Neville Grusd, Treasurer

05 – D – 0
Call to Order

05 – D – 1
Minutes

a. Approval of Minutes of May 18, 2005, Executive Committee meeting

Mr. Langowski asked if there were any changes to the minutes of the May 18, 2005, Executive Committee meeting. Mr. Riley moved and Mr. Nowicki seconded, that the minutes be approved as written. Following discussion the motion was unanimous approved.

b. Draft Minutes of the June 2, 2005, Board Conference Call

The draft minutes of the June 2, 2005, Board of Directors conference call were distributed for information only.

05 – D – 2
President’s Report

a. AICPA Council Meeting

Mr. Langowski reported on a number of items from the May AICPA Council meeting including:

• Council passed a resolution empowering the AICPA to reach out to the Financial Accounting Standards Board and the Financial Accounting Foundation, favoring the establishment of generally accepted accounting principles for non-publicly traded companies.
• Reports on social security reform and tax reform (which mentioned the NYSSCPA effort on the SET Tax).
• Meetings with members of Congress or their staff and AICPA key persons and Council members.
• Questions about the financial condition of the AICPA raised by a group of concerned AICPA members.

Mr. Langowski noted that he and a number of the members of AICPA Council from New York may meet between AICPA Council meetings to explore issues potentially relating to their responsibilities as members of the organization’s governing body. He anticipated that some NYSSCPA staff time would be required and asked if anyone on the Executive Committee objected to this use of Society staff time. No objections were raised.

b. SET Tax

Mr. Grumet said that interviews had been given to Newsweek and Forbes on the Society’s SET Tax proposal. A question raised by a number of people with whom the SET tax had been discussed was what the actual rate would be for the SET Tax. Mr. Grumet noted that to answer that question, the Society would need to interest an institution possessing economic modeling software in the proposal. He indicated this was currently being explored.

c. Regulatory Update

Mr. Langowski discussed a proposed preliminary set of regulations deliberated over at a recent meeting of the New York State Board of Public Accountancy. The SBPA voted to endorse and propose regulations that would require CPAs to self-report litigation settlements, allegations, and convictions. Mr. Grumet continued that the Executive Secretary for the SBPA would be meeting June 16 with the Society's staff to discuss the proposals. Mr. Grumet requested and, without objection, received Executive Committee permission to send a letter to the New York Board of Regents in the event these preliminary proposals were added to the agenda of an upcoming regents meeting.

d. Legislative Update

Messrs. Langowski and Grumet reported on legislative developments in Albany. Both houses had entered into dialogue regarding the pending accountancy reform and school board proposals. The last day the legislature was scheduled to be in session was expected to be June 24. If any legislation were passed in 2005, it was expected to occur around June 23rd.

A bill that had received Society support in 2004, which would have resulted in a $10 increase to every New York professional's license fee with the revenues earmarked for enforcement of unauthorized practice laws was being considered anew for 2005. Mr. Grumet asked if the Executive Committee saw any reason not to continue the Society's support. None being raised, he said he would communicate the Society's continued support for the bill to the Legislature.

e. FAE Update

Messrs. Langowski and Schmelkin reported on the implementation of the new governance structure for FAE. The FAE Trustees met on May 17, 2005, and elected the following five individuals to fill the vacancies occurring on June 1:

• With 3-year terms: Arthur Bloom, Elliot L. Hendler and Peter K. Maier
• With a 2-year term: Scott J. Jaffee
• With a 1-year term: D. Edward Martin

The new trustees participated in an orientation on May 24. The trustees will select officers on July 12.

f. 2005 Leadership Conference

Mr. Langowski circulated the agenda for the leadership conference and encouraged all to return their registration materials soon.

g. Presidential Committee Appointments.

Mr. Langowski announced the following Operations Division committee chair appointments:

• Audit Committee - Warren Ruppel
• Quality Enhancement Policy Committee - Tom Riley

In addition, he reminded the committee that Neville Grusd would serve as chair of the Finance Committee per the Society’s bylaws.

Mr. Riley described his plans for the ensuing year.

a. Reports on Chapters

Messrs. Rich and Valenti reported that 13 of the 17 chapter organizational meeting had occurred. They had noted that the least densely populated chapters appeared to need the most support from the Society leadership and staff. Mr. Valenti commended the chapters for their use of the web communications vehicles available through the Society’s web site. He had observed some confusion about the geographical boundaries of certain chapters. He said that chapters should be encouraged to use conference call technology as used by the statewide committees. Mr. Nowicki suggested that the Society could explore the use of webcasts to expand participation in chapter activities.

b. Recent Society Comments

Ms. Schoenfeld noted that four comments projects were in various phases of completion.

Society Controller Adam Cheung reported that the May 31, 2005, year-end statements were being prepared and would be ready for the July Board meeting.

Mr. Nowicki reported on a proposal from the Tax Division Oversight Chair (TDOC) Maryann Winters to introduce the concept of a one-year hiatus after a member had served five consecutive one-year terms. Mr. Nowicki noted that while other oversight committees were populated with the chairs of their constituent committees and, therefore, had a natural rollover of committee members, TDOC did not.

Ms. Schoenfeld, who in addition to her vice presidency, serves as the TDOC Vice Chair, stated that due to the large number of constituent committees in the Tax Division, the decision had been made many years previously to populate TDOC with selected former committee chairs and other prominent tax CPAs. At the time, this meant that TDOC could operate with fewer than 13 members. Over the years the size of the committee had crept up to well over twenty and included people who the committee chair believed were no longer very active. Ms. Winters had taken action to reduce the committee size, but recognized that if a hiatus rule were not introduced the problem would repeat in a few years as future TDOC chairs strove to add new talent to the committee. The Executive Committee was uncomfortable with introducing a hiatus rule for a single committee. Mr. Langowski said he would speak with Ms. Winters to discuss the situation further.

a. Dues Update

Mr. Grumet said that dues revenue was being received at a higher rate than the previous year despite the dues increase.

b. COAP Update

Mr. Pape reported that the COAP programs were all proceeding well, including the newest program at Dutchess Community College. Approximately 250 students were participating statewide. The programs were scheduled to run beginning June 24.

c. Insurance Update

Mr. Grumet referred the committee to the materials accompanying the agenda for information on the current status of the professional liability insurance program.

d. Washington Press Briefing

Mr. Grumet reported that the highly successful program to brief members of the media on understanding financial statements was expanded to a group of Washington, DC, reporters. Twenty reporters attended the briefing which was held in Washington on May 23, including representatives from the Washington Post and USA Today. The presenters for the program were former Society president Nancy Newman-Limata and Board member Neville Grusd.

e. CPAs on Boards Update

Mr. Grumet and Ms. Barry described the CPAs on Boards program. Ms. Barry reported that 99 CPAs had contacted nonprofit organizations about serving on their boards. Mr. Grumet noted that there had been a great deal of chapter buy-in to the effort. Also, the Society had been approached by the UJA, which wanted to join the other umbrella groups feeding nonprofit organizations into the CPA matching service.

f. Junior Achievement Proposal

Mr. Pape noted that Junior Achievement had requested assistance finding CPAs to work with their program in the New York City area. He and Mr. Grumet sought Executive Committee approval to proceed, which was given without objection.

g. Student Outreach / CPA Recruitment.

Mr. Pape distributed a publication titled New Accountant, which is circulated gratis to high school and college students. The publisher approached the Society to have an issue printed with the Society logo on the cover and including a Society insert, which could then be circulated as part of the Society's recruitment effort. Mr. Grumet asked if there would be any objection to proceeding, realizing that the project would cost approximately $7,500. The Executive Committee, without objection, encouraged staff to proceed.

Mr. Langowski reported that the staff had prepared an affiliation agreement with a five-year, automatically renewing term, memorializing (a) the approaches currently used to allocate expenses between FAE and the Society, (b) the programs FAE co-sponsors with the Society or administers for the Society, and (c) the governance relationship between the two organizations. He noted that the FAE trustees had approved the agreement at their May 17 meeting.

Mr. Nowicki made the following motion, which was seconded by Mr. Falbo:

RESOLVED, that the Executive Committee recommends that the NYSSCPA Board approve the NYSSCPA / FAE Affiliation Agreement; provided that the term of the agreement run for five years without an automatic renewal provision.

Following discussion, the motion passed unanimously.

Mr. Langowski recognized Mr. Edwin Kliegman, immediate past chair of the Small Firm Practice Management Committee, who presented a report on the continuity of practice program being proposed by the committee. The committee sought to assist the survivors of deceased members as well as disabled and retiring members manage or dispose of their CPA practices. The proposed program would entail gathering information both from members wishing continuity of practice assistance as well as the firms willing to assist a disabled member or acquire a practice. A group of at least three committee members would then assist in matching those needing assistance with those willing to provide it. Mr. Woehlke, who had assisted Mr. Kliegman in the preparation of the program description, noted that the program was designed to interface with all seventeen chapters so that the program could operate consistently throughout the state.

Following discussion, Mr. Moynihan moved and Mr. Riley seconded the following resolution:

Resolved , that the Executive Committee recommends for approval on a provisional three-year basis the Continuity of Practice Program proposed by the Small Firm Practice Management Committee, subject to the Committee’s making the following alterations:

1. Members or their personal representative needing assistance under the program shall be provided a complete list of firms willing to provide assistance or purchase the member’s practice, as the case may be. The list may be sorted in a method the committee believes to be of use to the member or personal representative, for example, by location, firm size, or firm practice area.
2. The sponsoring committee shall not recommend specific individuals or firms to the member or personal representative.
3. The program should apply only for disabled members and deceased members’ survivors; any application to otherwise retiring members should be removed from the program description.
4. Specific numbers and percentages and ranges are to be removed from the program description.
5. The program document may be augmented to include broad information as to how to select a buyer.

Resolved, further, that the Committee annually shall report to the Executive Committee about the program, including the number of members enrolled in the program, the number of times assistance was given, and any other information the Executive Committee, the sponsoring committee, or staff believes to be of use in assessing the program.

Resolved further, that the document describing the program shall be reviewed by the President to ensure it correctly reflects the intent of this resolution before being presented to the Board.

Following further discussion, the motion passed unanimously.

Mr. Pape presented the Membership Report prepared as of June 14, 2005, which included 125 new members (including 54 new associate members), 4 reinstatements, 18 deaths, 37 resignations and 8 associate-candidate terminations due to the candidates’ having reached the end of their maximum, five-year membership period. These changes reflected a total membership of 30,136 as compared with 30,386 at that time the previous year.

Upon a motion made by Mr. Moynihan and seconded by Ms. Schoenfeld, the Executive Committee unanimously approved the membership report.