03 – C – 00

Call to Order

03 – C – 1

Approval of Minutes of February 11, 2003 Meeting

Ms. Golden asked committee members if they had any corrections to the minutes of the February 11, 2003 Executive Committee Meeting. Mr. Grusd suggested that the sentence beginning "Mr. Pape noted that her recent letter . . . ", be corrected to "Mr. Pape noted that President Golden's recent letter . . . ".

Mr. Hoops moved to approve the minutes as corrected by Mr. Grusd. Mr. Aquilino seconded the motion. There being no objection, President Golden declared the minutes approved as corrected.

03 – C – 2

President’s Report

a. Legislative Update

This matter was discussed as part of item 03-C-9.

b. Peer Review and Ethics Task Force Update

Ms. Golden stated that she was in the process of finalizing the composition of the Peer Review and Ethics Task Force, which would be chaired by Brian Caswell. Thus far, Rona L. Cherno, Stephen F. Langowski, Sharon S. Fierstein and Henry J. Krostich had all agreed to serve, while several others had been approached.

The committee then briefly discussed whether a non-CPA public citizen should also be named to the task force. No action followed from the discussion.

c. Real Estate Task Force Update

Ms. Golden turned the floor over to Mr. Schmelkin, who briefed the committee regarding office space being considered for the Society's future location.

Mr. Schmelkin stated that most of the offices were within the area between Grand Central Terminal and Penn Station, and that several locations were convenient to nearby university/college properties, which might provide an option for FAE classroom usage.

d. Leadership Conference Update

Mr. Hoops reported that substantial progress was being made on the leadership conference, and he thanked former president Michael L. Borsuk and Alan Schmelkin for their efforts in this regard. He added that the agenda was in place for the conference, which was scheduled to commence on Sunday, July 13 at the Gideon Putnam Hotel and Conference Center in Saratoga, New York. Scheduled speakers include political consultant Michael Dunn and former SEC chief accountant Lynn Turner. There would also be sessions on grass-roots lobbying, improving the CPA's image and media relations. The boards of the Foundation for Accounting Education and the CPA PAC would also meet.

Mr. Hoops announced that several Society contingents had been invited to attend, including Young CPAs. He added that the conference would be open to other members at their own expense. Lastly, Mr. Hoops noted that the locale was a good place to bring spouses and children, and he encouraged all to attend.

e. AICPA Governance Task Force

Ms. Golden reported that the AICPA had set up a Task Force on the Role and Responsibilities of the AICPA Council. Mr. Hoops had been named to the Task Force.

Ms. Golden stated that although the task force was created following Council discussion of a motion put forward by the, its directive was not as broad as New York originally recommended, i.e., to comprehensively study all aspects of AICPA governance . She suggested that New York be vigilant in requesting that the task force expand its directive, and she opened the floor to further discussion of this suggestion.

Mr. Hoops reported that the first full meeting of the task force was scheduled for late March, during which the task force would look at how state societies chose their members of Council, in comparison with methods employed by other large associations. He suggested that New York allow the task force to commence its work and establish its direction before demanding an expanded mandate.

In response to a direct question, Mr. Hoops stated his desire that the task force examine the entire AICPA governance process, but acknowledged that this desire was broader than the task force's current charge, i.e., to study only the effectiveness of the AICPA Council. He added, however, that any task force member was free to raise any issues that they feel should be considered, including AICPA governance.

Mr. Nelson moved that Ms. Golden write a letter in her capacity as NYSSCPA President and AICPA Council member, commending the AICPA for its efforts in setting up the task force, but making it clear that New York members expect a broader task force mandate to include a thorough governance review. Mr. Riley seconded the motion.

During the discussion that followed, Ms. Golden agreed that such a letter was desirable, adding that New York members had a vested interest in the AICPA's success. Several members concurred in this sentiment.
Following discussion, the motion passed unanimously.

f. AICPA Specialty Accreditations

The committee discussed an issue raised in correspondence from Board member Peter Frank, regarding the AICPA's potential discontinuance of two credentials, the PFS (Personal Financial Specialist) and CITP (Certified Information Technology Professional). Mr. Frank, who holds a CITP, encouraged the Executive Committee to state a position with respect to maintaining the CITP credential.

The committee then discussed the usefulness and objectives of the CITP credential, which include promoting and recognizing CPAs as preferred information technology professionals, and enhancing the quality of IT services CPAs provide.

Mr. Hoops moved that President Golden write the AICPA to express the member's concern with the discontinuance of the credentials. Mr. Aquilino seconded the motion. There being no objection, the motion passed unanimously.

03 – C – 3

Executive Director Report

a. COAP Update

Mr. Grumet gave a brief update on the COAP program, noting that development of a Syracuse program was progressing well.

b. Legislative Consultant

Ms. Golden reminded the committee that the Board in November had agreed to seek out an outside legislative consultant to assist the Society in Albany. Subsequently, staff identified two consultants, engagement of which were presented for Executive Committee approval: 1) Philip Pinsky of Pinsky and Skandalis, Syracuse NY, for the Senate; and 2) Fred Jacobs of Hodgson Russ, Buffalo, NY, for the Assembly.

Mr. Grumet added that Andrew Roffe was affiliated with Philip Pinsky for lobbying in the Assembly, and would be included in the Society's retainer with Pinsky and Skandalis.

Mr. Aquilino moved that both firms be engaged, and Mr. Nelson seconded the motion. There being no objection, the motion passed unanimously.

03 - C – 4

Treasurer’s Report

a. Financial statements for period ending February 28, 2003

Mr. Aquilino presented the financial statements for the 9-month period through February 28, 2003. They showed combined total assets for the NYSSCPA and FAE of $4 million, total liabilities of $2.3 million and net assets of $1.7 million. Mr. Aquilino also drew committee attention to several items on the combined balance sheet.

Mr. Aquilino announced that revenue was $1.2 million higher this year than last year, reflecting an increase in three areas: first, significant cuts in personnel; second, the dues increase resulted in a $763,000 increase; and third, program fees for education had increased by $618,000 due to increased seminar and conference attendance.

Lastly, Mr. Aquilino reported that the Bank of New York would respond to the Investment Committee by the end of the week with a proposal to decrease the fees they currently charge for administering the Society's short term investment accounts.

03 – C – 5

Bylaws Task Force

Ms. Golden introduced Sharon S. Fierstein, Chair of the Bylaws Revision Task Force. Ms. Fierstein began by commending the work of task force members Brian A. Caswell, Sandra A. Napoleon-Hudson, P. Gerard Sokolski and Louis C. Grassi for their work on the Society's bylaws revisions.

After a brief summary of the task force's deliberative process, Ms. Fierstein directed the committee's attention to the March 6, 2003 transmittal memo of proposed bylaws revisions.

Ms. Fierstein discussed at length two new governance concepts introduced into the bylaws: Board Standing Rules and Nominating Committee Protocols. She also discussed recommended changes to the timing of the nominating process, nominating committee changes, and other miscellaneous changes.

Ms. Fierstein noted that the nominating process contained some inconsistencies because nominating committees tended to make up their own criteria. To improve consistency, the task force recommended the use of Board-approved protocols which the nominating committee would be required to honor. If the members approve the concept, a future Board would have the opportunity to establish protocols. The task force presented an initial draft to be considered at such time.

Regarding Board standing rules, she said the task force was suggesting this approach to handle issues such as assignment of vice presidents and the process used to designate Board members serving on the nominating committee. As with the nominating committee protocols, the bylaw changes would merely authorize the standing rules; specific rules would only be approved by the Board once the bylaw proposals were passed.
With regard to changes in the timing of the nominating process the two most significant proposed changes were (1) that the November members luncheon was being replaced with a fixed deadline for submitting petitions to serve on the nominating committee and (2) the process was being significantly extended to better accommodate holding elections when more than the prescribed number of members submit petitions to serve on the committee.

Other proposed changes to the nominating committee were the following:

• Increasing the nominating committee from nine to eleven, adding two members by petition.
• Limiting the number of terms a member could serve on the nominating committee to three. The task force suggested a transitional rule, however, which would permit members to serve three terms beginning this year.
• Permitting a member to sign only one petition.
• Expanding the Board members used to propose Board designees. At present, the President alone proposes the two Board designees to the Board. The task force suggested adoption of a standing rule that would create a selections subcommittee of the Board to make these proposals.
• Empowering the President to appoint the nominating committee chair. The current bylaws permit the nominating committee to appoint its own chair, which had resulted in the custom of having the most senior past president on the committee chair the committee.

In addition, the task force recommended the following miscellaneous changes to the bylaws (presented in order of appearance in the bylaws):

1. Clarifying that a CPA cannot qualify for associate membership Article I, paragraph 3(a)
2. Opening up student membership to all students interested in accounting rather than limiting student membership to accounting majors only. Article I, paragraph 3(a)(3)
3. Clarifying that a member may not be terminated for nonpayment of dues if he or she had a disciplinary proceeding pending. Article I, paragraph 6
4. Clarifying that if a person qualifies as a CPA candidate or student as well as some other associate member category (most likely CPA firm employee), the dues for a candidate or student would apply. Article II, paragraph3
5. Increasing the number of members needed to call a special meeting of members from 100 members to 5% of the voting membership, currently approximately 1,500 members. Article II, paragraph 3
6. Changing the notice requirement for special members from twenty to five days to comport with N-PCL § 603.
7. Increasing the time to send out a mail canvass and the time to return the canvass to facilitate use of the Trusted Professional to distribute the canvass. Article IV, paragraph3
8. Imposing the same requirements to serve on the Board as presently applies for service on the nominating committee and clarifying that service on a chapter executive board was the equivalent of service on a Society committee. Article VI, paragraph 1 and Article IX, paragraph 2
9. Clarifying the role of the Board. Article 6, paragraph 4
10. Changing the make-up of the Executive Committee by (a) requiring that all officers (including Vice Presidents) be included on the Executive Committee and (b) limiting the size of the committee to eleven voting members plus the Exec-utive Director (who may not vote). Article VII, paragraph 1
11. Adding to the exclusions from the authority of the Executive Committee:

• The ability to make nominating committee protocols.
• The ability to make Board standing rules (The Executive Committee remains free to make standing rules governing the conduct of Executive Committee business in Article VII, paragraph 4)
• The ability to hire, fire, or discipline the Executive Director.
  Article VII, paragraph2

12. Reducing the number of Vice presidents from four to three. Article VIII, paragraph 1
13. Limiting the tenure of the secretary to one year. Article VIII, paragraph 1
14. Permitting the treasurer a maximum of two, one-year terms. Article VIII, paragraph 1
15. Modernizing the defined role of the president, clarifying that the president was not the CEO. Article VIII, paragraph 3
16. Modernizing the defined role of the treasurer, clarifying that the treasurer did not have executive charge of the finances and investments of the Society, but requiring that the treasurer should serve as the chair of the finance committee. Article VIII, paragraph 10
17. Adding a definition of the Executive Director, specifying that he or she was to be the chief executive officer and specifying a number of functions to be carried out under the direction of the board. Article VIII, paragraph 12
18. Deleting reference to the "Chairperson's Manual" and the "Scope of Activities of Committees". Article XI, paragraph 5
19. Updating the authority of committees and members to issue statements in the name of the Society. Article XI, paragraph 5
20. Incorporating into the bylaws an action taken by the Executive Committee in 2000 regarding the professional ethics committee's authority when the State Education Department partially suspends a member's license. See Attachment E. Article XII, paragraph 3
21. Incorporating the professional ethics committee's recommendation regarding disclosure of certain information to regulatory authorities. Article XII, paragraph 16
22. Deleting the conflict of interest paragraph, which reflected obsolete law? Former Article XV, paragraph 4

In addition, a number of minor corrections and grammatical and stylistic changes were being proposed throughout the bylaws.

The Executive Committee discussed a number of the proposals at length including the definition of the executive director, the size of the executive committee, the number of members needed to call a special election, the role of the secretary, the transition rule for the nominating committee service limitation, the Board Standing Rules and the Nominating Committee Protocols. Following the discussion, the Executive Committee believed the final proposals to be approved by the Board should contain three changes.
Mr. Nowicki then moved that the task force report be approved, subject to the task force's review and change of the following three items:

• The bylaws should specify that the Secretary should continue to be allowed to serve for two years and should be assigned to chair the Committee on Committee Operations.
• The maximum size of the Executive Committee should be thirteen voting members not eleven.
• The number of members required to call a special meeting should be reduced in the proposals from 5% to 2%.

He further moved that if the task force failed to agree with one or more of the changes, the report should still be recommended for approval by the full Board at its April 23 meeting, but the Board should be asked to also deliberate changes requested by the Executive Committee and not approved by the task force. Ms. Doran seconded the motion. There being no objection, the motion passed unanimously. Mr. Love did not participate in the vote.

Mr. Woehlke then summarized the timing and process by which the bylaws changes would go forward. He noted that if the Board approves the changes at its April meeting, there would be 90 days to get ballots out to members. He added that many of the revisions would not affect the 2003-2004 presidency, but the Board could choose to adopt Standing Rules and Nominating Committee Protocols during Mr. Hoops' presidency.

03 – C – 6

Resolution for AICPA Council Meeting

This matter was deferred.

03 – C – 7

Membership Report

Mr. Pape presented the Membership Report, which included 139 new members (including 97 new associate members), 263 reinstatements, 16 deaths, and 1 resignation. These changes reflect a total membership of 29,220 as of March 11, 2003.

Mr. Pape noted that the Society was ahead of last year in terms of recruitment and that students were now the largest non-CPA membership category.

Mr. Riley moved to approve the Membership Report, and Ms. Lapidus seconded the motion. There being no objection, the motion passed unanimously.

Mr. Langowski suggested taking a survey of students to ask about what encourages them to pursue accounting as a career. He suggested that such a survey might assist the Society in furthering its marketing objectives towards students. Mr. Pape responded staff was contacting student members to gather this type of information.

03 – C – 08

Approval of Affinity Agreement

03 – C – 09

Position on Attorney General Spitzer's Legislative Proposal