Minutes of:

Executive Committee Meeting

Date & Time:

Thursday, May 9, 2002, 9:10 a.m. to 1:30 p.m.

Location:

NYSSCPA Offices, 530 Fifth Avenue

Presiding Officer:

Nancy Newman-Limata, President

Executive Committee Members Present:

Jo Ann Golden, President-Elect
Kevin J. McCoy, Vice President
Frank J. Aquilino, Treasurer
Sharon Sabba Fierstein, Secretary
Arthur Bloom

Peter H. Frank
Ian M. Nelson
Stephen F. Langowski
Carol C. Lapidus
Louis Grumet, Executive Director

Executive Committee Member Absent:

G. William Hatfield, Vice President

Staff Present:

Joanne S. Barry
Lynn Chambers
Robert H. Colson
Ernest J. Markezin
Dennis M. O’Leary

William Pape
Alan Schmelkin
Paul L. Sinegal
James A. Woehlke

02 – G – 00

Call to Order

Ms. Newman-Limata called the meeting to order at 9:10 a.m.

02 – G – 01

Minutes

Ms. Newman-Limata asked committee members if they had any changes to the minutes of the March 5, 2002 Executive Committee meeting. There being none, she declared them approved as written.

Ms. Newman-Limata then asked if committee members had any changes to the March 8, 2002 Executive Committee Conference Call minutes. There being none, she declared the minutes approved as written.

Minutes from the March 19, 2002 Board of Directors meeting were distributed to Executive Committee members for information purposes only.

02 – G – 02

President’s Report

1. AICPA Council Meeting

Ms. Newman-Limata reminded committee members that the AICPA Spring Meeting of Council would be held May 19 – 21 in Savannah, Georgia. She drew the committee’s attention to the meeting’s proposed agenda, which was distributed for their review.

Ms. Newman-Limata stated that in her capacities as an AICPA Council member and as Society president, she wrote a letter to Kathy Eddy, the immediate past chair of the AICPA and a member of the CPA2Biz board of directors, on May 7, 2002 in which she requested written answers to questions on issues relating to CPA2Biz, the computerized CPA exam, and the AICPA’s financial situation in general. A copy of the letter was distributed to Executive Committee members.

A member asked if the NYSSCPA is acting alone in its request. Mr. Grumet said that to his knowledge New York’s was the only delegation to Council with a member who has posed written questions and asked for a written response. However, he indicated that the New York delegation is not alone with regard to the concerns Ms. Newman-Limata raised. After a brief discussion, Ms. Newman-Limata asked that the letter be emailed to State Society Executive Directors.

Mr. Grumet then gave a brief overview of the issues related to the computerized CPA exam. The first computerized exam will be administered in 2004, by ProMetric, a subsidiary of Thomson Publishing, in cooperation with the National Association of State Boards of Accountancy (NASBA). He noted that NASBA is a private, membership organization, not a government entity as are its member state boards of accountancy. He stated that NASBA has been solicited by the AICPA to negotiate on behalf of all the state boards so that the AICPA wouldn’t find itself in over 50 independent negotiations. Mr. Grumet further said that seven states, including New York, California and Michigan, which collectively represent about a third of CPA exam takers, have not delegated to NASBA their authority to move forward on their behalf. Ms. Newman-Limata also noted that the cost of the exam is expected to rise considerably under the AICPA-ProMetric-NASBA arrangement, which also concerned the dissenting state boards.

2. Benevolent Fund Update

Ms. Newman-Limata reported that the Benevolent Fund trustees were scheduled to meet in the afternoon and it was anticipated that two applicants for assistance would be approved and one denied at that time.

3. Leadership Conference

President-elect Golden briefed the committee on the plans for the Leadership Conference to be held July 14-16 at the Mohegan Sun Casino and Resort in Connecticut.

4. Strategic Planning Update

Ms. Golden announced that Glenn Tecker Associates would facilitate the strategic planning process at the Leadership Conference and cover four focal areas: 1) committees; 2) chapters; 3) public affairs (including government relations); and 4) the education activities.

5. Relationship with State Education Department and State Board for Public Accountancy

Ms. Newman-Limata noted that as a result of communications received from the State Board for Public Accountancy, it appears that the Society’s relationship with them has changed. Of key concern were the continued differences in opinion on expanded scope of practice.

Executive Director Louis Grumet had written a letter to newly appointed Board of Regents Chancellor Robert M. Bennett a copy of which is attached as Exhibit A. The letter evoked two responses, one from State Board for Public Accountancy chair Charles J. Schoff to Ms. Newman-Limata, a copy of which is attached as Exhibit B. The second letter was from Johanna Duncan-Poitier, the Deputy Commissioner for the Professions to Mr. Grumet, a copy of which is attached as Exhibit C.

Ms. Newman-Limata expressed her disagreement with Mr. Grumet’s decision to send the letter without Executive Committee or Board knowledge.

Mr. Grumet pointed out that his letter merely reiterated the Society’s publicly stated and board sanctioned positions with respect to the State Board, and suggested ways in which the State Board could be more effective in line with several other states’ boards.

A discussion ensued. Committee members agreed that the Mr. Grumet’s letter was consistent with the Society Board’s position regarding empowering the State Board. Another member cautioned against defeating the good intent of the Society’s position by a mode of delivery that may overshadow such intent. Others felt the letter was entirely appropriate.

Following the discussion, the committee agreed by consensus that there be no response to Mr. Schoff’s letter. In addition the committee did not decide to create a formal communication policy at that time.

6. Annual Meeting

Ms. Newman-Limata reminded committee members that the Annual Election Meeting and Dinner would be held that evening. She said that Ned Regan, President of Baruch College and former New York State Controller, would be the guest speaker, and attendees would include AICPA President Barry Melancon. The Society would also be inducting the late Philip L. Defliese and Stuart Kessler of American Express Tax and Business Services, Inc. into the NYSSCPA Hall of Fame. She noted that Mr. Kessler is the first living Hall of Fame inductee. Other awards would include the Distinguished Service Award to former Society President Steven C. Baum, and the Outstanding CPA in Education Award to Ilene Leopold Persoff.

7. By-laws Task Force

Ms. Newman-Limata announced that Sharon Sabba Fierstein, Secretary would head a task force to develop recommendations to modernize the Society’s nominating process.

8. Ethics Committee Work on Records Retention

Ms. Newman-Limata said that Ms. Rona Chernoff, chair of the Professional Ethics Committee, had raised concerns with respect to differences in ethical rules between the AICPA and the Society on records retention. Ms. Newman-Limata anticipated that this issue would continue into the next Executive Committee’s tenure.

9. Real Estate Task Force

02 – G – 03

Executive Director’s Report

1. SSNI

Mr. Grumet spoke of a Dallas meeting attended by state society executive directors regarding the breakdown of negotiations among State Societies Network, Inc. (SSNI), Shared Services LLC, and CPA2Biz. He participated from New York via conference call. At present, SSNI is occupied with how the state societies that had cooperated in the development of CPA2Biz could extract themselves from the deal.

2. COAP Report

Mr. Grumet reminded the Executive Committee that the COAP program is expanding from two campuses to five this year and that all five events would be occurring in late June.

3. College Advertising

Two advertisements placed by the Society were currently running in a number of college publications. Copies were distributed to committee members. One ad, geared towards male students, featured a football player while the second ad, geared towards women, featured a female rock star. Both ads suggested that a CPA career could be exciting and lead to financial success.

4. Dues and FAE Update

Mr. Grumet said that despite the 2002-2003 dues increase, dues receipts are on track or a little ahead of last year. To date, only two members had called to resign as a result of the dues increase.

Mr. Grumet also noted that there had been higher traffic on the website for conference registrations. He also said that the website had received a record three million hits in April. Finally, he indicated that the Society had email addresses for approximately half of its members.

5. Line of Credit

Chief Financial Officer Lynn Chambers reported that the Society had needed to draw on its entire line of credit with the Bank of New York for $500,000 in March and April, but that the entire loan had been paid off by the end of April.

6. Trade Show

02 – G – 04

Draft Legislation

Draft Legislation

Mr. O’Leary, Director of Government Affairs, distributed proposed legislative language, which was reviewed and discussed by the committee on a line-by-line basis. During the discussion, a number of changes were agreed upon by consensus. Following the review and discussion, Mr. McCoy moved and seconded by Ms. Lapidus seconded that the draft legislation as revised during the discussion be approved. Following additional discussion the motion was unanimously approved.

02 – G – 05

Membership Report

Mr. Pape, Assistant Director, Member Relations, presented the membership report, which included 149 new members (including 43 new associate members), 234 reinstatements and readmissions, 34 deaths, 34 resignations, and 6 ethics-related terminations. In addition, there was a reduction due to an administrative adjustment of 9. These changes reflected a total membership of 29,478 as of May 9, 2002. Ms. Fierstein moved that the membership report be accepted and Ms. Lapidus seconded the motion. Following discussion, the motion was unanimously approved.

02 – G – 06

Finance Committee

1. Proposal for Joint Finance Committee with FAE

Ms. Newman-Limata raised the suggestion that the Society and FAE both should have finance committees, and that both committees should meet concurrently since both organizations operate from a consolidated budget. One committee member suggested that this might be a good idea because the Society’s finance committee does not provide oversight of FAE’s financial situation. By consensus, the Committee decided to suggest to the FAE Trustees that they form a finance committee that would (a) oversee FAE’s financial situation throughout the year and (b) work with the Society’s finance committee to develop the program budget each year.

2. Approval of Finance Committee Action Plan

02 – G – 07

Leasing Policy

Ms. Newman-Limata indicated that this matter would be deferred to a later meeting.

02 – G – 08

Report on Financial Statement for period ending March 31, 2002

Mr. Aquilino, Treasurer, and Ms. Chambers distributed financial statements for the eleven-month period ending April 30, 2002 and presented a report on the financial position of the Society for the eleven-month period.

02 – G – 09

Mediation and Arbitration Committee

Mr. Woehlke, Counsel, reported that the Mediation and Arbitration Committee had not completed work on revising the arbitration rules for the Society-sponsored alternative dispute resolution program. The matter was deferred to a future meeting.

02 – G – 10

Adjournment

Ms. Newman-Limata noted that this would be the final meeting of the 2001-2002 Executive Committee. She thanked all committee members for their excellent support and effort throughout the year.

Mr. Nelson moved and Ms. Fierstein seconded, that the meeting adjourn. The motion was unanimously approved and the meeting adjourned at 1:30 p.m.