewable energy resources; reducing energy or water use; helping builders meet Leadership in Energy & Environmental Design (LEED) certification or similar green building standards; remediating environmental contamination. 

What types of expenses are eligible for NMTC financing? 

• NMTC loans can be used towards CapEx such as costs related to new construction, building rehabilitation, or expansions, and equipment purchases. In some cases, NMTC loans can also be used to provide small amounts of working capital (usually in combination with the aforementioned CapEx). 

• NMTC loans can be used for project costs that will be incurred within 12 months of the NMTC closing date or for prior project costs that were incurred within 24 months of the NMTC closing date. 

Is there a minimum or maximum CapEx amount for eligible projects? 

• There are no restrictions on the project size to qualify for NMTC financing. 

• For smaller projects, QALICBs should consider transaction costs and other factors when determining whether NMTC financing is beneficial for the project. 

• While there is no minimum or maximum project size, CDEs generally prioritize projects that generate community impacts that are meaningful in comparison to the project size.  

Securing NMTC Allocation 

How can QALICBs apply for NMTC financing? 

• CDEs typically require QALICBs to complete an application or intake form that provides information about the project, including a project description, its timing, anticipated community impact, and information on other financing sources and the project budget. CDEs may also request typical financial reporting documents, such as prior year audited financials and the project’s financial projections, as part of the application process. 

• The CDE will then evaluate the QALICB’s application and, if approved, will offer a term sheet for an NMTC allocation. 

When should a company apply for an NMTC allocation? 

• QALICBs can apply for an NMTC allocation anytime throughout the year; however, CDEs typically seek to deploy their allocation quickly once they receive it. NMTC allocations are awarded to CDEs once annually. CDE applications for the 2024-2025 NMTC allocation round were due on January 29, 2025, and the awards are expected to be announced in late 2025.  

• The NMTC funds must be fully spent within 12 months of the NMTC closing date (i.e., the date the NMTC loans are issued to a QALICB), so CDEs typically look for projects that are ready to start construction. However, projects that are already underway are also eligible to receive NMTC financing. 

What is the typical timeline to receive NMTC financing? 

• The timeline to receive NMTC financing varies for each transaction. Once a term sheet from a CDE has been received, the typical closing timeline is approximately 8 to 10 weeks, during which time the transaction documents are drafted and negotiated. 

What are the compliance requirements for NMTC financing? 

• Once a project has received NMTC financing, the project must stay within the designated low-income census tract for seven years, in addition to meeting other NMTC requirements. 

• QALICBs will also have reporting obligations to the CDEs and Tax Credit Investor. The reporting requirements vary slightly for each transaction, but typically include community impact reporting and other customary financial reporting (such as financial statements and tax returns). 

Maximize Your NMTC Opportunity with MGO’s Tax Advisory Team 

Navigating the New Markets Tax Credit program requires strategic financial planning, detailed community impact documentation, and deep knowledge of regulatory timelines. MGO’s experienced tax professionals help businesses identify qualifying projects, prepare competitive NMTC applications, and manage compliance obligations across the seven-year term. Whether you’re building a healthcare facility, expanding a manufacturing plant, or launching a new education or renewable energy project, MGO offers the tax, audit, and consulting support you need to unlock permanent cash benefits and fulfill your mission-driven goals. Contact us to learn more.  

The post New Markets Tax Credit FAQs for Businesses  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Tariffs are driving up costs and forcing companies to rethink supply chains, supplier relationships, and sourcing strategies for resilience. 

• Boards must evaluate pricing models, competitive positioning, and financial strategies to stay agile amid shifting global trade dynamics. 

• Global operations require ongoing compliance reviews and risk assessments as countries respond with retaliatory trade measures. 

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Tariffs are back — front and center — and disrupting global markets and supply chains. In February and March, the Trump Administration triggered the latest trade war by imposing tariffs on various imports under a 1977 law — the International Emergency Economic Powers Act (IEEPA) — that had never been used to impose tariffs. These tariffs do not discriminate and now impact every trading partner of the U.S. without exception.  

Rising costs are causing organizations to scramble and question their business strategies to manage the significant and immediate cash costs involved with these new tariffs, which are all “above the line” and have to be paid by the U.S. importer of record to U.S. Customs and Border Protection at the time goods are imported. Because other countries have already announced retaliatory tariffs, similar cash costs are facing importers in foreign jurisdictions when they purchase merchandise of U.S. origin. 

Board Navigation Considerations 

Navigating this tumultuous geopolitical environment is a challenge that many boards of directors have not had to face in recent years. As directors begin to adapt to this new normal and rethink their approach to mitigate impact to their organizations, here are some issues they should consider: 

Supply Chain and Operational Resilience 

How will tariffs impact our supply chain and how can we mitigate disruption? Can we identify and prioritize where increased costs from materials and/or finished goods may arise?  

• Do we have strong relationships with our suppliers?  

• Can we partner with our suppliers to jointly offset the tariff impacts and/or improve resilience? 

• Can we renegotiate any existing supplier contracts?  

• Can we diversify our supply chain by introducing other suppliers and exploring alternative sourcing options? 

• If we diversify, how might this impact any sustainability practices in place? 

• How can we adapt and/or evolve so that this doesn’t negatively affect our bottom line? 

Pricing Strategies and Competitive Positioning 

How will tariffs impact our pricing strategy and market competitiveness? 

• Are there opportunities to capitalize on changing trade policies? 

• Are our competitors adjusting their pricing?  

• Do we need to adjust our pricing to account for increased costs?  

• If we increase our prices, will this significantly affect our competitiveness in the marketplace?  

• Are we continually seeking to expand and solidify our relationships with our customer base?  

• Do we understand and agree with assumptions by management to model the financial and operational impacts? 

• Are we investing in R&D initiatives to absorb additional costs incurred or leverage potential cost savings? 

• Have we considered financial hedging strategies to manage currency fluctuations and risk? 

Global Operations and Compliance Assessment 

Have we carried out an assessment of all countries in which we operate? 

• Have these countries introduced retaliatory tariffs or do they plan to do so? 

• Are we too reliant on one country for sourcing and could we shift and/or rely on other countries? 

• How will our customer base react if we shift operations to another country? 

• How stable is the political environment in the countries in which we operate? 

• Are we monitoring changes in trade policies and monitoring our processes to remain compliant? 

Board Composition and Expertise 

Does our board have the knowledge and skills required to oversee global trade and economic policy impacts? 

• Do we need to bring in external subject matter expertise to educate and advise the board? 

• Is the full board or a committee/subcommittee responsible for overseeing and advising on tariff strategy? 

• How can we upskill our directors in global trade and economic policy? 

Other Considerations 

Additional considerations for the board:  

• Are we anticipating trade impacts on strategy in both the near and longer term? 

• How is management prioritizing investments to adapt to tariffs and trade policy shifts? How are they defining ROI? 

• Is management considering efficiencies to be gained in automating processes related to trade and tariff considerations? 

• Do we have an intentional stakeholder communication strategy regarding the impact of tariffs on our business? 

• Is management proactive in gathering and considering feedback from suppliers and customers on pricing changes and/or supply decisions? 

Written by Rachel Moran, Damon V. Pike and Amy Rojik. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com  

How MGO Can Help 

At MGO, we understand that the return of sweeping tariffs — and the complexity they bring — can threaten every aspect of your organization’s operations, from pricing and supply chains to global compliance and board governance. Our team brings deep experience across international trade, tax strategy, and operational resilience to help you not only manage your near-term cash impacts of tariffs but also reimagine your strategies for long-term stability and growth. 

Whether you’re navigating retaliatory tariffs, reassessing competitive positioning, or future-proofing your supply chain, we can provide the insight and support you need to move forward confidently. Contact us today to learn more.

The post Global Trade Tensions: What Should the Board Know as Tariffs Evolve and Expand?  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• A slower SEC rulemaking process may reduce regulatory pressure, giving asset managers more time to adapt compliance strategies and implement reforms. 

• Shifting SEC priorities could lead to revised or withdrawn regulations, offering asset managers a chance to reassess risk and reallocate compliance resources. 

• A more supportive stance on digital assets may open the door for investment firms to expand offerings and attract clients exploring cryptocurrency exposure. 

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A Regulatory Reset in Progress 

With a new SEC chairman at the helm, your investment firm may soon feel the impact of a more measured and business-friendly regulatory approach. Paul Atkins’ confirmation signals a likely shift away from rapid-fire rulemaking and toward methodical, consultative oversight — a welcome reprieve for asset managers overwhelmed by previous years’ aggressive timelines and expanding mandates. 

While there’s still uncertainty about how far these changes will go, your firm can prepare to capitalize on a potentially reduced compliance burden, extended implementation windows, and emerging opportunities in areas like digital assets. 

What’s Changing at the SEC? 

The appointment of Chairman Atkins follows former Acting Chair Mark Uyeda’s philosophy: “Slow is smooth and smooth is fast.” This shift in mindset means your organization may benefit from longer regulatory timelines, fewer surprises, and increased opportunities to provide input before new rules are finalized. 

Key Implications: 

• Deliberate Rulemaking: Asset managers may no longer need to scramble to meet short compliance deadlines. The SEC appears poised to review and potentially withdraw or revise several proposed rules, including those on ESG disclosures, outsourcing, and custody of client assets. 

• Extended Timelines for Final Rules: Rules adopted but not yet in effect — such as the updated Form N-PORT — could see delayed implementation. This gives your firm more time to develop thoughtful compliance strategies and engage in dialogue with regulators. 

• Regulatory Clean-Up: An executive order mandates the SEC to eliminate “anti-competitive” regulations. This could simplify your compliance burden, reduce red tape, and make way for innovation — especially for firms looking to explore emerging sectors. 

Digital Assets: A Strategic Advantage 

Chairman Atkins is also signaling a more favorable stance on digital assets. If your firm has been hesitant to move into cryptocurrency and blockchain investments, now may be the time to re-evaluate. 

Under the prior administration, SEC enforcement actions created a chilling effect on digital innovation. In contrast, Atkins — with advisory experience in crypto — is expected to introduce clearer, more constructive frameworks. His focus on “rational and principled” regulation could position digital assets as a viable component of your offerings, giving early movers a strategic edge. 

Don’t Scale Back Just Yet 

Despite this seemingly softer tone, your compliance strategy shouldn’t be scaled down prematurely. Regulatory priorities are still evolving, and the risks of misjudging the new agenda remain high. 

Stay informed and keep your compliance systems strong while observing how the SEC’s actions unfold. By maintaining readiness and flexibility, your organization can adapt strategically and avoid costly missteps. 

Your Best Practices for Navigating Regulatory Shifts 

• Monitor SEC statements and actions closely to stay ahead of regulatory pivots. 

• Use extended comment periods to advocate for reasonable, industry-informed rulemaking. 

• Evaluate potential investments in compliance technology or digital assets with regulatory trends in mind. 

• Avoid reducing compliance resources until changes are formally adopted and clarified. 

How MGO Can Help 

Navigating regulatory uncertainty requires both agility and insight, and that’s where MGO comes in. Our team stays on top of every SEC development, helping investment firms interpret shifts in policy, plan for evolving compliance demands, and seize emerging opportunities, from ESG to digital assets. Whether you need support rethinking your compliance strategy, evaluating new technologies, or engaging regulators during comment periods, MGO can give you the clarity and experience you need to stay ahead, regardless of the headlines.   

The post How a Softer SEC Could Benefit Your Investment Firm  appeared first on MGO CPA | Tax, Audit, and Consulting Services.