Minutes of:

Board of Directors Meeting

Date & Time:

Tuesday, March 19, 2002, 9:01 a.m. to 3:00 p.m.

Location:

Society’s Offices, 530 Fifth Avenue, 5^th Floor, East Room

Presiding Officer:

Nancy Newman-Limata, President

Members Present:

Peter H. Frank

Angelo J. Gallo

Stephen F. Langowski

Carol C. Lapidus

Thomas O. Linder

Sandra A. Napoleon-Hudson

Ian M. Nelson

Thomas J. Novak

Raymond M. Nowicki

Kevin J. O'Connor

Mark A. Plostock

P. Gerard Sokolski

Edward J. Torres

Beth Van Bladel

Howard D. Weiner

Members Absent:

Frank L. Kurre

Raynard Zollo

Others Present:

David Evangelista

Myrna Fischman

Staff Present:

Robert Colson

James A. Woehlke

a. Benevolent Fund

Ms. Newman-Limata informed the Board that the Benevolent Fund plans to examine the submission received from one potential grant recipient.

b. Recent Press Activity

Ms. Joanne Barry, Society director of communications, noted that the Society has had more than 30 press placements and meetings with editorial boards. Mr. Grumet briefed the Board on recent meetings with the editorial boards of major New York newspapers including Newsday, The Buffalo Evening News, Albany Times Union, and Gannett.

c. Report of the Real Estate Task Force

Ms. Newman-Limata noted that the Society is looking at other locations as future office space for the Society. She reported that the option once held by a potential successor tenant for the Society’s current space has expired. Therefore, the current space would be available, albeit at a higher rent than the Society is willing to pay. The task force recommended that the Society issue a request for proposals (RFP) from real estate brokers to evaluate the possibility of moving to a new location and assist in negotiating with the current landlord to remain at the present location. The Executive Committee authorized issuance of such an RFP.

d. Report of the Awards Committee

Mr. Sokolski briefed the Board on the Awards Committee report, noting that recipients were not selected for some awards. Award recipients were as follows:

NYSSCPA Distinguished Service Award:
- Steven Baum

Dr. Emanuel Saxe Outstanding CPA in Education Award:
- Ilene Leopold Persoff

Hall of Fame Award:
- Philip L. Defliese and
- Stuart Kessler

After careful consideration, the Awards Committee recommended that the following awards remain vacant this year:
– Arthur J. Dixon Public Service Award;
– Outstanding CPA in Industry;
– Outstanding CPA in Government Award; and
– Special Recognition Award.

a. Camico Status

Mr. Grumet reported that Camico wrote 183 policies, totaling $794,000 in premiums, which was short of the $1 million expected by the beginning of this year. Mr. Grumet noted that Camico does better upstate than downstate, positing that the difference may be due to a more vigorous campaign by the upstate brokerage firm.

b. Office Space Rental

Mr. Grumet reported that the Society had recently rented some vacant space in the office to an outside company, and that this arrangement was later opposed by the Executive Committee. Mr. Grumet said the Society would develop and bring back to the Board a policy on office space rentals.

Mr. McCoy provided an update to the Board on the Society’s recent legislative activity. The State Board for Public Accountancy had an unscheduled meeting on February 18, 2002 to discuss their legislative posture on current accountancy bills. Most of the Board for Public Accountancy seemed to oppose auditor rotation, revolving door requirements and prohibiting firms from offering nonaudit services to their audit clients. The State Education Department appeared to favor these proposals, however.

Mr. Federmann moved, and Ms. Lapidus seconded the following resolution:

RESOLVED, that the NYSSCPA endorses the following guiding principles regarding scope of services:

Auditors may not:

• Have a direct or indirect financial interest in their audit clients or a mutual financial interest with their audit clients.
• Perform management functions or make management decisions for their audit clients.
• Audit their own work.

Following discussion, the motion was unanimously approved.

Mr. Hatfield moved that the Society resolve to take a strong stance against allowing non-licensees to issue compilations or reviews. Mr. Nowicki seconded the motion. The motion carried. Messrs. Hendler and Aquilino opposed the motion.

02 – B – 5
Budget for Year Ending May 31, 2003

• NYSSCPA Chapters – There is an $85,000 expense reduction, which reflects the fact that 13 chapters have agreed not to publish individual newsletters, but will include their activity reporting in The Trusted Professional.
• NYSSCPA Chapters – There is s $77,000 expense reduction as a result of requiring every chapter to bring in sufficient social revenue to cover social expenses.
• NYSSCPA Chapters and Committees – There is an $18,000 expense reduction to eliminate the leadership directory and the committee brochure. These two pieces will only be online, and not printed and mailed to our members.
• NYSSCPA Committees – There is a $25,000 expense reduction from elimination of breakfast at committee meetings, and an additional $25,000 expense decrease from holding all committee meetings in the Society’s offices instead of renting outside rooms when the Society space is full.
• NYSSCPA Committees and Governance – There is a $14,000 expense decrease resulting from savings on hotel charges per a new contract with the Super 8 Hotel at 46th Street and 6th Avenue. The Society has negotiated a rate of $109 per night.
• NYSSCPA Membership Dues – There is an $863,000 net increase in dues revenue.
• Staff Compensation – Staff compensation decreased by $394,000 due to the eight positions eliminated in the preceding three months – a total of 13 positions had been eliminated in the 2001-2002 fiscal year – $50,000 due to a reduction in the use of temporary staff, and $20,000 due to a reduction in overtime.
• COAP/Scholarship – The budget assumes approximately $100,000 to be raised through fund raising.
• Educational Program (FAE) – FAE would require a contribution of approximately $595,000 from the Society.

Mr. William Pape, the associate director of member services, briefed the Board on the latest membership report, which included 424 new members and 1,305 terminations for nonpayment of dues. With Board approval of the terminations, the Society has a total of 29,169 members.

Ms. Fierstein moved, and Mr. Federmann seconded, that the Board accept the membership report, including termination of the nonpaying members. The Board unanimously approved the motion.

02 – B – 7
Report on New Chapters

Mr. Hatfield introduced the following new chapter presidents who provided an update on their chapters:

• Mr. Ed Torres, NYSSCPA Board member and president of the Queens chapter,
• Mr. David Evangelista, president of the Rockland chapter, and
• Dr. Myrna Fishman, president of the Brooklyn chapter.

Mr. Hatfield reported that the overall state of health for all chapters is excellent. He suggested that future Society Vice Presidents for Chapters should provide the Board with a “report card” on the health of all chapters, indicating if a chapter requires assistance or, in extreme circumstances, should be eliminated. Mr. Hatfield recommended that outgoing the Vice President for Chapters meet with the incoming replacement to brief the new officer on the duties of the office.

a. Financial Statements for the nine months ending February 28, 2002

Mr. Aquilino briefed the Board on the Society’s financial statements for the nine months ending February 28, 2002. Ms. Newman-Limata reminded the Board that in viewing the financial information from a program perspective, FAE should not be viewed as separate and apart from the Society anymore. Instead, the financial report should combine all membership programs.

b. Investment Report

The Board discussed the report of the November 26, 2001 Investment Committee meeting. Ms. Chambers noted that the Society was paying higher service charges with Bank of New York investments than were paid to Merrill Lynch. Ms. Chambers said she called the bank’s representative and asked them to find an investment vehicle that would be less expensive. The bank indicated they would report back to her on other investment options.