EC11 - I - 0
Call to Order

EC11 - I - 1
Minutes

a. Approval of Minutes of May 5, 2010, Executive Committee Conference Call

Ms. Wood asked if members had any changes or comments to the minutes of the May 5, 2010, executive committee conference call. Mr. Herman moved to approve the minutes of the May 5, 2010, executive committee conference call, and Mr. Adair seconded the motion. After discussion, the motion passed with no objection. Ms. DelleBovi, Ms. George, Ms. Kinsella, and Messrs. Barone, Piluso, and Sohr abstained.

b. Approval of Minutes of May 13, 2010, Executive Committee Meeting

Ms. Wood asked if members had any changes or comments to the minutes of the May 13, 2010, executive committee meeting. Mr. Adair moved to approve the minutes of the May 13, 2010, executive committee meeting, and Mr. Huttlinger seconded the motion. After discussion, the motion passed with no objection. Ms. DelleBovi, Ms. George, Ms. Kinsella, and Messrs. Barone, Piluso, and Sohr abstained.

c. Approval of Minutes of May 21, 2010, Executive Committee Conference Call

Ms. Wood asked if members had any changes or comments to the minutes of the May 21, 2010, executive committee conference call. Mr. Adair moved to approve the minutes of the May 21, 2010, executive committee conference call, and Mr. Huttlinger seconded the motion. Mr. Huttlinger noted that he should not be the subject person mentioned in the second paragraph of Item EC10?G?2, Affiliation Agreement Between the NYSSCPA and FAE. Mr. Herman noted he should be the identified person instead. Mr. Adair moved to approve the amended minutes of the May 21, 2010, executive committee conference call, and Mr. Huttlinger seconded the motion. After discussion, the motion passed with no objection. Ms. DelleBovi, Ms. George, Ms. Kinsella, and Messrs. Barone, Piluso, and Sohr abstained.

d. Approval of Minutes of May 27, 2010, Executive Committee Conference Call

Ms. Wood asked if members had any changes or comments to the minutes of the May 27, 2010, executive committee conference call. Mr. Adair moved to approve the minutes of the May 27, 2010, executive committee conference call, and Mr. Herman seconded the motion. After discussion, the motion passed with no objection. Ms. DelleBovi, Ms. George, Ms. Kinsella, and Messrs. Barone, Piluso, and Sohr abstained.

e. Minutes of May 13, 2010, Board of Directors’ Conference Call (for information only)

Ms. Wood noted that the draft minutes of the May 13, 2010, Board of Directors’ conference call were provided for the Executive Committee’s information.

f. Minutes of June 2, 2010, Board of Directors’ Conference Call (for information only)

Ms. Wood noted that the draft minutes of the June 2, 2010, Board of Directors’ conference call were provided for the Executive Committee’s information.

g. Minutes of the 113th Annual Election Meeting (for information only)

Ms. Wood noted that the draft minutes of the 113th Annual Election Meeting were provided for the Executive Committee’s information.

a. AICPA Update

Ms. Wood noted that, because her employer is the auditor for CPA2Biz, a subsidiary of the American Institute of Certified Public Accountants (AICPA), she has a conflict of interest and is not a member of the AICPA Council, the governance body of the AICPA. Ms. Wood indicated she would continue to attend the AICPA Council meetings as a guest in her role as the President of the Society. She asked Mr. Piluso, a current member of the AICPA Council, to provide the update instead.

Mr. Piluso noted that the 2010 AICPA Spring Meeting of Council was held in San Diego, California. Mr. Barry C. Melancon had provided updates on the issues in Washington, D.C., and the accounting profession in general. He had mentioned that the Supreme Court could rule part of the Sarbanes-Oxley Act of 2002 unconstitutional before June 30, 2010. Other issues that had been discussed by Mr. Melancon included convergence, the IASB, and IFRS.

Ms. Wood noted that Mr. Melancon had complimented the legislative effort the state of New York had been making for mobility.

b. Mobility Update

Ms. Wood stated that the proposed mobility legislation had been pending in the New York State Assembly. A Manhattan/Bronx Chapter meeting would be held at the Society’s office in New York City on June 25, 2010, for the small firm practitioners to discuss the impact mobility would have on them. Mr. Moynihan would be present at this meeting. Ms. Wood added that Mr. Moynihan and the State Society are working with the major accounting firms in their lobbying effort with Assemblyman Sheldon Silver on the proposed mobility legislation. Mr. Moynihan had previously met with Assemblyman Silver and his staff on June 18, 2010, and no questions had been raised at that meeting.

Ms. Barry added that a conference call had been held on June 23, 2010, with the lobbyist representing the major accounting firms. It was noted that the Assembly had not been focused on the proposed mobility legislation because of the current state budgetary crisis.

Ms. Barry stressed that the Society’s Board had supported the bill that had been passed by the Senate, but had reservations about the bill that had been introduced in the Assembly.

c. Formation of Real Estate Task Force

Ms. Wood stated that she had formed the Real Estate Task Force, which would consist of Mr. J. Michael Kirkland (Chair), Mr. Mark G. Leeds, and a member of the FAE Trustees to be appointed by the FAE Trustees. She noted that the mission of the task force would be to examine the current rental agreement between the Society and the landlord and to explore alternative options, given the fact that the current lease would be expiring in August 2013. Ms. Wood stressed that the task force would focus on the needs of the Society and FAE first and would be reporting back to the Executive Committee in due course. The final membership of the task force would be announced by the August 2010 Executive Committee meeting.

d. Formation of Industry Outreach Task Force

Ms. Wood stated that she had formed the Industry Outreach Task Force. She had not decided whether the task force would also focus on the areas of government and academia. The task force would consist of no more than seven individuals, who would include Mr. Richard E. Piluso (Cochair), Mr. J. Michael Kirkland (Cochair), and Mr. Mark G. Leeds. She had considered including a member from Baruch College, as well as two other members.

She noted that FAE had mentioned possibly including one of its trustees from industry to be a member of the task force. The final membership of the task force would be announced by the August 2010 Executive Committee meeting. She added that the Society would need to understand the value proposition for industry members. She concluded by indicating that there would be a breakout session at the upcoming Annual Leadership Conference focusing on industry, and the information gathered during that session would be the genesis of this task force’s dialogue.

e. Formation of NYSSCPA/FAE Affiliation Task Force

Ms. Wood provided the background surrounding the NYSSCPA/FAE Affiliation Agreement, which was recently renewed by the Executive Committee on May 27, 2010. She noted that, due to the evolving relationship between the NYSSCPA and FAE, FAE’s future needs for space, and the Society’s budget situation, a task force that would examine the affiliation between the NYSSCPA and FAE should be formed. She had chosen Ms. Gail M. Kinsella, a past president of the FAE Trustees, to chair the NYSSCPA/FAE Affiliation Task Force (ATF) and Ms. Kinsella would also be serving as the Society’s Board liaison to FAE.

Ms. Kinsella stated that the mission of the task force would be to study, understand, and summarize the historical relationship between the NYSSCPA and FAE and to provide suggestions on how to maintain their ongoing relationship. She noted that the members of the ATF would consist of current and past Executive Committee members. They would be Ms. Gail M. Kinsella, and Messrs. Joseph M. Falbo, Jr., Mark L. Meinberg, David J. Moynihan, and Liren Wei. She would be serving as Chair, and Mr. Moynihan would be serving as a nonvoting advisor. She targeted a report date to the Executive Committee at its November 2010 meeting.

Mr. Piluso asked whether there would be sufficient time for the Society to renegotiate the affiliation agreement with FAE after the ATF would report back in November 2010. Ms. Kinsella responded that the current affiliation agreement between the NYSSCPA and FAE would be expiring on May 31, 2011, and that there would be sufficient time to renegotiate a new agreement.

Mr. Herman asked what would happen if the five-member ATF had reached a stalemate in policy decisions, since Mr. Moynihan would be a nonvoting advisor. Ms. Kinsella responded that she would be looking to the ATF to reach broad consensus and to provide both sides of the issues and suggestions to the Executive Committee. Ms. Kinsella pointed out that this task force would not be a policy setting body.

Mr. Sohr asked whether the ATF would be reviewing the issue of FAE’s future technology delivery. Ms. Wood stated that all management issues for the NYSSCPA and FAE, as well as the future needs of FAE, would be considered.

Mr. Piluso noted that it might be prudent for the FAE Trustees to devise a strategic plan and that the NYSSCPA and FAE should consider who had been the executive director of FAE and staff allocation in the overall assessment. Ms. Wood stated that she had previously suggested that the FAE Trustees establish a code of conduct, but that idea had not yet materialized.

f. 2010 Annual Leadership Conference Update

Ms. Wood indicated that the tentative schedule for the programming of the 2010 Annual Leadership Conference would be sent out by Mr. Schmelkin to all invited attendees shortly. Included in the agenda would be a session on the new structure and working together broken out by committees, industry, and the role of advocacy based on committee and chapter initiatives. In addition, there would be a session on membership expansion broken out by industry outreach, young CPAs, and general discussion, and ideas on membership/value proposition would be key discussion points.

Ms. Wood added that a Society Strategy Task Force would be formed during the Fall. Mr. Huttlinger and Ms. Suzanne M. Jensen would be members of this task force. The ideas generated during the membership expansion breakout session would be forwarded to this task force for consideration.

Ms. Wood noted that Mr. Michael F. Rosenblatt, Chair of the Industry Division Oversight Committee, would be forwarding a proposal on establishing additional industry committees at the Executive Committee meeting to be held at the Leadership Conference. She would also be looking to Mr. Rosenblatt to provide candidates for the Industry Outreach Task Force.

Ms. Wood asked for staff to compile a list of family-oriented facilities near the Turning Stone Resort & Casino for distribution to attendees. She also asked Mr. Schmelkin to discuss with Turning Stone Resort & Casino about the avoidance of any check-in delays for participants.

g. Chapter Town Hall Meetings Schedule (Tentative)

Ms. Wood noted a tentative schedule for the upcoming chapter town hall meetings had been included in the agenda packet.

a. Quality Enhancement Policy Committee

Mr. Piluso mentioned that the first meeting of the Quality Enhancement Policy Committee for fiscal year 2010/2011 had taken place on June 17, 2010. The committee would focus, over the current fiscal year, on what quality would mean for members in industry. Quality as it would relate to peer review, ethics, and CPE would also be addressed. He added that the next meeting would take place on July 22, 2010, and that he would be seeking two new members representing the industry sector.

b. 2011 Annual Leadership Conference

Mr. Piluso stated that the 2011 Annual Leadership Conference would be held at the Turning Stone Resort & Casino in Verona, New York. Planning for this event had not begun yet.

a. Chapters

Ms. Jaeckle discussed the recent visits to the chapter organization meetings and installation dinners. She commented that the presentation by staff had been customized for each chapter and had been positively received. The Utica Chapter had appeared to need support from the Society. A President’s call was held on June 23, 2010, and only two chapter Presidents were absent. She had notified the chapters that the chapter President, President-elect, and Young CPA representative would be expected to attend the Annual Leadership Conference. If the Young CPA representative could not attend, an alternate Young CPA could be designated. She also noted that employers had not historically been supportive of the Society’s Young CPA events because they sometimes had deemed the activities to be irrelevant to the professional growth of young CPAs. She mentioned that the Rockland Chapter Young CPAs Committee had recently organized a session for young CPAs with bankers and it was very informative and successful. She added that the Queens/Brooklyn Chapter installation dinner had been great and that children had been allowed to attend.

Mr. Herman noted that the chapter Vice Presidents ought to be better prepared by staff prior to the chapter events regarding the agenda and people involved. He stated that the Nassau, Suffolk, Westchester, and Mid-Hudson Chapters had good organization and committee structure.

However, the Southern Tier Chapter had no CPE event planned for the year except their tax conference. The Northeast Chapter organizational meeting had only 10 people in attendance, but only six of them had been members of the chapter. He had urged greater participation by members of that chapter. He commented on the successful organizational meeting held at the Adirondack Chapter, thanks to the effort of Ms. Barbara S. Dwyer and Mr. Huttlinger.

Ms. Jaeckle suggested the possibility of forming a political liaison committee at the Northeast Chapter, due to its close proximity to the state capital.

Mr. Huttlinger noted that the NYSSCPA Board chapter representative should be more involved in his or her own chapter’s event. Mr. Herman reiterated this comment by stating that the NYSSCPA Board chapter representative should be the voice of the chapter and should report to his or her chapter board, while the Chapter Vice Presidents should be involved in the procedural issues related to the chapters.

b. Recent Society Comments

Vice President Scott M. Adair noted that a final draft of a comment letter on an IASB Exposure Draft on Financial Instruments: Amortized Cost and Impairment, had been completed by the International Accounting and Auditing Committee and had been pending review and approval. The submission deadline would be June 30, 2010. There had possibly been a comment letter on trust and estate tax administration, though it had not been finalized. He added that there would possibly be a couple of comment letters on some AICPA-proposed SASs later this summer which the Auditing Standards Committee had been contemplating. Since the May 13, 2010, Executive Committee meeting, six comment letters had been submitted.

c. Committees

Ms. Kinsella referred members to the committees report that had been included as part of the agenda packet. Highlights of recent activities had been provided, while the contact information of the chairs of all oversight committees and their upcoming meetings had also been provided. She noted that she had reached out to all the committees in the Operations Division and had offered her assistance, should they require it.

a. Nominating Process Report

Mr. Falbo stated that an e-mail to the membership had been sent on June 16, 2010, soliciting their interest in serving on the 2010–2011 Nominating Committee. So far, he had already received responses regarding some time/date conflicts with the Nominating Committee meeting date on January 13, 2011. Mr. Sohr asked the Executive Committee members to reach out to the chapters and solicit interest in participation in the Nominating Committee. Mr. Piluso also requested that Ms. Wood make an announcement to the participants at the beginning of the 2010 Annual Leadership Conference regarding their participation in the Nominating Committee.

b. Financial Statements for 11 Months Ended April 30, 2010

Messrs. Falbo and Payano provided the committee the unaudited financial statements of the Society for the 11 months ended April 30, 2010, which would also be presented at the Board of Directors’ meeting at the 2010 Annual Leadership Conference with year-to-year comparison. It was noted that, as of April 30, 2010, the Society had experienced a fiscal year-to-date decrease in net assets of $58,139.

Mr. Falbo reiterated that the Society had recently ceased the monthly contribution of $16,667 to the reserve fund, whose balance had stood at approximately $1.2 million and was never designated by the Board of Directors for specific usage. Approximately $400,000 of the reserve fund had been used to fund the Society’s FY 2009/2010 operating expenses.
Mr. Falbo announced that the FY 2010/2011 Finance Committee would consist of Ms. Katharine K. Doran, Ms. Eileen F. Hamlin, Ms. Suzanne M. Jensen, Ms. Michelle M. Levine, and Messrs. Robert H. Colson, Joseph M. Falbo, Jr., and David J. Moynihan. He would task the committee to review the financial statements on a quarterly basis. Ms. Wood noted that Mr. Falbo could increase the size of the Finance Committee, should there be a need.

Mr. Falbo reminded members that all inquiries related to the financial statements should be addressed to him directly, not to staff or other members of the Finance Committee.

c. Cash Flow Update

Mr. Payano provided a cash flow update to the members of the Executive Committee.

He noted that all chapters had recently been funded for the balance of their FY 2009/2010 allocation. Therefore, at this point in time, the chapters would not be receiving the first half of their allocation for FY 2010/2011. Mr. Payano would be monitoring the cash balances of the chapter accounts and would be providing funding on an “as needed” basis.

a. Legislative and Regulatory Update

Ms. Barry noted that a copy of the mobility legislation introduced by Senator Toby Ann Stavisky and had been passed by the New York State Senate, and a draft copy of the regulations on quality review had been provided in the agenda packet. She added that the draft copy of the regulations on quality review should be kept confidential at this point.

b. Dues Update

Ms. Barry noted that to date, approximately $5.7 million (69%) had been collected in dues for the upcoming fiscal year. The contributions to COAP, scholarship, and the PAC had been consistent with prior years.

c. Association Management System - Aptify Update

Mr. Schmelkin referred members to the Aptify Project Implementation Report included as part of the agenda packet. He mentioned that a discussion with Aptify had taken place during the morning of the Executive Committee meeting regarding the outstanding items to be addressed and the related costs. The major items had related to The CPA Journal’s BPA Audit module and integration with the Society’s accounting system.

Ms. Wood requested that Aptify provide a revised project timeline with a go-live date and an update report by staff to be given to the Executive Committee at the 2010 Annual Leadership Conference on July 11 and to the Board of Directors on July 13. She asked Mr. Schmelkin and Ms. Barry to review the Aptify contract and to arrange a conference call that would include Ms. Wood, Ms. Barry, and Messrs. Falbo, Schmelkin, and Sinegal regarding the Society’s position.

Mr. Piluso asked why the New Jersey Society of Certified Public Accountants and the Ohio Society of CPAs, both prior customers of Aptify, had not experienced the same difficulties that the NYSSCPA had. Mr. Schmelkin responded that the major cause of the problem experienced by the NYSSCPA that the New Jersey Society of Certified Public Accountants and the Ohio Society of CPAs had not experienced had been related to the data housed in the NYSSCPA’s current association management system. In addition, a different Aptify project team had been assigned to the NYSSCPA, and he suspected that there had been no information sharing within Aptify from its prior experience with the New Jersey Society of Certified Public Accountants and the Ohio Society of CPAs.

Mr. Falbo asked how much of the contracted costs of the project had been unpaid. Mr. Schmelkin responded that the NYSSCPA had been very current with the payables to Aptify.

d. FAE Flash Report as of May 31, 2010

Mr. Schmelkin referred members to the FAE Flash Report, which had been provided as part of the agenda packet. He added that, during the past fiscal year, there had been a positive increase in the number of committee technical sessions from 160 to 260, which had helped the growth of FAE’s online educational program.

Mr. Herman inquired why FAE would charge the same price for participation in a FAE event in person as it would for the webcast. Ms. Wood stated that the pricing policy would be set by the FAE Trustees.
Mr. Piluso asked how the FAE programming had been affected by the participation of industry members. Ms. DelleBovi mentioned that, typically, industry members had considered the CPE offerings to be too expensive.

Ms. Wood added that most CPAs would obtain free CPE from the major accounting firms. Mr. Schmelkin also noted that FAE had offered more specific industry courses, but many of these courses had ended up being cancelled due to low registration. He also noted that there had existed an opportunity cost of revenue that otherwise would have been earned by FAE by offering a popular tax course. Ms. Wood stated that the Industry Task Force would also be charged with reviewing the CPE aspect for industry members.

Ms. Barry presented the membership report that reflected, as of June 24, 2010, a total membership of 27,428, including 205 new applicants, 18 reinstatements, 16 deaths, 49 resignations, 401 terminations, and one ethics-related termination. Ms. Wood requested that, for future membership reports, she would like to see a breakdown of resignations and terminations by membership type, and she would also like to see a subtotal for membership that would exclude the membership types of CPA candidates and students.

Mr. Falbo moved to accept the membership report, and Ms. Kinsella seconded the motion. After discussion, the motion passed unanimously.

Mr. Payano stated that a commitment for a credit facility had been secured from Citibank, N.A. The Society’s previous credit facility with Bank of America had expired. In his effort to secure a new credit facility, he had solicited Bank of America, HSBC, Capital One, and Citibank. Upon review, Citibank was selected. As a result, the Society would also be transferring its primary banking relationship from Bank of America to Citibank. In order to ensure a smooth transition, the chapter bank accounts would be transferred at a later point in time.

Mr. Herman asked if the Society would be able to fulfill Citibank’s reporting requirement of receiving the “combining and combined audited fiscal year-end financial statements on a yearly basis” within 120 days from fiscal year-end. Mr. Payano responded that the audited financial statements had been regularly provided by the auditor in September, the fourth month after the end of the fiscal year.

Mr. Huttlinger asked if the Society had considered additional financing for Aptify expenses. Mr. Payano responded that $250,000 was the maximum credit offered at this time. However, the Society could apply for additional funding in the future, if necessary.

Mr. Piluso moved to approve the total credit facility of $1,916,000 that was sought from Citibank, which had included a Relationship Ready Credit of $500,000 to support working capital, a Term Loan of $250,000 to finance the final phase of Aptify, and a Standby Line of Credit of $1,166,000 for rent security, and Mr. Herman seconded the motion. After discussion, the motion passed unanimously.

Ms. Barry referred the committee to the agenda packet for background information on this item. The Society had initially solicited competing bids from three vendors and Cadmus was selected. (Cadmus has been a vendor for the Society during the last 10 years.) She stated that the new contract would save the Society approximately $6,000–$7,000 per month; it would be made retroactive to March 2010, and production time would also be saved as a result. This contract would be renewable annually after 2013, and there would be a cap on the cost of paper, to be renewed every quarter.

Ms. Kinsella moved to approve the Cadmus contract, and Mr. Adair seconded the motion. After discussion, the motion passed unanimously.

Mr. Pryba presented the updated Conflict of Interest Disclosure Statement for the current fiscal year. He noted that any mention of the NYSSCPA Benevolent Fund, Inc., on the document had been shown as a black line strikethrough.

Mr. Piluso moved to ratify and approve the Conflict of Interest Disclosure Statement, and Mr. Sohr seconded the motion. After discussion, the motion passed unanimously.

Ms. Wood stated that she would like to form a Statewide Young CPAs Committee. Ms. Cynthia D. Barry would be the advisor for the committee. The committee would be charged with the mission to retain young CPAs as members of the Society as well as to recruit additional ones to join the Society. Mr. Piluso moved to approve the formation of the Statewide Young CPAs Committee, and Mr. Sohr seconded the motion. After discussion, the motion passed unanimously.

Mr. Adair moved to adjourn the meeting, and Mr. Sohr seconded the motion. There being no objection, the meeting adjourned at 3:20 p.m.