Minutes

01 - B - 0 Call to Order

Ms. Newman-Limata noted that a quorum was present and called the meeting to order at 1:05 p.m.

01 - B - 1 Introductory Remarks by President Newman-Limata

Ms. Newman-Limata welcomed the Board and introduced the new members.

01 - B - 2 Approval of March 28, 2001 Meeting Minutes

Ms. Newman-Limata asked if there were any corrections to the draft March 28, 2001 minutes. There being none, Ms. Newman-Limata declared the minutes approved as written.

01 - B - 3 Appointment of 2001-2002 Executive Committee

Ms. Newman-Limata identified those Board members she was proposing to serve on the 2001-2002 Executive Committee. Ms. Fierstein introduced the following resolution which was seconded by Mr. Huefner:

WHEREAS, the NYSSCPA Bylaws give the Board the authority to establish an Executive Committee, and

WHEREAS, if an Executive Committee is established by the Board, it is to consist of the following persons: the President, the President-Elect, the Secretary, the Treasurer, the Executive Director (who serves on a nonvoting basis) and at least five other members of the Board; and

WHEREAS, the Board desires to establish an Executive Committee for the 2001-2002 fiscal year and wishes to appoint additional persons from among its membership to serve on such committee;

NOW, THEREFORE, BE IT RESOLVED, that the Board hereby establishes an Executive Committee for the 2001-2002 fiscal year and that in addition to the persons required to serve on such committee by the Bylaws, the following NYSSCPA Board Members are hereby designated to serve thereon:

Arthur Bloom
Carol C. Lapidus

Peter H. Frank
Kevin J. McCoy

G. William Hatfield
Ian M. Nelson

Stephen F. Langowski

Following discussion, the motion carried unanimously.

01 - B - 4 Overview of Directors' Responsibilities

Mr. Woehlke presented an overview of the Board members' responsibilities focusing primarily on the following:

Mr. Woehlke also reminded the Board of the bylaws requirement that three consecutive vacancies from Board meetings results in an automatic expulsion from the Board.

Several Board members inquired into the terms of the directors' and officers' insurance policies carried by the Society. Mr. Woehlke offered to send copies of the policies to the Board.

01 - B - 5 President's Report

a. Master List of Meeting Dates

Ms. Newman-Limata referred the Board to the agenda materials

b. New Role for Vice Presidents

Ms. Newman-Limata noted that each of the vice-presidents has been asked to become active in specified roles as follows:

Mr. Hatfield - oversight of chapters
Mr. Hendler - oversight of committees
Mr. Huefner - strategic planning
Mr. Kevin McCoy - key legislative contact

In addition, Mr. Aquilino, as treasurer, will be taking a more active role in the oversight of the Society's fiscal matters.

c. Report on AICPA Council Meeting

There was insufficient time during the meeting to address this agenda item.

d. New Chapters Update

Ms. Newman-Limata reported that the six new chapters had all held their organizational meetings and selected officers for the 2001-2002 year.

e. Committee Vice Chairpersons Ms. Newman-Limata noted that beginning with the current year, vice-chairpersons would be appointed by the president-elect for all committees, whose chairpersons were in the second year of their terms. Provided that they serve well in that capacity, in the ordinary course, vice-chairpersons would then succeed their committee chairpersons the following year.

f. Benevolent Fund

Ms. Newman-Limata reported that the Benevolent Fund has begun to receive requests for grants and would, therefore, be continued for another year.

g. Membership Survey

There was insufficient time during the meeting to address this agenda item.

h. Website

Mr. Grumet, at Ms. Newman-Limata's request, reported that the Society's website was receiving approximately 65,000 hits a day.

01 - B - 6 Executive Director's Report

a. UAA Update

Mr. Grumet reviewed the history of the Society-initiated bill to incorporate the concepts of the Uniform Accountancy Act, 3rd edition ("UAA"), into the New York Education Law. He noted that in 1999, the first year the bill was proposed, it was a study bill. In 2000, the bill stalled because it had been sponsored by Assemblyman Bragman, who had led an unsuccessful attempt to unseat the Assembly Speaker, and because the Speaker and the Senate Majority Leader expressed concern with the non-CPA ownership provision of the bill due to a concern with CPA firms performing work in other professional areas. At the June 2000 Board meeting, Mr. Grumet requested and received permission to include language to the effect that nothing in the bill would empower CPA firms to practice any other profession unless the rules of that profession permitted CPA firms to so practice. This change was, however, never made to the bill. In 2001, the legislative leadership has indicated that the bill is "ripe" except for the non-CPA ownership provision.

In the meantime, the State of Texas passed the UAA with the non-CPA ownership provision but with a provision against practicing law.

Mr. Grumet reported on a meeting of the managing partners of the large CPA firms outside the Big 5, at which the managing partners indicated that they very much wanted the non-CPA ownership provision, but that they would not risk scuttling the bill over non-CPA ownership.

Two years ago only two states had passed the UAA. In the interim many other states have passed some portion of the UAA, a number without non-CPA ownership.

Mr. Grumet's personal assessment is that the odds are good for passage in the current legislative session if the non-CPA ownership provision is dropped, and unlikely if it is retained.

Mr. Langowski introduced following resolution, which was seconded by Ms. Fierstein.

WHEREAS, the practice of public accountancy has changed dramatically in the last 53 years with CPA's being called upon to serve as business consultants and personal financial advisors to assist individuals and companies with tax, audit, information technology, business planning, employee benefit issues, privacy audits, e-commerce expertise and a wide array of other technical and financial services;

WHEREAS, the NYSSCPA, on behalf of its membership and in conjunction with the New York State (NYS) Steering Committee of The Accountants Coalition has actively sought passage of the Uniform Accountancy Act for the past several years in New York State, in an effort to modernize the State's 53 year old accountancy law;

WHEREAS, despite considerable efforts to inform members of the legislature about the importance of uniformity in state accountancy laws, certain provisions of the uniform act, namely Non-CPA Ownership, require further communications efforts;

WHEREAS, the concept of a 49/51% Non-CPA ownership of CPA firms is important to the entire profession and a cornerstone of the Uniform Accountancy Act;

WHEREAS, it is vitally important to New York firms and individual practitioners to realize the benefits of all provisions of this new act in the current calendar year so that CPAs in New York State do not continue to be at a competitive disadvantage with counterparts in neighboring states;

NOW, THEREFORE, BE IT RESOLVED, that the NYSSCPA Board directs that NYSSCPA officers, directors and staff seek passage of S.2456/A.4445, in an amended capacity, without the non-CPA ownership provision for this current calendar year;

RESOLVED FURTHER, that equivalent resources be directed to work with the NYS Steering Committee of The Accountants Coalition to secure a change in NYS Education Department Regulations to seek an increase in the profits distribution percentage to non-CPAs from 35 to 49%; as an interim step towards a statutory change in Non-CPA ownership requirements to 49/51%;

RESOLVED FURTHER, that the NYSSCPA Board directs that NYSSCPA officers, directors and staff continue active educational outreach to NYSSCPA members and to actively engage grass roots efforts to secure a regulatory change and a subsequent statutory change in non-CPA ownership requirements consistent with the UAA and actions taken by 33 other states;

RESOLVED FURTHER, that the officers, directors and staff of the NYSSCPA are hereby authorized and directed to take any actions necessary to carry out these resolutions.

The Board discussed the resolution at some length then unanimously approved it.

b. Report on FAE

1) New Trustees

Board members were referred to their agenda materials regarding the composition of the 2001-2002 FAE Board of Trustees.

2) FAE/Society Affiliation Agreement

There was insufficient time during the meeting to address this agenda item.

c. PAC Update

There was insufficient time during the meeting to address this agenda item.

d. Career Opportunities in the Accounting Profession (COAP) Program

Mr. Grumet reported that the COAP program is expanding from two to five sites, and should double the population served by the program.

e. Building Lease

There was insufficient time during the meeting to address this agenda item.

f. Relations with the State Board of Public Accountancy

Mr. Grumet noted that relations with the State Education Department are somewhat strained. He and staff of the SED had exchanged letters on several important issues of late. The first involved the apparent approval during a nonpublic meeting of the executive committee of the State Board for Public Accountancy of a resolution regarding the computerization of the Uniform CPA Examination.

Most recently the SED mailed out a survey to CPA licensees with very ambiguously worded questions on issues relating UAA bill.

Mr. Grumet recommended that the President propose a joint dinner between the Society's Board and the State Board for Public Accountancy. There was no objection.

01 - B - 7 AccountStreet Affinity Relationship and Bank Resolutions

Mr. Woehlke explained that the Society had been approached regarding an affinity relationship with AccountStreet, a company offering incorporation services to clients of CPAs. The Board's consensus was that the Society should not enter into an affinity relationship at this time.

Mr. Hatfield moved and Ms. Lapidus seconded that the bank resolution included with these minutes as Attachment A should be approved. Following discussion, the resolution was unanimously approved.

01 - B - 8 AICPA - SSNI

Ms. Newman-Limata recognized Mr. Clarke Price, President and CEO of the Ohio Society of CPAs and President of State Societies Network Inc. ("SSNI"), Mr. Brent Johnson, COO of Shared Services LLC ("SSLLC"), and Mr. Larry Beaser, a partner of Blank Rome Comisky & McCauley LLP and legal counsel to SSNI and SSLLC. Messrs. Price, Johnson, and Beaser explained the benefits of the Society's continued participation in SSNI generally and the terms of the agreement to extend and expand the Phase I agreement that the Society entered into with SSNI during 2000. That agreement included the limited license of the Society's database. The guests accepted numerous questions from the Board, guests, and Mr. Jonathan Howe, of the Chicago law firm of Howe and Hutton, the Society's outside counsel on this matter. Following their presentation, Ms. Newman-Limata thanked the guests for their assistance in understanding the Phase I expansion.

Ms. Newman-Limata then recognized Mr. Howe who reviewed and reviewed his June 7 letter regarding "Phase 2 Relationship Among Various Entities and the Role of NYSSCPA." He noted that there are three common functions performed by professional associations: member driven programs, insurance programs, and affinity programs.

The Board entered into an extensive discussion of whether to continue the phase I agreement under the terms outlined by Messrs. Price, Johnson, and Beaser. Among the points made by the Board were the following:

Mr. Hatfield introduced a motion that the Society should refrain from entering into the Phase I continuance agreement. Mr. Federmann seconded. Following extensive discussion, the motion carried with 15 members voting in favor and 10 opposed. Three members abstained.

Mr. Langowski then moved to authorize Mr. Grumet to execute an agreement extending Phase I on the same terms as the original Phase I agreement. Mr. Berlant seconded. Following discussion the motion was unanimously approved.

01 - B - 9 Proposed Society Policies There was insufficient time during the meeting to address this agenda item.

01 - B - 10 Financial Matters

a. Financial Statements for the Eleven Months Ending April 30, 2001

Ms. Chambers reviewed the Society's financial statements with the Board.

a. Update on Audit Schedule

There was insufficient time during the meeting to address this agenda item.

a. Dues Revenue Received as of June 6, 2001

Ms. Chambers noted that as of June 6, 53% of the membership dues for the current year had been collected, including 16% percent paid by credit card, a newly introduced feature.

01 - B - 11 Executive Session

Ms. Newman-Limata announced that the Board would move into executive session. During the executive session, Mr. Berlant moved and Mr. Hatfield seconded a motion to approve the minutes of the previous executive session and add them to the minutes approved earlier in the meeting. Following discussion, the motion carried unanimously.

01 - B - 14 Adjournment Ms. Newman-Limata asked if there was any further business to come before the meeting. Mr. Federmann moved that the meeting be adjourned, Mr. Berlant seconded. The motion was unanimously approved. The meeting adjourned at 5:30 p.m.

Respectfully submitted, Sharon S. Fierstein Secretary