| Mr.
Cohen stated that the Audit Committee met on August 31,
2010. The members of the committee were
reminded of their duties and responsibilities with respect
to the audit. They then proceeded to review the SAS 114
report and its governance requirements. Ms. Wood, Mr. Piluso,
Mr. Falbo and Ms. Barry were all in attendance or participated
via phone. They also reviewed and commented upon the SAS
115 letter, and then held an executive session.
Mr.
Cohen then asked Mr. Blum to discuss the financial statement,
SAS 114 letter and SAS 115 letter. Mr. Blum stated that
the
Audit this year went well. He complimented the Fiscal Department
on their hard work and organization. He further noted that
NYSSCPA staff provided the auditors with properly reported
financial materials. He noted that the only major changes
this year to the Financial Statements is that they will
be combined statements for the Society and related entities
rather than consolidated statements. The Audit commenced
in late June with introductory procedures. The Auditors
were
on site in mid-August to complete their basic field work.
With
respect to the SAS 114 communication, Mr. Blum noted
that the core areas had been properly presented. He stated
that the scope of the audit was to issue an opinion on
the Society and related entities. He noted that the Benevolent
Fund had been merged into FAE, and that the associated
cash
accounts had been moved over to the Foundation. The tested
core areas including risk assessment, funds assessment,
and material misstatements. Mr. Blum informed the members
of
the other services besides the audit that L&T provides
which includes the audit of the 401K plan, and all relevant
tax filings. Revenues and receivables are important areas
that the audit focused on and they reported that those
areas were recorded properly. Expenses were also examined,
and
staff reporting of expenses was noted to have shifted
from a strategic report to a historical report.
Mr.
Blum noted that they would be issuing an unqualified
opinion on the financial statements. Their management
letter would note no material weaknesses. A separate
letter noted
as observations and recommendations was issued.
He
reported that the report was being issued in accordance
with the
auditing guide, and that no unusual transactions
were reported this year, , and no significant audit
adjustments will be made this year. Mr. Blum noted
that there will
be an adjustment to the prior year based upon the
proper recording
of capital lease obligations. There were no retention
issues or management issues to report. Also, no illegal
acts were
found. There were no material weaknesses in the internal
controls.
Mr.
Blum provided an overview of the changes that were made
to the financial statements based upon
the recommendations
of the Audit Committee. Mr. Adair raised a question
about the appropriate level of detail in the footnote
dealing
with
the restatement disclosure. Mr. Blum noted that
the adjustment was not included in the SAS 115 letter
because management
found and adjusted the capital lease issue prior
to the audit; therefore, it was not a weakness
or
a deficiency.
Furthermore,
it had a negligible effect on the statements of
activities and resulted in the grossing up of assets
and liabilities
Mr.
Adair also asked if the statement of financial position
would be classified. It was noted
that
it would be taken
into consideration for next year’s financial
statements.
Mr.
Sohr asked whether all of the investments in Note 2 were
level 1 investments,
and if so,
the
note was
a bit
over inclusive.
Mr. Blum responded that yes, all current investments
are level 1, but that not-for-profit corporations
do not always
understand the different levels of investment,
so that additional information is provided
in the note.
Mr.
Sohr also noted
that disclosure regarding all of the investments
being level 1 was in footnote 4.
Mr.
Blum then went on to present his recommendations as contained
in
the supplemental management
letter. He noted
that there
were no materials weaknesses.
Ms.
Wood thanked Mr. Cohen and Mr. Blum for their report.
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