Minutes
The
meeting was called to order at 3:05 P.M.
Chair
Warren Ruppel asked everyone to introduce themselves and
discuss their backgrounds.
Fiscal
Year 2004 Audit Issues
Lynn
Chambers listed the following issues that Goldstein, Golub,
and Kessler (GGK) need to be aware of during their audit
work:
-
Office Move- Ms. Chambers discussed this and noted that
the method of accounting for the payments as well as for
the sublease receipts were discussed with Adam Reiss.
-
Bank Changeover- Ms. Chambers noted the changing of banking
relationships from the Bank of New York to Fleet/ Bank
of America, not only at this office but also at 10 chapters
throughout the state.
-
Internal Control Review- Ian Benjamin of GGK noted that
all issues raised by the review, as well as by the management
letter for May 2003, would be listed in the 2004 management
letter.
-
Purchase
Order System- Ms. Chambers explained that the system is
not being used properly. She asked GGK to review the procedures
that had been implemented and to suggest corrections.
-
COAP Fund Raising- The committee was informed that fund
raising has been done for the first time.
-
Imaging System- This system, currently being utilized
for contracts and peer reviews, was discussed.
Mr.
Benjamin also raised the elimination of the interfund balances
between Society and FAE. Mr. Grumet noted that the organization
is drafting a contract between Society and FAE, and the
appearance of a $2M debt was misleading.
Mr.
Grumet also said that the Society has begun to set aside
funds to create a $1M reserve for future emergencies. Mr.
Benjamin suggested that Mr. Grumet submit a written proposal
to the Board for their discussion and approval.
Statement
on Auditing Standards (SAS 99)
Mr.
Benjamin and Mr. Reiss reviewed a handout that was given
to the committee and provided an overview of SAS 99. During
subsequent discussion, Ms. Chambers drew GGK’s attention
to the fact that $500K in peer review revenue should be
included in their testing of revenue recognition. Ms. Chambers
noted that although the examination of expense reports was
important, the amount of employee travel expense was immaterial
in relation to the financial statements. The inherent audit
risks of each chapter having a checking account were discussed
at length. Mr. Benjamin also raised an issue relevant to
the audit committee itself, which is that no board member
sits on the committee. This is an issue that has been discussed
by the New York State Attorney General.
Audit
Timeframes
The
committee discussed the required draft completion dates,
which are driven by the meeting dates of both the Executive
Committee and the Board of Directors. GGK affirmed that
they would have a first draft available (including a management
letter) for review by the Audit Committee by the end of
July.
Committee
Action Plan
Chair
Ruppel distributed a draft Committee Action Plan. The committee
has been asked to review the draft, and to email the Chair
with any suggestions or changes. GGK will provide the committee
with some suggestions to consider for the plan, including
the right of the committee to engage legal counsel.
Adjournment
With no further business to be discussed, the meeting was
adjourned at 4:25 P.M.
Respectfully
submitted,
David
Haar
