EC08 – C – 0
Call to Order

EC08 – C – 1
Minutes

a. Approval of Minutes of May 15, 2008, Executive Committee Meeting

Ms. Fierstein asked if there were any comments or corrections to the draft minutes of the May 15, 2008, Executive Committee meeting. Ms. Dwyer and Ms. Fierstein indicated typos. Mr. Piluso moved to approve the minutes upon correction and Mr. Falbo seconded the motion. The motion passed. Ms. Barry and Messrs. Adair, Moynihan, and Wei abstained.

b. Draft Minutes of July 15, 2008, Board of Directors Meeting

Ms. Fierstein noted that draft July 15, 2008, Board minutes were attached for the Executive Committee’s review and comment.

a. FAE Update

President Fierstein asked Mr. Schmelkin to report on the status of FAE. FAE’s performance was about the same as fiscal year 2007/8, down only $20 thousand from the preceding year, primarily due to three events cancelled because of speaker unavailability. Mr. Schmelkin reported positive feedback from the FAE survey and that FAE had begun analysis of the survey results. Mr. Schmelkin reviewed the economic model used for pricing the POP pass, noting that approximately 80% of individual POP pass capacity and 95% of firm coupons were typically utilized. The FAE trustees would next meet on September 4, to set the terms for the POP pass for the 2008-2009 CPE year.

b. Report on AICPA Oversight of NYSSCPA Peer Review Administration

President Fierstein asked Mr. Markezin to report on the recent oversight review of the NYSSCPA’s administration of the AICPA peer review program in New York. Mr. Markezin explained that normally the AICPA performed its review of the Society’s effectiveness in administering the program every other year. However, two and a half years ago, the Society received what was effectively an adverse report. In such instances, the AIPCA performs an accelerated review, which the Society underwent in the summer of 2007, receiving a clean report with some comments. Though not required, Mr. Markezin indicated that after that review, the Society requested another accelerated oversight for 2008. That oversight review was completed last month, with the Society receiving its second “clean” report in a row. The Society will return to the normal schedule of every other year.

c. Town Hall Meeting Schedule

The 2008 Town Hall Meeting schedule was presented. Meetings were scheduled in September, October, November and one scheduled in January.

a. Quality Enhancement Policy Committee Update

Mr. Moynihan explained the committee was continuing to work on the post-certification education whitepaper. He added that the committee members received a homework assignment for the upcoming meeting in September. In 50 to 100 words, each member was to write a three-year, personal, professional development plan. Mr. Moynihan added that the committee continued to examine other states’ continuing education requirements and that the paper would be principles-based not rules-based. The committee intended to complete a draft paper by January 2009.

b. 2009 Leadership Conference

Mr. Moynihan announced the 2009 Leadership conference would be held at Turning Stone Resort.

a. Chapters Update

Vice Presidents Falbo and Dwyer reported on recent chapter matters. During the course of their report, the committee discussed the Brooklyn Chapter. Mr. Falbo made the following motion which was seconded by Mr. Piluso:

The NYSSCPA Executive Committee recommends that the Board dissolve the NYSSCPA Brooklyn Chapter due to its longstanding inability to deliver sufficient service to the chapter’s membership.

Following extensive deliberations the motion was unanimously approved.

b. Recent Society Comments

Vice President Wood reported the society had produced 15 comment letters thus far during the current fiscal year with nine submitted in July alone.

c. Committees

Vice President Hendler reported that all oversight committees had met. President Fierstein asked Mr. Hendler to review the committee action plans of all oversight committees. Mr. Hendler reported on plans for a committee open house in October. Committees are expected to invite both Society members who do not currently serve on a committee as well as non-society members, hoping to increase Society and committee membership. An advertisement would be included in the Trusted Professional and the Society website. Mr. Hendler noted that the Society

had recently hired Dominic Yung, who would be serving as industry manager. Mr. Hendler also stated that committee attendance and participation are always ongoing concerns.

a. Legislative and Regulatory Update

Mr. Grumet stated the legislature had come and gone, leaving the proposed accountancy reform legislation dying on the Senate floor after its third reading. He reported that due to changing political realities, the PAC’s Board had changed its contribution policy.

b. Replacement of IT System

Mr. Grumet discussed the replacement of current IT system, noting that Alan Schmelkin had priced out membership systems in at the ASAE convention in San Diego. Mr. Piluso recommended budgeting in a cushion whenever one installs an IT system.

c. Dues Update

Mr. Grumet reported that the receipt of membership dues stood at 86% which was slightly ahead of the prior year.

d. Member Benefits Program Update

The Executive Committee was referred to the agenda attachment regarding the current state of the Society’s member benefit programs

e. “CPE On-the-Go” Project

Ms. Kranacher reported that beginning in October members would be able to earn CPE credit for reading The CPA Journal and taking a quarterly examination. This service would be offered for $99 for members and $149 for nonmembers. Members will be able to begin signing up for the service in September.

f. FAE/Benevolent Fund Proposed Merger

Mr. Woehlke reported that much of the material required for a merger filing had been collected and would be submitted by the time of the Board meeting. Approval would be required from the New York Charities Bureau, the State Education Department and a New York State Supreme Court.

Draft Proposed NYSSCPA Strategic Plan

Ms. Fierstein and Mr. Grumet led the discussion of the proposed strategic plan. The committee provided input. By consensus, the “Big Audacious Goal” was removed from the plan. In light of the committee discussion, Ms. Fierstein asked staff to redo the draft strategic plan with a new core purpose, core values, and draft goals. When presented to the Board, the purposes in the NYSSCPA and FAE certificates of incorporation would be presented to the Board to assist in finalizing the strategic plan.

a. Professional Ethics Committee

Mr. Kawa, chair of the Professional Ethics Committee, reported the committee currently has 25 members and meets in person every other month to deliberate and act on ethics investigations, and conducts a conference call regarding the status of investigations in each of the other months. The committee currently has a policy of a thorough review before members are appointed to a third term. Mr. Kawa noted the committee had five working groups which were charged with the following tasks:

• Revision of the procedures manual.
• Drafting of comment letters
• Website
• Code of Conduct
• Ethics Education

Also, the committee is structured with a Vice-Chair and two “assistant chairs”. The committee has about 65 open cases at any given time and closes approximately 30 cases a year.

b. Consulting Services Oversight Committee Report

Mr. Pearson, chair of the Consulting Services Oversight Committee, participated via telephone. He stated the committee acts like a filtering mechanism on what works and what does not for the division. The committees in the consulting services division include the following:

• Anti Money Laundering and Counter Terrorist Financing Committee
• Bankruptcy and Financial Reorganizations Committee
• Business Valuation Committee
• Information Technology Committee
• Litigation Services Committee
• Mediation and Arbitration Committee

Mr. Pearson stated each committee does a good job on continuing professional education.

a. Review of Draft Audit Report

Mr. Banerjee prefaced the discussion of the audit results by reviewing the financial highlights of fiscal year 2008. He noted that there were no adjusting entries as a result of the audit for the fiscal year 2008 as had been the case during the previous three years; and hence the presentation was identical to the one given to the full Board at the Annual Leadership Conference. Mr. Banerjee noted that FAE had another banner year; and the second year in a row for which it needed to receive less CPE Program Support from the Society than had been budgeted. For fiscal year 2008, FAE needed $419 thousand for CPE Program Support, which was $63 thousand less than the budgeted figure.

Michelle Mark Levine, Chair of the Audit Committee, then introduced representatives from Loeb & Troper, the Society’s auditors. Loeb & Troper issued an unqualified opinion on the financial statements of New York State of Certified Public Accountant and consolidating entities for the year ending May 31, 2008. Mr. Blum led the discussion and described staff as very responsive during the audit. They noted that a few items were classified differently than in previous years, but these were not major issues. Mr. Blum noted that the Form 990 would be significantly changed for the fiscal year 2009 and would require additional reporting and a tremendous amount of narrative. The auditors stated they were very satisfied with the audit results overall.

The Executive Committee then entered into executive session for further discussions with the auditors and Audit Committee chair. No action was taken as a result of the executive session discussions.

b. Review of Draft Management Letter

The auditors reviewed their “management letter” and stated they were not aware of material weaknesses or fraud. Areas of deficiency included the frequency of posting cash receipts and the need to develop additional internal controls for review of payroll. Mr. Moynihan questioned where the greatest risk of fraud rested. The auditor answered that, as with most organizations, the greatest risk of fraud exists in payroll, accounts receivable and disbursements. The auditors stated that there needed to be a more thorough review of financials before presentation to the Board. Mr. Grumet stated that the upgrade of the Society’s Great Plains software would solve many issues. The auditors stated that there was an issue of sloppiness among the chapters and recommended a review of policies pertaining to the chapters.

Ms. Fierstein appointed a task force to review chapter policies and recommend change where necessary. The task force members are Cynthia Barry, Barbara Dwyer, Joseph Falbo and Mark Meinberg. They are to report to the Executive Committee in November.

President Fierstein noted that Mr. Grumet was writing a book about a court case that was independent of his activities and responsibilities at the Society. She indicated that he had fully disclosed the endeavor to her, her predecessor and others in the Society leadership, and that the work was being done by Mr. Grumet on his own time at his own expense. She said that unless there was an objection from any members of the committee, she would write a letter to Mr. Grumet recognizing the independent nature of this activity. There was no objection from any Executive Committee members.

Member Benefits Approvals

Mr. Pape discussed the Member Benefits Committee’s recommendations for two new member benefits making available two publications authored by Seymour Goldberg. Both books would be distributed in an electronic version only. Mr. Pape stated the Society would benefit from the affinity relationship. Ms. Dwyer moved to accept the recommendation of the Member Benefits Committee. Mr. Piluso seconded. The motion passed unanimously.

Membership Report

Mr. Pape presented the membership report noting that as of August 21, 2008, there were 28,621 members compared to 29,098 at approximately the same time in the previous year. The members included the following: 377 total applicants, 39 reinstatements, 35 deaths and 158 resignations. Ms. Dwyer moved to accept report. Mr. Hendler seconded. The motion passed unanimously.

Adjournment

Ms. Wood made a motion to adjourn meeting. Ms. Dwyer seconded. Without objection, the meeting adjourned at 2:15 p.m.