Minutes of:

New York State Society of Certified Public Accountants Board of Directors Meeting

Date & Time:

Thursday, September 18, 2008, 9:08 a.m. to 2:30 p.m.

Location:

3 Park Avenue, 19th floor, New York, New York

Presiding Officer:

Sharon Sabba Fierstein, President

Board Members Present:

David J. Moynihan, President-Elect
Barbara S. Dwyer, Vice President
Joseph M. Falbo, Jr., Vice President
Elliot L. Hendler, Vice President
Margaret A. Wood, Vice President
Richard E. Piluso, Secretary/Treasurer
Scott M. Adair
Edward L. Arcara
John Barone
S. David Belsky
Warren M. Bergstein
Thomas Boyd
Anthony Cassella
Robert L. Goecks
David R. Herman
Scott Hotalen
John B. Huttlinger, Jr.
Martha A. Jaeckle
Suzanne M. Jensen

Lauren L. Kincaid
Gail M. Kinsella*
Nancy A. Kirby
J. Michael Kirkland
Kevin Leifer
Elliot A. Lesser
David A. Lifson
Anthony J. Maltese
Mark L. Meinberg
Avery E. Neumark
Robert A. Pryba Jr.
Joel C. Quall
Ita M. Rahilly
Judith I. Seidman
Thomas M. VanHatten
Liren Wei
Charles J. Weintraub
Louis Grumet, Executive Director

Board Member Absent:

Susan M. Barossi

Cynthia D. Barry

Staff Present:

Suvro C.K. Banerjee
Joanne S. Barry
Alex Charles
Craig Mandelbaum
Ernest J. Markezin
Dennis O’Leary

William J. Pape
Alan Schmelkin
Paul L. Sinegal
Lois Whitehead
James A. Woehlke
Dominic Young

B08 – D – 0
Call to Order

President Sharon Sabba Fierstein noted that a quorum was present and called the meeting to order at 9:08 a.m.

B08 – D– 1
Minutes

Approval of Minutes of July 14, 2008, Board Meeting

Ms. Fierstein asked Board members if they had any changes or additions to the minutes of the July 14, 2008, Board of Directors’ meeting. Mr. Piluso moved to approve the minutes and Mr. Lesser seconded. A few editorial changes were approved and the motion to approve the minutes as amended passed unanimously.

a. Update on Ethics Procedural Manual

President Fierstein discussed the on-going project by the Professional Ethics Committee (PEC) to update its Procedures Manual. The PEC recently submitted proposed revisions to four sections: overview, reinstatements, limited reviews and dispositions. The four revised sections were sent by PEC to the Quality Enhancement Policy Committee (QEPC) for review and approval, and then to the Executive Committee for final approval. The Executive Committee voted to approve the revisions. The PEC was working on revisions to other sections of the Manual, and would submit them to QEPC and the Executive Committee.

b. Town Hall Meeting Schedule

Ms. Fierstein reported that CCH, a Society member benefits program, was providing a free publication to attendees at each town meeting as a promotion of their discount program

a. Quality Enhancement Policy Committee Update

Mr. Moynihan discussed the status of the In-Service Education paper. The committee had examined the difference between professional development and documented education. The committee was currently investigating the notion that many practitioners see continuing professional education (CPE) as a matter of compliance rather than professional development. The committee believed professional development was any activity that builds upon a professional’s skill set and knowledge base to assist in the practice of accountancy.

The committee had also examined what chartered accountants required in regards to CPE. A rough draft was submitted and would be fine tuned for the October QEPC meeting.

b. 2009 Leadership Conference Location

Mr. Moynihan reported that Mr. Schmelkin had spoken with Turning Stone and resolved various issues that Society guests faced at the 2008 leadership conference, including members not having access to sleeping rooms in a timely fashion. Based on the hotel’s representatives providing strong assurances to eliminate all such problems, the conference would proceed as originally scheduled at the Turning Stone Resort over the weekend of July 13, 2009.

a. Chapters Update

Chapter Vice Presidents Falbo and Dwyer had held a President’s conference call since the last board meeting. During the call, chapters stated they were unaware of the contract approval process. Mr. Pape stated additional means of sharing of information would be implemented such as a listserve. Mr. Falbo then went on to say PAC trustees needed to be more involved on chapter level.

Vice President Dwyer stated she had communicated enforcement of some of the recommendations of the audit committee to chapters. Ms. Dwyer held an executive meeting with the Mid-Hudson chapter to discuss issues regarding chapter functions and procedures. Chapters must be reminded that they are responsible to the Board. Ms. Dwyer also stated that chapters needed to institute smoother transitions from president to president.

b. Recent Society Comments

Ms. Wood stated that 18 comment letters had been issued thus far. Two were in the pipeline and more were expected by the end of September. IRS and FASB had been recipients of some of the comment letters thus far. Ms. Wood stated that the Society was on track to eclipse the total of 30 issued for all of fiscal year 2008.

c. Committees Update

Mr. Hendler stated that Tom Irvin, Chair of the Industry Division Oversight Committee, was looking for members for the Small Business Outreach Committee. The committee was currently made up of retired and semi-retired CPAs. Interested members should contact Mr. Irvin or Mr. Markezin.

Mr. Hendler also reported on plans for a committee open house in October. Committees were expected to invite both Society members who do not currently serve on a committee as well as non-society members, hoping to increase Society and committee membership. Advertisements to publicize this outreach would be included in The Trusted Professional and on the Society website.

a. Financial Statements for the Two Months Ended July 31, 2008

Mr. Piluso presented the financial statements for the two-month period ending July 31, 2008, and took questions from the Board.

b. Nominating Process Report

Mr. Piluso stated twelve people had submitted petitions to serve on the nominating committee. Nine would be elected by the membership through a balloting process that would be completed by October 2.

a. Regulatory Update

Mr. Grumet stated the State Education Department continued to support the mobility provisions in Assembly bill A.11696-A and Senate bill S.7497-B. He indicated as soon as the Senate Majority was determined, as a result of the November elections, the Society would begin to mount pressure to have the bill passed.

Mr. Grumet also reported that decreases in the budget and subsequently staff of the state board of accountancy were being discussed. He stated that the Society plans to protest the change due to the impact it would have on regulation of the profession.

b. Peer Review/Administration Update

The matter was deferred to a future meeting.

c. Dues Update

Mr. Grumet reported that eighty-eight percent of member dues had been collected and that this was on par with prior years.

d. Member Benefits

Mr. Grumet said the Society currently offered membership discounted insurance plans from the United States Insurance Company in the City of New York., a subsidiary of American International Group, Inc. (AIG). Mr. Grumet stated he contacted Pearl Insurance Group, the company that marketed and administered the insurance on behalf of the Society. Mr. Grumet stated that Pearl advised that in spite of current circumstances of AIG, the Society did not need to change insurance providers. Mr. Grumet said he agreed with Pearl and recommended that the society continue using United States Insurance Company.

e. CPA Journal “CPE on-the Go” Project

The matter was deferred to a future meeting.

f. Technology Upgrades

The matter was deferred to a future meeting.

g. Sales Tax Audit

The Board was referred to attachments in Board packet.

h. “Linked In” Task Force

The matter was deferred to a future meeting.

a. Report from FAE President

Ms. Cohen, President of FAE, stated that the job of FAE was to improve current CPAs and nurture future CPAs. The year ended May 31, 2008 had been a very successful year in terms of programming. FAE performed better than budget and stronger than the prior year. It required a smaller grant from the society than had been included in the operating budget as Education Expense. Three quarters of FAE’s CPE occurred during June, July and August, the end of the reporting cycle for New York State’s CPE year. FAE Trustees had just approved new POP prices for individuals and firms. Already ten percent of the prior year’s POP sales were sold the first week.

She continued and stated that the FAE curriculum committee was meeting to get programming ideas. Interested participants from the NYSSCPA Board were urged to inform Ms. Cohen or Mr. Schmelkin. She noted a new upcoming conference dealing with International Financial Reporting Standards. Ms. Cohen urged members to encourage staff to attend. Regarding student outreach, fundraising and development remain important with the upcoming 150-hour requirement on the horizon. The FAE Board was forming a fundraising committee for scholarships and other endowments.

b. Proposed Merger with Benevolent Fund

The matter was deferred to a future meeting.

Ms. Fierstein led the discussion of the proposed strategic plan. The Board provided input. The core purpose was changed. The revised purpose was changed to read: “To provide leadership and value to our members, the CPA profession and the public”. The core values were left unchanged. Each goal of the strategic plan was vetted and altered. In light of the Board’s discussion, Ms. Fierstein asked staff to redo the draft strategic plan with edited draft goals, as well as objectives and strategies to be presented at the next board meeting.

The Board then discussed the possible dissolution of the Brooklyn Chapter. President Fierstein stated that continuous efforts to revitalize the chapter by bringing in new members and new leadership had been unsuccessful. Attendance at chapter events reflected a large percentage of students, nonmembers and non-CPAs, but very few chapter CPA members. The chapter had needed to rely on the same volunteers to serve as officers for many years. During the resulting discussion, it was observed that the chapter’s members might be better served under a different chapter structure. Mr. Lifson proposed the following motion.

To better serve the NYSSCPA members in Brooklyn, the NYSSCPA Brooklyn Chapter is hereby realigned into the NYSSCPA Queens chapter effective December 31, 2008. The resulting chapter shall be known as the NYSSCPA Queens/Brooklyn Chapter. The Board understands that each member may designate his or her own chapter affiliation.

Ms. Dwyer seconded the motion, which after substantial discussion passed, with five members opposed.

a. Draft Audited Financial Statements for Year Ending May 31, 2008

Mr. Banerjee prefaced the discussion of the audit results by reviewing the financial highlights of fiscal year 2008. He noted that there were no adjusting entries as a result of the audit for fiscal year 2008 as had been the case during the previous three years; and hence the presentation was identical to the one given to the full Board at the July Annual Leadership Conference.

Mr. Banerjee noted some of the previous year’s financial highlights. Fiscal year 2008 represented the most successful year for FAE in recent memory. FAE needed $300 Thousand less than budget, or $419 Thousand in CPE Program Support from the Society to break even. In the preceding year, CPE Program Support totaled $483 Thousand. In addition, revenue from courses, the single biggest FAE revenue source was $177 Thousand better than budget and $178 Thousand better than fiscal year 2007. In fiscal year 2008, FAE received a total contribution from the Society of $1.06 Million. $483 Thousand was CPE Program Support for fiscal year 2008. The remaining balance of $577 Thousand represented a contribution to eliminate a structural deficit that had existed in the opening balance of the FAE Unrestricted Fund since fiscal year 2004. Fiscal year 2008 Consolidated Net Income of $229 Thousand decreased by $268 Thousand from the previous year. Society net income for fiscal year 2008 was $330K.

Michelle Mark Levine, Chair of the Audit Committee, then introduced representatives from Loeb & Troper, the Society’s auditors. Loeb & Troper was prepared to issue an unqualified opinion on the financial statements of New York State of Certified Public Accountant and consolidated entities as of May 31, 2008.

Auditors described staff as very responsive during the audit. The auditor indicated that there were no adjusting entries, but there was a need to reclassify some costs originally called “fundraising costs” as “special events”, noting that normally “fundraising costs” were associated with soliciting contributions, which was not the case in this instance.

He reminded the Committee that the Form 990 would be significantly changed for fiscal year 2009 and that the Society should undertake a number of actions in anticipation of those changes, including a review of its policies and preparation of some extensive narratives to accompany the form. The auditors stated they were very satisfied overall.

Areas of deficiency included the frequency of posting cash receipts and the need to develop one additional internal control for review of payroll. The auditors stated that there was an issue of sloppiness among the chapters and recommended a review of policies pertaining to the chapters.

The Board then entered into executive session for further discussion with the auditors and the FAE Trustees. No actions were taken during the executive session.

Michelle Levine recommended that the Board accept the audit report. Mr. Pryba moved to accept the audit report. Mr. Hotalen seconded the motion. The motion passed unanimously.

b. Appointment of Auditors

Ms. Levine recommended that Loeb and Troper be approved to conduct the NYSSCPA/FAE audit for fiscal year 2009. Mr. Belsky moved that Loeb and Troper be appointed to audit the 2008-2009 financials. Ms.Rahilly seconded the motion, passed unanimously.

Mr. Herman moved to issue the audited financial statements. Mr. Neumark seconded the motion. The motion passed unanimously.