0) Call to Order

After a call of the attendance, President Kinsella noted that a quorum was present and called the meeting to order at 10:03 a.m.

1)Approval of Minutes from meetings of the FAE Board of Trustees on September 7, 2006, September 13, 2006 and September 21, 2006

Ms. Kinsella asked if anyone had comments or correction to the minutes of the FAE meetings held on September 7, 13 and 21, 2006. There being none, Mr. Bloom moved to approve the minutes as presented and Mr. Jaffee seconded the motion. The motion passed unanimously.

2) Financial Statements through September 30, 2006

Ms. Kinsella began by summarizing the categories by which the financial statements were broken down, noting the high level of detail and information tracked with respect to FAE operations and finances. She then turned the floor over to Adam Cheung, who walked the Trustees through the financials.
Mr. Cheung reported total unrestricted net income of $125,739, which was $176,522 under budget and a $89,728 positive variance over the actual figure reported for the same time period in the prior year. FAE gross profit was $759,807, which was $174,912 under budget, reflecting a $43,183 positive variance over the prior year’s actual figure for the same time period. Total assets stood at $1,810,262. Mr. Cheung pointed to a deficit fund balance of approximately $577,000, which had been reflected on the financial statements for several years.
Mr. Cheung identified some of the reasons for the negative budget variance. He said that the number of FAE course attendees had generally increased; however, the use of POP passes and membership discounts had an inverse impact on course revenues. Mr. Schmelkin also noted that the traditional, two-day FAE accounting and auditing update course did not proceed as planned because of an issue that arose with respect to the course writer/instructor. Instead, FAE had to engage an outside vendor at an additional cost and offer only a one-day course, thus impacting course revenues by approximately $40,000.
A Trustee asked staff to address steps that would be taken to lower the approximately $175,000 negative variance. Mr. Cheung began by noting that staff was currently projecting an approximately $106,000 unfavorable variance for the 2006-2007 year overall, based on current data. He noted that this would be in addition to the currently budgeted contribution from the NYSSCPA, which was $491,579. Mr. Schmelkin then said that the Investment Partnership Conference, which had been conservatively budgeted to attract 500 attendees, was anticipated to attract closer to 600, thus bringing in more revenue. He also pointed to a major change in the New York State Education Department’s ethics educational requirement for CPAs, which could have a positive impact on FAE’s ability to offer more diverse ethics CPE to an even larger audience. He mentioned that the NYSSCPA now had a fully-staffed marketing department and could pursue on a larger scale several targeted marketing initiatives which had been successful in the prior year. And lastly, he observed that staff had been reassigned to in-firm sales, which was beginning to show more growth over last year. In response to a question, Mr. Kaplan noted that since June 1, 2006, approximately 25 days of in-firm FAE classes had been conducted, attracting an average of 25 persons per class. He said that ethics was a very popular topic for in-firm courses.
A Trustee suggested several ways to address FAE overhead costs, including 1) confirming course registrations by e-mail instead of U.S. mail; 2) sub-leasing classroom space during FAE’s non-busy season; and 3) offering free CPE at the Trade Show in order to increase foot traffic and potentially attract more exhibitors. It was also suggested that FAE report on an August 31 fiscal year-end and re-evaluate its policy of running certain courses at a loss. With respect to the latter suggestion, Mr. Grumet provided background regarding FAE’s policy to run courses at a loss, which was instituted to address member dissatisfaction and complaints over frequent course cancellations, particularly in regions where it could be more difficult to obtain CPE. Mr. Grumet encouraged FAE Treasurer Jaffee to attend the NYSSCPA finance committee meetings during the upcoming budgeting process and to raise a number of these issues.
The Trustees briefly discussed the coordination of NYSSCPA chapter CPE events. Mr. Grumet also updated the Trustees on a proposal to dissolve the NYSSCPA Benevolent Fund and transfer its assets to the FAE scholarship fund. He noted that FAE’s corporate purpose had been amended as a first step in the process to initiate such a transfer.
Ms. Cohen moved to accept the FAE Treasurer’s Report, and Mr. Kahn seconded the motion. The motion passed unanimously.

3) FAE Curriculum Committee

a. Schedule of Events for 2007 – 2008

Mr. Schmelkin reported on the FAE Curriculum Committee, which had been formed as a standing FAE committee to include representation from the following NYSSCPA committees: Accounting and Auditing Oversight, Tax Division Oversight, Chief Financial Officers, Small Firms Practice Management, and Medium and Large Firms. Mr. Schmelkin then distributed and summarized a listing of the committee’s course recommendations broken down by: topic, whether the course had been added to the FAE course schedule, course explanation and course developer where applicable. Mr. Jaffee, who was a participant on the committee, requested that the listing be shared with all those who participated on the committee and staff agreed to share the list.

b. Budget Preparation for Fiscal Year 6/1/2007 – 5/31/2008

Mr. Schmelkin said that he was reviewing a list of programs that will be offered by FAE vendors in the upcoming 2007-2008 education year. He noted that NYSSCPA members had been selecting AICPA-developed programs more frequently. This contrasted with the last several years when the number selecting AICPA-developed courses had been dropping steadily. He then summarized the process by which the FAE budget was developed, including an evaluation of each course’s success rate by location, among other factors, and the anticipated gross profit for each event. He added that function costs, contributions to NYSSCPA overheads, administrative costs and other data were then factored in as part of the budgeting process.

Mr. Schmelkin mentioned that he, NYSSCPA President Thomas Riley and Mr. Grumet had met with State Board for Public Accountancy Executive Secretary Daniel Dustin regarding ethics CPE. He noted that Mr. Dustin had agreed there was a need for more case studies and content for more advanced ethics CPE.

4) Scheduling Dates for FAE Conferences

Mr. Kahn summarized a concern that some members of the NYSSCPA Tax Division Oversight Committee (TDOC) expressed regarding potential competition between their committee’s conference and another FAE tax program, given the close proximity of the events’ dates and similar subject matter. Mr. Schmelkin summarized steps taken by staff to avoid program conflicts and overlaps, including a review of prior years’ course registration data to determine how many distinct individuals attended both potentially-competing programs. He then discussed two specific examples.

In the case of a concern expressed that the Investment Partnership Taxation Conference and Auditing Conference were set for the same day, Mr. Schmelkin noted that former conference’s planning committee had changed the date of its conference to the same date as the Auditing Conference due to the need to secure certain speakers who were not available at any other time. Mr. Schmelkin had run an analysis to determine how large the customary overlap was between the two conferences and reported that the number of individuals who had previously attended both conferences ranged from 1 to 3 over the last 6 years. The Investment Partnership Taxation Conference ultimately drew 582 registrants, and the Auditing Conference drew 105, which reflected customary levels of participation.

The second example was the one Mr. Kahn had mentioned. In that instance, a long-time CPE speaker had approached Mr. Schmelkin with the concept of a conference, but the only date he could do it was within two weeks of the Annual Tax Plenary Conference planned by TDOC. Mr. Schmelkin had compared the two agendas and found minimal overlap and allowed the two events to proceed. The TDOC conference had a small early sign up and the committee had become concerned with the competition between the two conferences. In the end, the Annual Tax Plenary Conference achieved customary levels of participation and the other conference drew 50 attendees. Mr. Schmelkin had run an analysis of the customary attendees at the Annual Tax Plenary Conference and found that only two had chosen to attend the second conference instead of the TDOC conference. Mr. Schmelkin also noted that the events had been marketed with substantially different mailers, with all Plenary Session announcements distributed far in advance of the other Conference. Finally, he drew attention to the higher price for the later conference and the special $100 discount for Society members who were members of any Tax Committee.

A discussion ensued regarding ways to handle committee members’ perceptions of conflicts in course scheduling. President Kinsella suggested that the issue be revisited at the January FAE Board meeting or at the December meeting if time allowed. The Board agreed by consensus.

A discussion ensued regarding ways to increase trade show exhibition floor traffic, such as providing free show CPE, allowing FAE POP pass holders to use their POP passes for show CPE, raffles and the possibility of engaging a keynote speaker.