Minutes

A quorum being present, the meeting was called to order at 9:40 a.m.

Review Meeting Minutes

The Committee members reviewed the minutes of the July 30, 2004 and July 7, 2005 meetings. Chair Ruppel recommended deferring the review and approval of both meeting minutes due to multiple editorial changes needed.

Required Auditor Communications and Review of Draft Audited Financial Statements

Mr. Benjamin noted that the Mr. Cheung has been working with inadequate staffing but has made progress in Accounting department. Mr. Grumet responded that there were two vacant positions in the accounting department and that recruitment has already begun.

Mr. Benjamin communicated that Goldstein Golub and Kessler LLP (GGK) would still exist until it was completely merged with RSM McGladrey, Inc. Independence issues were discussed as the current Vice President of the Society is Mr. Victor Rich, a partner with RSM McGladrey. Mr. Benjamin assured the committee that any impairment of independence would be addressed prior to the next Executive Committee meeting. Mr. Benjamin suspected that Mr. Rich would most likely resign his position with the Society.

Mr. Ashenfarb asked if the merger of GGK into RSM McGladrey would have any other impacts on the audit. Mr. Benjamin answered that GGK had been very careful about its employee activities. It was noted that one of their employees was a Chapter Treasurer and subsequently resigned that position and GGK’s employees would not join certain committees such as the Nominating Committee.

Mr. Reiss of GGK reported that this was the second annual audit of the Society by GGK. He did not find any independence issues during this audit year. Mr. Reiss noted that there was a genuine sense of cooperation between management and the audit firm.

Mr. Reiss noted that there were no changes of accounting policy. NYSSCPA PAC and NYSSCPA Benevolent Fund are reported as Temporarily Restricted Funds in the Consolidated Financial Statements. With respect to membership development expenses, Mr. Reiss stated that the amount was not material enough to separately report in the financial statements. Mr. Benjamin added that if the membership development expense became material, it should be reported separately.

Mr. Reiss reported that the Society wrote off $ 5.5 million of fully depreciated or amortized fixed assets.

With respect to deferred member dues, this year GGK was able to select and test random samples from the electronic downloads provided by Mr. Cheung. GGK also analyzed the relationship of cash and deferred revenue and no adjustments were needed.

Mr. Ashenfarb asked if the Finance Committee reviewed the same information as the Audit Committee did. Mr. Cheung answered affirmatively. Regarding capitalization of rental expenses, Mr. Benjamin stated that it was acceptable to capitalize rental expenses during the construction period. The EITF issue no. 05-3 showed that there was diversity over accounting for rental costs during a construction period and that the FASB Task Force closed the issue without coming to a conclusion.

Discussion ensued regarding the level of unrestricted cash required by Bank of America at the end of each fiscal year. Chair Ruppel asked Mr. Cheung to look into this issue and respond to the Committee via conference call later that day.

Mr. Krostich agreed to sign off the financial statements temporarily, based upon the materials present, pending an answer from the Bank of America.

To conclude the report on the audited financial statements, Mr. Reiss stated that the auditor’s opinion was unqualified as was the prior year.

Report to Management

Mr. Benjamin added that the changes in Unrestricted Net Assets were $548,000 and $586,000 for the year ended May 31, 2005 and 2004 respectively.

Mr. Benjamin then presented the management letter. There were two observations and comments for the current year: the maintenance of accounting and related records of Chapters and the vacation accrual policy. Mr. Grumet responded that the Society would further tighten control over contracts signed by Chapters and revise the current vacation policy.

In conclusion, Mr. Benjamin recommended that the Board of Directors should consider appointing a director to serve on the Audit Committee.

An Executive Session was held and all staff were excused.

Adjournment

There being no further business, the meeting adjourned at approximately 11:15 a.m.

Respectfully submitted,
Adam Cheung

Approved by Chair Suzanne Jensen August 23, 2006