Brian Caswell*
Mark Mycio*

* participated by phone

03 – K – 0
Call to Order

03 – K – 1
Minutes

Mr. Hoops asked Executive Committee members if they had any changes to the minutes of the October 15, 2003, meeting. There being none, Mr. Grusd moved to approve the minutes, and Mr. Bloom seconded the motion. The motion passed unanimously. Ms. Kirby and Mr. Jones did not participate in the vote.

Mr. Hoops then asked if there were any changes to the minutes of the November 18, 2003 special meeting. There being none, Mr. Bloom moved to approve the minutes, and Mr. Piluso seconded the motion. The motion passed unanimously. Ms. Kirby and Mr. Jones did not participate in the vote.

03 – K – 2
President’s Report

a. Meeting with State Bar

Mr. Hoops reported on a meeting which he and Mr. Grumet attended with their respective counterparts of the New York State Bar Association. Among the items discussed were legislation, the administration of their respective organizations, and the possibility of cross-qualifying CPE and CLE credits for both CPAs and attorneys. The four agreed to meet periodically.

b. COAP Fundraising Update

Mr. Hoops gave a report on the formation of a COAP Fundraising Committee, which would be chaired by Frank Fusaro. Mr. Grumet added that there were presently plans for seven COAP programs in for 2004 and recently the Society had been approached by an additional school in Dutchess County.

c. Officers’ Visitations

President Hoops reported that all but one of the officers’ visitations had been completed, the last one scheduled in January for the Nassau Chapter.

d. Real Estate Task Force

Messrs. Grumet and Schmelkin reported that the lease for the Society’s future offices at 3 Park Avenue was expected to be signed shortly. Mr. Grumet announced that, as a result of relocation financing negotiations, management had decided per the Board’s authorization in July to move the Society’s banking accounts from the Bank of New York to Fleet Bank.

e. Status of Benevolent Fund Proposal

Mr. Woehlke gave an update on the Benevolent Fund. He noted that neither the FAE Board of Trustees nor the Benevolent Fund Board of Directors appeared comfortable with the proposals to combine their charitable assets. The committees were, however, in favor of shifting the focus of the Benevolent Fund to scholarships, and were looking at different proposals. The committee then discussed the FAE Scholarship Committee’s criteria used for granting scholarships. Several suggestions were made to potentially improve these criteria.

f. Officers’ Job Descriptions

After a discussion, the Executive Committee agreed by consensus to develop functional job descriptions for directors and officers of the Society and that staff should prepare drafts for further consideration.

Report of Peer Review and Ethics Task Force

Former Society President Brian Caswell reported on recommendations of the Task Force on Quality Control and Ethics, which he chaired, and President-elect Kearney summarized membership comments to the recommendations which had been solicited by e-mail.

a. Financial Statements as of November 30, 2003

Mr. Bloom presented the Treasurer’s Report, noting that combined NYSSCPA and FAE income for the period ending November 30, 2003 was $605,000. Net income is ahead of budget by $458,000. Cash and equivalents stood at $3.8M as opposed to $2.8M in the previous year.

b. Update on Internal Controls Study

Mr. Bloom reported that RFPs for the Society’s internal controls audit engagement had been sent to 25 firms. The Finance Committee would be evaluating any responses at its January 21, 2004 meeting.

c. Report on Investment Committee

Mr. Bloom reported that three firms, Sanford Bernstein, The Bank of New York, and Merrill Lynch, gave presentations to the Finance Committee. Sanford Bernstein gave a report on the results of the investments they hold (FAE scholarship and the moving fund). The Bank of New York discussed currently-held investments as well as an investment vehicle that, although slightly more risky, might boost the income from excess cash. Merrill Lynch reported on the funds they have and suggested that the Society consider them for a larger stewardship role.

a. Report on Chapters

Vice Presidents Napoleon-Hudson and Nowicki each gave a brief report on Chapters. Ms. Napoleon-Hudson communicated some difficulty in reaching certain Chapter-elected representatives, and added that efforts to do so via Board member Chapter representatives were unsuccessful. Ms. Napoleon-Hudson agreed to communicate those representatives’ names to Messrs. Hoops and Kearney for additional follow-up.

b. Legislative Update

Vice President Love gave an update on legislation and reported on several meetings held at the state level, including the State Education Department, regarding issues in the Society’s sponsored legislation.

c. Recent Society Comments

Vice President Rubin commended several committees and authors for their work on issuing Society comments as follows:

• Comments submitted to the PCAOB by the NYSSCPA Auditing Standards and Procedures Committee, chaired by Margaret Wood, on Proposed Technical Amendments to Interim Standards Rules, PCAOB Release No. 2003-022, PCAOB Rulemaking Docket Matter No. 011, dated December 2, 2003; Robert Waxman, Margaret Wood, principal drafters.
• Comments submitted to the PCAOB by the NYSSCPA Auditing Standards and Procedures Committee, chaired by Margaret Wood, on Proposed Auditing Standard – References in the Auditors’ Reports to the Standards of the Public Company Accounting Oversight Board, PCAOB Release No. 2003-021, PCAOB Rulemaking Docket Matter No. 010, dated December 2, 2003; Robert Waxman, Margaret Wood, principal drafters.
• Comments submitted to the PCAOB by the NYSSCPA Auditing Standards and Procedures Committee, chaired by Margaret Wood, on Proposed Auditing Standard – An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements, PCAOB Release No. 2003-017, PCAOB Rulemaking Docket Matter No. 008, dated November 21, 2003; Fred Goldstein, Mary-Jo Kranacher, Mark Mycio, Bruce Nearon, Yigal Rechtman, Thomas Sorrentino, Barry Wexler, Margaret Wood, principal drafters.
  

a. Membership Recruitment

Mr. Pape reported on membership recruitment, noting that the Society recruited 1,567 new members halfway through this fiscal year, as compared to 1,676 for the entire fiscal year previous.

Mr. Pape then reported that the New York State Education Department was amenable to allowing the FAE to reach out to newly-licensed CPAs to inform them of CPE opportunities. A contract to facilitate this initiative was pending review. Lastly, Mr. Pape announced that the Society was conducting informational visits to firms to meet with their newly-hired CPAs regarding the value of Society membership. Ernst & Young was the largest firm visited.

b. Compliance with Society Policies

Mr. Woehlke reported on compliance with a Society policy concerning conflicts of interest, providing statistics on the number of staff and leaders who had submitted completed Conflict of Interest forms.

c. Medical Insurance Employee Benefit

Ms. Chambers reported on renewal options for the Society staff’s health insurance plan with Health Net, Inc.

Mr. Grumet expressed concern that the $250 hospital co-payment under one of the renewal options might be too substantial a financial burden on some of the Society’s lower wage employees. Several Executive Committee members agreed.

Mr. Piluso then moved to renew the coverage under Health Net, Inc. with its current features, while raising the co-pay for physicians’ visits and prescriptions each by $5. Mr. Love seconded the motion. The motion passed unanimously.

d. PAC Update

Mr. Grumet gave an update on the Political Action Committee.

e. Dues Update

Mr. Grumet announced that 94% of membership dues had been received, which is about 3 months ahead of last year’s pace.

f. Joint Ethics Enforcement with the AICPA

Mr. O’Leary reported on the Joint Ethics Enforcement Program with the AICPA (JEEP) and recent changes to AICPA’s bylaws concerning ethics enforcement. He noted that a review of the Society’s bylaws was needed to determine the effects of AICPA’s bylaws changes on the Society’s participation in JEEP.

g. Update on Dan Dustin Letter on Ethics CPE

Mr. Grumet reported on efforts to resolve issues regarding the Society’s Ethics CPE programs and state guidelines. He noted that the Society had requested a letter from Daniel J. Dustin, Executive Secretary of the New York State Board for Public Accountancy, clarifying the issues, but had not yet received such a letter.

h. Report from COCO re: Furtherance Committee

Mr. Grumet gave an update on efforts by the Furtherance Committee to report directly to the Executive Committee, instead of to Future of the Professions Oversight Committee as had been determined by the Committee Operations Committee.

Mr. Rubin reported on a task force to recommend nominees for the PCAOB Standing Advisory Group. Upon a motion made by Mr. Bloom, and seconded by Mr. Riley, the Executive Committee unanimously approved a motion, accept as noted below, to (1) accept the task force’s recommendations of the following individuals:

Auditor

Helen Bachman
Robert Berliner
John O’Leary
Nancy Newman-Limata
Arthur Radin
William Stocker

Preparer

[no names submitted]

User

Leon Metzger
William Aiken

Public

Dan Goldwasser
Robert Israeloff
Philip Laskawy
Vincent Love
Frank Nusspickle
Robert Waxman

(2) add William Aiken to the list as a User, while removing Dan Goldwasser’s name at his request and (3) direct staff to ascertain whether the named individuals would be willing to serve before submitting their names to the PCAOB. Mr. Love did not participate in the discussion or the vote.

The Executive Committee approved the membership report which included 262 new members (including 178 new associate members), 125 reinstatements, 6 deaths and 4 resignations. These changes reflected a total membership of 29,339 as compared with 28,519 at the same time as the previous year.

Mr. Riley moved to accept the membership report, and Mr. Love seconded the motion. The motion passed unanimously.