| Mr.
Falbo introduced the revised budget and noted that staff
had reviewed all programs and services and the revised
budget reduced the initial budget deficit (presented
to the Executive Committee at the February 9, 2010 meeting)
from approximately $1.1 million to approximately $319K.
He added that the new budget includes a 3% dues increase
that he had asked the staff to include, assumes a flat
membership base, includes additional FAE revenue, and
a reduction of expenses. In addition staff had identified
additional cuts not included in the draft budget that
the Executive Committee could consider as well. He explained
that nothing was left off the table in the revised budget
discussions. Mr. Falbo asked that the committee decide
first on the budget before a discussion on cash flow.
Ms. Barry presented the revised budget and broke the presentation
into three components. The first included reduction of
expenses including reducing The Trusted Professional by
two issues, eliminating Aptify and other professional development
training, delaying the implementation of VOIP technology,
and amending the staff education policy. Next she discussed
that two corrections had been made to the initial budget
regarding a miscalculation of 401K employer contributions
and an adjustment to chapters. Thirdly, revenue was increased
to reflect the 3% membership dues increase and an increase
in the FAE registration fees. She indicated that this had
been approved by the FAE Trustees. She also explained other
potential cuts that could be considered that were not incorporated
into the budget and several other programs that were not
factored in because they had a negative or neutral impact
on the budget.
The committee discussed a concern about not taking a 3%
reduction into consideration for the membership base, since
that would reflect the trend of recent years. Mr. Payano
explained that the amount reflected in doubtful accounts
addresses this issue to some extent. It was also noted
that the 3% dues increase makes up to a large extent for
the 3% loss in base. Also discussed was a missed opportunity
in retrospect to recruit members at the sessions on the
new law. A new program should reach out to these CPAs going
forward. Membership recruitment was discussed and it was
emphasized that membership roots grow at the chapter levels
and that we need to provide certain chapters with more
support to develop successful programs in this regard.
Mr.
Falbo next discussed cash flow as it pertains to the
remaining current fiscal 2010 year. A discussion ensued
on the current options of addressing the cash flow needs.
The cash flow as it pertains to the 2011 budget was also
discussed. It was brought to the committee’s attention
that the Society had a practice of using a portion of
the following year’s revenue for the current year’s
expenses. For example, a portion of the 2011 dues received
during April and May of 2010 would be used to supplement
cash flow for the year ending 2010. Mr. Falbo suggested
that the continuation of this practice should be reviewed
and possibly adjusted going forward to reduce the inter-year
cash flow dependency. A member of the committee suggested
that we should stop putting funds into the reserve fund
for the upcoming fiscal year as a way to reduce the projected
$900,000 cash flow deficit for year ending May 31, 2010.
It was noted that Aptify was paid out of operating expenses
and that the reserve fund was not touched for this expense.
The committee asked that staff look into the current lease
situation for financial planning purposes.
Mr. Falbo thanked Mr. Payano for the excellent job he
had done in providing the leadership with the financial
information that it needed. Several other members thanked
Mr. Payano and Ms. Barry for the comprehensive and transparent
manner in which the budget was presented.
A motion was made by Mr. Herman and seconded by Mr. Lesser
to recommend to the Board of Directors that they consider
approving the FY 2010-11 budget as proposed with the reinstatement
of tuition reimbursement for staff currently in the program.
The motion passed unanimously. The committee subsequently
noted that the tuition reimbursement program will be suspended
for employees not currently matriculating and its reinstatement
and or revisions to the policy should be discussed by a
future Executive Committee.
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