Minutes

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Call to Order Ms. Newman-Limata noted that a quorum was present and called the meeting to order at 9:10 a.m.

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Minutes of the June 10, 2001, Meeting Ms. Newman-Limata asked if there were any corrections to the draft June 10, 2001 meeting minutes. There being none, she declared the minutes approved as written.

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President's Report a. Society's Response to Disaster
Ms. Newman-Limata informed the board that there would be an informational meeting on Friday September 28 for CPAs volunteering to help victims of the Sept. 11 disaster.

Ms. Newman-Limata encouraged NYSSCPA members to donate to the Benevolent Fund; she personally made a contribution to the fund and believed all Board members should contribute to show the Board's support of fellow CPAs.

A question from the Board was whether the Society has partnered with any other organizations. Mr. Grumet said the Society intended to pursue partnerships only after Friday's meeting, during which the skill sets of volunteers would be assessed.

b. Strategic Planning Task Force

Ms. Newman-Limata informed the Board that the Strategic Planning Task Force meeting scheduled for Sept. 11 was cancelled, but that a second meeting is planned in October and another is planned before the December 3 - 4 meeting.

The Society expects to have Glenn Tecker, an expert in strategic planning, attend the meeting. Both Mr. Grumet and Ms. Newman-Limata have attended an ASAE-sponsored session led by Mr. Tecker, who has worked with other CPA associations.

Mr. Grumet expects to bring concrete results from the task force to the Board. Pointing to results from the first Strategic Planning Task Force meeting and input from the FAE Trustees and Finance Committee meetings, not all views yet concur.

c. Office Relocation Task Force

The Office Relocation Task Force, chaired by former NYSSCPA president Steven Baum, planned to meet on Nov. 1. The task force's consideration of the amount of space needed will depend upon, among other things, whether the Society plans to provide centralized, state-wide CPE and whether it will provide conferences in-house rather than at hotels.

d. Update on Global Credential Chapter Visits

Overall, Ms. Newman-Limata reported on visits to various chapter meetings to discuss the pros and cons of the global credential. At a number of locations, AICPA representatives made presentations. Ms. Newman-Limata said all questions tended to challenge the entire concept.
At their invitation, Ms. Newman-Limata had also visited the Rhode Island state society, where CPAs also challenged the need and validity of this credential and the potential waste of AICPA dues.

e. Relations with the State Board

Ms. Newman-Limata updated the Board on relations with the State Board for Public Accountancy (SBPA). An initial invitation for a dinner meeting of the two boards was declined by the SBPA out of a stated concern about compliance with the New York open meetings law. Instead, Ms. Newman-Limata and the president-elect agreed to meet with the SBPA chair and vice chair following the next SBPA meeting.

Mr. Grumet noted that the statute governing the composition of the SBPA requires that it include five public accountants, yet the State Board has none. He also noted that the SBPA currently has no representation from minorities, none from the Big Five, and little representation from upstate.

Mr. Grumet suggested calling Chancellor Hayden to discuss the composition of the SBPA. In addition, he suggested that a meeting be sought with the Professions Committee of the Board of Regents. By consensus, the Board agreed with this approach.

f. Benevolent Fund

Ms. Newman-Limata mentioned that the Benevolent Fund was processing two applications for assistance. She also noted that the Benevolent Fund directors had approved an approach to grant expedited no-interest loans of up to $2,500 to members and their families affected by the September 11 attack.

g. Chapter Visitation and Chapter Activities

Ms. Newman-Limata began by introducing Mr. David Evangelista, the new chapter president of the Rockland County Chapter, mentioning that the Rockland Chapter's social event the night before had a commendable turnout of 30 people. Mr. Edward Torres, Board member and president of the Queens Chapter, was also introduced.

Ms. Newman-Limata mentioned that the Manhattan/Bronx Chapter's inaugural affair was a successful mayoral debate.

The Central Southern Tier chapter meeting the week before included 33 people out of 120 CPAs in the region.

Ms. Newman-Limata also updated the Board on the first of the two-hour ethics presentations by Camico that were accompanying the chapter visitations.

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Executive Director's Report a. Insurance Update

Mr. Grumet noted that Mr. Louis Grassi, who had been designated the NYSSCPA representative to the Camico board, had withdrawn from such representation. Mr. Grumet further noted that he had discussed the situation with Vice-President William Hatfield, who had consented to serve in such capacity. Mr. Nelson moved and Ms. Lapidus seconded to designate Mr. Hatfield as the NYSSCPA representative to the Camico board. Following discussion, the motion was unanimously approved.

b. UAA Update

Mr. Grumet said the state legislature is currently focusing its efforts on the World Trade Center relief. If the legislature returns to address other matters, Mr. McCoy will report on the UAA proposal at a subsequent meeting.

Mr. McCoy briefed the Board on his meeting with representatives of the National Conference of CPA Practitioners, (NCCPAP), which might be open to compromise on provisions in the UAA bill. The primary NCCPAP issue identified by Mr. McCoy was nonCPA ownership of CPA firms. They indicated they could not support any nonCPA ownership, though a possible compromise identified by Mr. McCoy was retaining the current profits-share approach and extending the percentage allowed from 35% to 50%. A second major NCCPAP issue was the liberalizing of the experience requirement to permit licensure after just one-year of experience under the supervision of a CPA. Nevertheless, Mr. McCoy said NCCPAP may now have accepted that UAA provision. NCCPAP joins the NYSSCPA in opposition to non-licensed CPAs issuing reports.

Mr. McCoy summarized the meeting by saying both organizations had a good discussion.

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Treasurer's Report a. Financial Statements for the three months ending August 31, 2001.

Mr. Aquilino, the Treasurer, and Mr. David A. Lifson, Chair of the Finance Committee, reported on the financial statements for the first quarter. Mr. Lifson said the Society is slightly ahead of budget on an overall basis and roughly the same as last year in terms of performance.

Major issues in the financial statements that the Finance Committee has been debating centered around large receivables from FAE, showing significant variances from the preceding year. Mr. Lifson indicated that this was not alarming because it arose from the consolidation of FAE and NYSSCPA payrolls.

Mr. Lifson noted that the financial statements included a reserve, as per the budget approved by the Board, for the moving of the Society's offices when the current lease terminates in 2004.

b. Investment Committee

Mr. Lifson reminded the board of an action taken by the Executive Committee on February 13, 2001, to create an investment subcommittee of the Finance Committee. Mr. Lifson reported that the Finance Committee is evaluating the action and believes the Society's investment record is part of the scope of activities of the Finance Committee. He asked that the February 13 action be modified to enable the Finance Committee itself to monitor the Society's investments. Mr. Aquilino so moved. Mr. Federamnn seconded. Following discussion, the resolution was approved.
The Finance Committee is setting up a committee action plan (CAP), similar to the one developed by COCO, under which the Finance Committee would be divided into two functions: 1) investment of Society assets in short and long term investment issues; and 2) investment of Society assets in short, medium, long term borrowing issues.

Mr. Hatfield asked how many Society chapters are currently using QuickBooks. Ms. Chambers said that four chapters had responded. Two chapters had been set up on QuickBooks as of that date and two would be set up by week's end.

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Report of the Audit Committee The Board was then joined by Allen Fetterman, chair of the Audit Committee, and D. Edward Martin, Julie Floch, and Lynda Feldman from the firm of Richard A. Eisner & Co., the current auditors of the Society. Mr. Fetterman noted that for the first time, the financial information of the Political Action Committee was being consolidated with the Society and FAE financial information.

After a detailed discussion of the consolidated financial statements and the auditors' management letter, Ms. Sabba-Fierstein moved to accept the auditor's statement, which was seconded by Mr. Bloom. The Board unanimously approved the motion.
On the recommendation of the Audit Committee, Mr. Sokolski moved and Mr. Nowicki seconded that the auditing firm of Richard A. Eisner & Company be reappointed as auditor for the current fiscal year. The Board unanimously approved the motion.

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Global Credential The Board entered into an extensive discussion regarding what action it should take regarding the global credential. Mr. Berlant made the following resolution which was seconded by Mr. Bloom:

WHEREAS, in May 2001, AICPA Council authorized a membership vote on the issue of amending the AICPA bylaws to enable the AICPA to work with an affiliated entity to offer a broad-based, global business credential (Global Credential) with the ballots to be mailed out shortly after the October Council meeting; and

WHEREAS, we are opposed to the Global Credential for the following reasons:
· The AICPA charter does not provide for the establishment of a separate credential.
· The Global Credential is unnecessary because CPAs are already providing numerous nontraditional services, especially strategic planning services, to the public and have already gained market permission to offer these services. In other words, despite the AICPA's research, the CPA designation has already proven to be sufficiently "stretchable" to offer these services both domestically and internationally.
· The Global Credential will empower millions of nonCPAs to compete with CPAs in offering nonattest services.
· The debate about the Global Credential is divisive to the profession as a whole and, furthermore, will diminish the public's perception of the breadth of services offered by CPAs.
· The Institutes of Chartered Accountants in the United Kingdom (England, Wales, and Scotland) and Ireland, which were among the first to explore the credential with the AICPA, have now rejected it, and are exclusively advancing the Chartered Accountant credential. Consequently, this credential cannot be a truly "global" credential.
· Although the Global Credential proposal was developed in part to address the problem of recruiting students to the profession, we are convinced the credential fails to recognize the source of the problem, which is the disconnect between what CPA candidates are taught, what they are tested on, and what is the reality of CPA practice in the marketplace today.

NOW, THEREFORE, BE IT RESOLVED that the AICPA should channel financial and creative resources into educating the marketplace about the capabilities, quality, and diversity of CPA services; and

RESOLVED, FURTHER, that the NYSSCPA Board of Directors urges those members of the AICPA Council nominated by the NYSSCPA to oppose any attempt to rescind the authorization for the membership vote or to delay the conduct of such vote.

RESOLVED, FURTHER, that the NYSSCPA Board of Directors urges those members of the AICPA Council nominated by the NYSSCPA to introduce a motion in Council that will require the AICPA to engage an independent firm to tabulate and report on the membership vote, as is done by many similar organizations.

RESOLVED, FURTHER, that the NYSSCPA Board of Directors urges those members of the AICPA Council nominated by the NYSSCPA to introduce a motion to require the AICPA to engage a state society that has formally opposed the Global Credential to draft opposition arguments presented on the membership ballot.

The resolution was discussed at great length and ultimately passed unanimously.
Ms. Golden, who sits on the global credential survey task force, detailed her observations that the global credential surveys tended to be pro-global credential and supported the AICPA's position. However, Ms. Golden noted that she believes that overall the process was fair.
Further discussions included whether it would be prudent to act in very negative manner in Council and what NYSSCPA as a state society could do for its sister state societies. The consensus of the Board was that it would be inappropriate directly to lobby other state societies and their members, but that the presidents of other state societies should be shown what information New York has given to its own membership.

The Board also decided to direct staff to send a postcard to every NYSSCPA member urging them to vote "no". The Board's position should also be prominently covered in an upcoming issue of The Trusted Professional. The Board also discussed contacting the managing partners of larger New York firms to suggest that they tell their CPA staff to vote no on the issue as well.

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Leadership Conference Venues Ms. Golden provided the Board with an update on the Leadership Conference Venues.

The Society was unable to change the venue for 2002 from The Mohegan Sun in Connecticut to Saratoga Springs, N.Y., but reserved the latter location for 2003. The 2002 Conference was also moved to July 12-16.

The Board then discussed inviting the government relations directors (GRDs) to the next conference. By consensus, the Board decided to postpone this discussion until the next Board meeting
Mr. Linder moved, and Mr. Novak seconded, a motion to ratify the choice of Saratoga Springs, N.Y. for the 2002 leadership conference and the change of the dates of the 2001 leadership conference to July 12-16. The motion carried unanimously.

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AICPA Advertising Campaign
Ms. Newman-Limata briefed the Board on a luncheon meeting she had with Barry Melancon, AICPA President, to discuss joint advertising and promotion efforts. Mr. Melancon proposed NYSSCPA help fund the AICPA's advertising campaign.

The Board took issue with allowing the AICPA to control the advertising campaign without adequate Society input. The Board proposed considering cooperative advertising, but under Society control or with established protocols.

By consensus, the Board directed that the Society begin an immediate advertising campaign targeted at New York college newspapers. The Board would also consider providing $100,000 as part of budget for joint advertising campaign with the AICPA for next year's budget.

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Membership Report William Pape, the associate director of member services, briefed the Board on the latest member report. Mr. Pape said about 4,000 members to date have not paid their dues.
Mr. Pape informed the Board of plans to involve chapters more in membership activities. He proposed developing membership teams, so chapters can contact overdue members. The chapters would also send welcome letters to new members.

Mr. Pape also presented the membership report, which included 109 new members, 48 reinstatements, 31 resignations, 1 termination, and 25 deaths. In addition, there was a reduction due to an administrative adjustment of 8. These changes reflected a total membership of 29,914 as of September 25, 2001. Mr. Linder moved that the Membership report be accepted and Mr. Novak seconded the motion. Following discussion, the Board unanimously approved the motion.

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St. Lawrence County Chapter Status Mr. Grumet told the Board that of the 34 members in St. Lawrence County, all but two said they wished to transfer their membership affiliation from the Syracuse chapter to the Adirondack chapter.

Mr. Linder made a motion to approve the transfer of St. Lawrence County from the Syracuse chapter to the Adirondack chapter. Mr. Novak seconded. The Board unanimously approved the motion.

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Designation of Nominating Committee Members from the Board As set forth in the bylaws, two Board members need to be designated to serve on the 2002 Nominating Committee.

Ms. Newman-Limata recommended that the Board designate Sandra Napoleon-Hudson and Raymond Nowicki to serve on the 2002 Nominating Committee. Mr. Frank so moved, and Mr. Bloom seconded the motion. The Board unanimously approved the motion.

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Draft NYSSCPA/FAE Affiliation Agreement Mr. Woehlke, society counsel, briefed the Board on the desirability of an affiliation agreement between two related nonprofit organizations, such as the Society and FAE, when they share facilities and other expenses. He recommended that the Society execute such an agreement with FAE. Mr. Hatfield indicated that it was premature for the Board to take action when it has not yet had committee review, and FAE has not had discussions either. Mr. Hatfield recommended that the draft should be tabled until the December meeting.

Mr. Grumet said the draft will be on the next Board meeting agenda and withdrew the draft from consideration.

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Hall of Fame Former Society President Alan E. Weiner joined the board for a discussion of changes to the Hall of Fame proposed by the Executive Committee. Under the proposal, Hall of Fame nominations were to be made by a newly reconfigured Awards Committee. The size of the Awards Committee would be increased from 5 members to 13.

Also, the proposal would relax the requirement that 5 or fewer members be elected to the Hall of Fame, allowing any number of nominees to be elected.

Following discussion, the Board approved a motion, made by Ms. Golden and seconded by Ms. Barnickel, to amend the proposal, by (1) requiring that all Awards Committee members serve for only one year, except for the five oversight committee chairs and (2) reinstating the 25-year career requirement, but only requiring that 10 of those years be in New York.

Thereafter, Ms. Golden made, and Ms. Barnickel seconded, a motion that the Board accept the main motion as amended. The motion passed with only Mr. Sokolski abstaining from the vote.

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Change of Registration Agent Mr. Woehlke, informed the Board that the Society is serving as its own registered agent, and recommended that instead a professional registered agent be chosen.

Ms. Sabba-Fierstein made the following resolution:
RESOLVED, that the designation of registered agent in New York, on whom all process against the Society may be served be changed from the New York State Society of Certified Public Accountants, 355 Lexington Avenue, New York, NY 10017 to C T CORPORATION SYSTEM, 111 Eighth Avenue, New York, NY 10011.

Ms. Lapidus seconded the motion, which, after discussion, was unanimously approved.

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Phase II of SSNI By consensus, the Board tabled any discussion and action on Phase II of the SSNI/SSLLC/CPA2Biz venture until the next Board meeting.

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FAE Report Mr. Sokolski briefed the Board on the actions of the FAE Trustees, and the intent of the trustees to take a more proactive role in FAE business. During the FAE Trustees' last meeting, the Trustees came to an agreement to provide education to the NYSSCPA members, even if FAE runs at a deficit. Professional education should be viewed as a service to the members.

FAE's original projected budget deficit for the year ended May 31, 2002, is $375,000. Mr. Grumet informed the Board that FAE will present a unified program budget with the Society.

FAE and the Society are also discussing with the chapter leadership what the chapters really want in terms of education. The Board agreed by consensus to table further discussion on FAE until the strategic planning discussion in December to allow the Society and Ms. Newman-Limata to talk to chapter members and representatives about FAE and CPE.

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Adjournment Ms. Newman-Limata asked if there was any further business to come before the meeting. There being none, Mr. Zollo moved, and Mr. Nowicki seconded, a motion to adjourn. The meeting adjourned at 2:05 p.m.

Respectfully submitted,

Sharon S. Fierstein
Secretary