Back and Middle-Office Services
Our back-office and middle-office operations permits private equity fund managers to concentrate on the fund’s core operations, minimize administrative costs, and ensure data integrity. Our services represent variable costs to the fund that can easily increase with demand or decrease during off-peak times.
Back and middle office operations services provided
- Financial Reporting – Fund and portfolio company financial reporting for limited partners and fund managers, monitoring of portfolio company performance
- General Accounting – Bookkeeping functions, posting journal entries, account reconciliations, preparation of financial statements, management of operating cash
- Capital Accounting – Tracking cash intake, basis in entities, maintenance of investor capital accounts, calculation of distributions
- Tax Services – Preparation of tax returns, tax consulting for portfolio companies and the fund, tax representation
- Business Valuation – ASC 820 (formerly FAS 157) compliant mark-to-market portfolio company valuations for fund return calculations
- Preparation of Investor Communications – fund return calculations, investment reports, capital call notices
- Principal Tax Planning – Understand principals’ tax liabilities and goals, develop a plan to minimize tax liabilities, enhance after-tax return on investment
The Cendrowski Corporate Advisors Approach
Transferring responsibility for these activities to an independent third party reassures limited partners that they are receiving timely and accurate information. Administrative resources at the fund level are freed up, permitting managers to focus on scouting, screening, and harvesting deals. Costs to the PE firm are further decreased, as these operations are typically borne by the PE fund, not the general partners.
- Permit fund managers to focus on core operations
- Assimilate all necessary information for fund managers, reducing the need to “chase information”
- Increase investor confidence in financial reporting and portfolio company valuation
- Can easily increase or decrease with demand throughout the fund’s life
- Are performed by licensed industry specialists
- Facilitate third-party control on movement of funds
Cendrowski Corporate Advisors and its affiliated companies have served clients for over 35 years. We pride ourselves on the diversity of our services offered to legal counsel, corporations, private equity, government and not-for-profits.
Our investigation services include comprehensive background investigations, asset searches, physical surveillance, on-the-ground investigation activities, interviews, undercover activities, digital forensics (computer evidence retrieval), and BSA Look Back Reviews as ordered by the FDIC in conjunction with enhanced due diligence investigations. Our team has tremendous experience with foreign operations, and we have direct contacts in many foreign countries.
Our experienced professionals are unparalleled in this service area. Members of our investigative team hold an average of 4 nationally recognized financial and forensic certifications and bring an average of more than 20 years’ investigative experience. They have served as expert witnesses in numerous trials and their analyses have been recognized by judges and juries for their comprehensiveness.
Our network resources span the globe, with investigators located in every state and most every country, and provide specialized scientific knowledge. As with all of our services, our investigative activities are performed with the highest degree of confidentiality.
Our team and our affiliates work with investigators, government agencies, businesses, and legal counsel to provide independent internal investigation services. Our professional investigation expertise includes fraud deterrence and investigation, interview and interrogation, background checks and investigations, surveillance, and investigative due diligence.
CCA’s investigative services provide organizations with actionable intelligence in order to:
- Hire key personnel
- Establish vendor relationships
- Commit to affiliations and sponsorships that are critical to the business
- Make financial commitments to drive commerce
- Assess and finalize acquisitions and joint ventures
- Assess current key officers, Board members and other professionals.
Our services are led by James Martin, CMA, CIA, CFE in the Detroit area and Randy Wilson, JD, CPA, CFE, CFF in the Chicago area.
CCA utilizes affiliations with CPAmerica (a global association of accounting firms) along with former FBI Special Agents, Private Detectives and other law enforcement officers to assist and supplement our practice around the globe.
Our services have helped organizations uncover multimillion dollar frauds, complicated money-laundering schemes, and revealed otherwise unknown personal information that has changed investment, management, and hiring decisions. We have published our knowledge of fraud in The Handbook of Fraud Deterrence, a textbook distributed by John Wiley & Sons.
We use a phased approach to our investigations in order to deliver the results you need. CCA uses up to fifty sources of intelligence.
Our approach allows us to develop intelligence regarding:
- Regulatory issues,
- Criminal and civil litigation involvement
- Verification of education and credentials
- Professional licenses
- Judgements and liens
- Adverse media
- Associated business entities and relationships
- International searches and surveillance.
A single piece of intelligence can change the entire course of a background or resultant investigation. The essential component of due diligence may be the last phone call that you didn’t make. CCA’s background investigation services include:
- Holistic Investigations—Our detailed investigations can provide information on companies and individuals’ backgrounds, assets, and even reputational backgrounds when necessary.
- Information from its original source: Our information is compiled from the point of origination.
- Quick turnaround time: In some cases, we are able to provide same-day information to clients.
- Experienced interviews: Our interviews are performed by former FBI Special Agents responsible for interviewing thousands of individuals in their career.
- Customized reporting: We distribute information to clients in the format of their choice. We prepare formal background investigation reports when requested and distribute information as it becomes available.
- Confidentiality — Our services are private and confidential. We have never published a client list in our over 35 years of existence.
We have a longstanding yet independent relationship with several international investigative, cyber security and risk management firms. This allows us to coordinate our actions to achieve engagement efficiencies, while also allowing clients options to manage the aspects of privilege.
Intellectual Property Investigations
Cendrowski Corporate Advisors is affiliated with a leading intellectual property firm that specializes in investigations, anti-counterfeit/gray market enforcement and anonymous acquisitions of IP assets. They serve a range of clients from Fortune 500 corporations to entrepreneurs in numerous industries around the world. Their team is comprised of private investigators, former trademark litigation and prosecution paralegals with years of IP experience. Their current capabilities extend across the globe. All team members have worked at a corporate legal department or on an IP litigation team. By providing a wider array of specialized services generally not offered by typical private investigation firms, their primary focus is to provide investigative services and ancillary support at reasonable rates. Their agents are prepared to go undercover for matters where stealth is vital to the success of the case.
Our investigative services:
- Interviews and interrogations
- Site visits and physical controls
- Financial transaction tracing
- Document retrieval
- Digital forensics of computers, tablets and other devices
Our professionals work with corporate and individual clients and their legal counsel to investigate and resolve fraudulent activities.
- With respect to fraud-related services, CCA’s team specializes in locating alternate documentation for evidence that has been altered or destroyed, thereby concealing the true economic basis of a transaction or deceiving financial information users. We also evaluate the legitimacy of latent transaction documentation, permitting transpired events to be recreated and understood.
- Our team’s success is a direct result of a detail-oriented philosophy that pervades every engagement.
- Our team members adhere to proven processes when preparing reports and expert witness testimony. We strive to ensure accuracy in all elements of our work, which has been accepted and upheld by legal venues around the country.
Fraud Deterrence Methodology
Cendrowski Corporate Advisors is the only firm in the country whose fraud deterrence methodology is licensed to professional organizations. We wrote the training program used to certify every Certified Fraud Deterrence Analyst (CFD), a designation accredited by the International Association of Consultants, Valuators and Analysts (IACVA). The National Association of Certified Valuation Analysts (NACVA) also uses our methodology to train Certified Forensic Financial Analysts (CFFA).
ESOP Succession Planning Solutions
ESOP Succession Planning
Establishing a succession plan beneficial to you and your employees is vital. You may be aware of more traditional methods of transferring ownership, such as selling to a third party; however, selling to an employee stock ownership plan (ESOP) may be the right solution for your company. An ESOP allows you to retain control of the business and protects the employment of valued workers, creating a win-win situation for your company and your employees.
What is an ESOP?
An ESOP allows you to sell all or a portion of your investment in the company while retaining business continuity and control of business decisions and operations. An ESOP is a qualified retirement plan allowing eligible employees to receive an annual allocation of stock. Stock acquired by an ESOP is legally held in an ESOP trust, and employees are simply beneficial owners in the value of the stock. Employees do not legally own the stock and they may only vote in a few major events, such as the sale of company assets, mergers, etc. An ESOP does not change the operations or management of the company.
ESOP Tax Benefits
Because of certain tax benefits, the ESOP purchase essentially is funded with pre-tax dollars. One advantage with leveraged ESOPs (those with debt) is principal payments made on the acquisition debt are tax deductible. Further, S corporation earnings attributable to an ESOP are exempt from federal and state income taxes (except in states that do not recognize S-corp status). A company that is 100 percent ESOP-owned and taxed as an S corp is exempt from federal and most state income tax, regardless of profitability. An ESOP provides a market to sell your stock at fair value, which generally results in greater tax advantages than you would receive by selling company assets. Further, if certain requirements are met, the sale of your stock may be tax-deferred or possibly tax-free. (You must reinvest in a qualified replacement property within 12 months of the sale date.)
Existing ESOP Companies
Existing ESOP companies face unique opportunities and challenges. Many mature ESOPs have benefited from acquisitions, realizing higher returns than non-ESOP companies through enhanced tax savings on future profits. These companies also can provide the sellers unique tax advantages, providing additional leverage during the negotiation process.
As ESOP companies mature, it is important to continuously monitor the structure of the ESOP and adapt to legislative changes, repurchase liability issues and employee benefit issues. Mature ESOPs also need to evaluate available executive compensation plans so they can retain and attract top talent, an element critical to the company’s success.
CCA understands privately owned businesses and the unique succession issues they face. During the past decade, CCA’s ESOP advisory group has acted as the principal coordinator in closing more than $2.7 billion in leveraged ESOP transactions. We work with some of the largest 100% ESOP-owned S corps in the country, providing accounting, tax and advisory services ranging from acquisition assistance to executive compensation design. CCA also stays abreast of legislative changes that could affect ESOPs, advising companies about the potential impact to their organization.
ESOP solutions include:
- Performing ESOP feasibility and structure analysis
- Coordinating ESOP transactions
- Communicating ESOP benefits to employees
- Helping design executive compensation plans
- Evaluating and restructuring existing ESOPs
- Analyzing potential acquisition opportunities
- Analyzing repurchase liability
- Providing ESOP recordkeeping and compliance services
Cendrowski Corporate Advisors advises public companies, private companies, and nonprofit and philanthropic organizations on their governance and risk management processes.
- Our professionals assist organizations in establishing comprehensive enterprise risk management (ERM) practices. These practices will help your organization understand and address the industry-specific, firm-specific, operational, compliance, and competitive strategy risks you face.
- As the organization develops the ability to make more informed decisions regarding risk, and develops organizational resilience, they can leverage the opportunities that other organizations may not be comfortable in taking, creating an opportunity for competitive advantage.
- CCA’s Enterprise Risk Management services take into account both the probability and impact of such risks, allowing your organization to prioritize areas needing attention. By using our ERM services, your organization will improve its ability to better perceive risks in its external and internal environments, while standardizing risk management procedures and practices. Boards of directors and C-suite executives will also have increased confidence, knowing that risks are being properly assessed and managed.
Our team is uniquely qualified to offer governance advisory services. In addition to their experience at international CPA firms, members of our team have served as SEC compliance officers and FBI white-collar crime special agents.
- These individuals help private companies improve and assess their governance practices, and public companies with securities law compliance matters.
- Members of our team also advise nonprofit and philanthropic organizations on their governance practices. We understand the vital role played by these organizations, and the unique nature of their operations. Our team members have served on numerous nonprofit and philanthropic boards, and community service is one of our firm’s key beliefs.
What are your greatest cyber risks?
- Potential cost of a data breach and release
- Theft of intellectual property
- Damage to brand reputation
- Cost of clean-up and restoration
- Regulatory penalties or interventions
- Data held hostage by ransom-ware
Cybersecurity is Risk Management™.
Just like other risks facing your organization, cybersecurity risk can be assessed and mitigated through proper risk management procedures.
- Cyber risk management involves five steps that are scalable to organizations of varying size and technical complexity.
- Most importantly, cybersecurity and cyber risk management is not an IT issue – it is an organizational risk that must be addressed holistically in the organization.
- As part of our risk management practice, we are in the business of solving problems for our clients by linking them to strategic partners who provide the highest level of service in their fields. CCA’s partnership with CyFIR gives our clients access to cybersecurity and cyber insurance provided by some of the world’s top technical experts from government, military and the private sector.
How CCA Attack’s Back
- One-Source Cyber Services: Comprehensive risk capabilities paired with worldwide resources
- System Profile: Identification of exposure points, vulnerabilities and risks
- Quantitative Cost Analysis: Our accurate cost analysis of a potential disruptive cyber event provides dollar figures you can weigh against your cybersecurity investment
- Scalable Services: Plans scaled to the size of your organization
- Monitoring: Risk vulnerability and occurrence are tracked 24/7/365
- Powerful Plan: A step-by-step action process to identify and address risk and mitigate damage
Anti-Money Laundering Processes
The Bank Secrecy Act (BSA) and its implementing regulations, most notably the USA PATRIOT Act, defines rules to help detect and report suspicious activities that may be indicators of money laundering. Other regulatory organizations, such as the FDIC, NCUA, and FINRA, have implemented their own rules and guidelines for compliance with the regulations.
Anti-money laundering (AML) programs are required for financial institutions, money services businesses, investment firms, and other organizations that may process larger cash (or cash equivalent) transactions. We are frequently engaged by these organizations to assist with the evaluation and development of anti-money laundering processes.
Anti-Money Laundering Compliance Programs
We assist organizations with the development, evaluation, and improvement of anti-money laundering compliance programs.
- Common improvements include updating the program for new requirements (i.e. beneficial ownership detection), updating and augmenting written documentation and development of staff training programs.
- We are also engaged in the advent of a regulatory examination to provide a ‘dry run’ of the inspection and identify defects in the design and make recommendations for improvement.
- We have worked with financial institutions under FDIC memoranda of understanding to assist them with resolving their compliance issues.
Cendrowski Corporate Advisors frequently works with banks and credit unions to help them assess and implement procedures related to their Bank Secrecy Act (“BSA”) Compliance Programs. In many situations, we have assisted the bank while they were under FDIC scrutiny.
Our dedicated and experienced team will review, assess and develop the bank’s written program for monitoring and reporting suspicious activity to comply with all applicable requirements of the FDIC’s Rules. We also provide training for the bank board of directors, management, staff, and BSA Staff regarding their responsibilities for identifying and reporting suspicious activity, including filing Suspicious Activity Reports (SAR).
As an independent and qualified third party:
- We perform lookback reviews by reviewing deposit accounts and transaction activity to ensure that all suspicious activity involving any accounts of, or transactions through, the bank were properly identified and reported in accordance with all applicable BSA reporting requirements.
- Advise on BSA Risk Assessment procedures which include all risk areas, including any new products, services, targeted customers, entities, and/or geographic locations.
- Assist banks with the development and implementation of a written Customer Due Diligence (CDD) Program. The program requires a risk focused assessment of the customer base to determine the appropriate level of ongoing monitoring required to ensure that the bank can reasonably detect suspicious activity.
- We conduct enhanced customer due diligence (ECDD) where we perform extensive background and relationship investigations, including in-person interviews, if needed, to document the underlying business arrangements of the customer.
Know Your Customer Programs
Know your customer programs (KYC), verify the customer’s identity and assess the risk a customer poses to the organization, and require the organization to understand nuanced details about the account holder, including the nature of their business, source of income, and business relationships.
- As the organization processes cash transactions for the account holder, the transaction must be evaluated against the understanding of the business to identify suspicious activity.
- Know your customer risk assessment processes must be ongoing, not a one-time evaluation, and need to involve different areas of the organization to be comprehensive.
- Training is essential so people across the organization understand their role in the know your customer/anti-money laundering program.
Enhanced Customer Due Diligence
Based on a know your customer risk assessment, an organization may determine it necessary to perform additional procedures to verify details about a customer’s identity or business. We are frequently engaged to perform these procedures on behalf of the organization:
- Site visits and detailed interviews with the customer
- Background checks, including criminal history searches, public records searches, OFAC lists
- Tracing organizational and other records to determine beneficial ownership