0) Call to Order

President Kinsella called the meeting to order at 9:03 a.m.

1) Approval of Minutes from Meetings of the FAE Board of Trustees on July 9 and November 21, 2006

Ms. Kinsella asked if anyone had comments or correction to the minutes of the FAE meeting held on July 9, 2006. There being none, Mr. Maier moved to approve the minutes as presented and Mr. Jaffee seconded the motion. The motion passed unanimously.
Ms. Kinsella noted that the November 21, 2006, minutes should be amended to reflect the Board of Trustees’ approval by consensus of 46 Excellency in Accounting Program Scholarships of $2,500 each, for a total of $115,000. Mr. Maier moved to approve the November 21, 2006, minutes as amended, and Mr. Jaffee seconded the motion. The motion passed unanimously.

2) Financial Matters

a. Financial Statements
Mr. Cheung reported total unrestricted net income of $75,277 for the five months ended October 31, 2006, which was $160,514 under budget but $322,894 over the actual figure reported for the same period in the prior year. Mr. Cheung attributed this positive variance to higher FAE course attendance, noting that FAE attracted 881 more courses attendees despite running 18 fewer courses during the comparable period. He credited the Investment Partnership Conference as impacting FAE’s higher course attendance figure during the period. Mr. Schmelkin added that the increase in course registration fees which became effective on September 1, 2006, on top of the increase in attendance, also helped to boost revenue over the prior year; however, he noted that FAE course fees remained competitive with CPE fees charged in other states and far less that those of organizations such as the Practicing Law Institute and the Financial Executives Institute. Total FAE liabilities and net assets were $1,815,914 at October 31, 2006.
Mr. Cheung pointed out approximately $789,000 in overheads. Mr. Schmelkin noted that 50% of course attendees register for courses by credit card through the website, which resulted in increased credit card processing fees as compared to last year. He pointed out, however, that the fees increase was a fraction of what it would cost to hire a registration clerk to process registrations manually. He also added that he represents the Society on a national group that is directing the migrating to a new internet based AM4 system, which handles all membership data and billings, FAE registration, peer review financial matters and CPA Journal subscriptions, among other Society administrative and technical areas.
Mr. Cheung said that current projections indicated FAE would require an additional $97,000 over the originally budgeted contribution from the NYSSCPA of $491,579. He said that staff was anticipating that the success of several upcoming FAE conferences would help to lower the current projected deficit. He mentioned that FAE had already paid back approximately $322,000 in intercompany liability to the NYSSCPA as shown in the balance sheet as of October 31, 2006.

b. Budget Assumptions 2007-08
Mr. Schmelkin presented the FAE budget assumptions for the 2007-08, fiscal year, representing the financial results of an education events calendar which he prepared with others on the FAE staff. He stated that the budgeting process began with suggestions from the Curriculum Committee, supplemented by additions to the calendar for new programs created by vendors as well as repeat versions of popular FAE seminars and those from vendors. Once the calendar was near completion, he developed historical course attendance figures based on actual attendance during the 2006-07, fiscal year. Averages were then used as the basis for estimating registration for 2007-08. Mr. Schmelkin summarized the figures on a location-by-location basis as follows:

Using current gross profit calculations (reflecting fall 2006 programs at current hotel prices and after registration fee increases which became effective September 1, 2006) and applying computed averages by statewide locations, a detailed budget by location was prepared for all seminars.

Conference registration for 2007-08 was estimated at current year’s attendance levels by program. The budget calculations reflect those attendee numbers multiplied by current gross profit figures by location. (FAE Conference Center, NYC hotels, or hotels in Rochester or Albany).

c. FAE Budget 2007-08

Mr. Cheung presented the FAE budget with supporting schedules for 2007-2008. He noted that the budget assumed FAE would earn a gross profit of $1.5 million from seminars, conferences, the trade show and exhibits, and in-firm study sales, but require a contribution from the NYSSCPA of approximately $649,000 in order to break even.

A discussion ensued regarding registration fee increases and the reasons behind a recent trend in which course attendees were selecting more AICPA-owned courses than they had in previous year. With respect to the trend, Mr. Schmelkin noted the market was not supportive of a number of FAE programs that had been successful in prior years. In response to a question about the risks that FAE might not meet budget, Mr. Schmelkin said that a survey was needed to identify what NYSSCPA members and the CPE market were thinking in terms of educational requirements. He suggested that a consultant with expertise in this area be engaged to evaluate the how, where and what of FAE, and to assess the marketplace for suggestions on how these factors could be improved. He suggested that the consultant be identified to start as of June 1, 2007 and anticipated a cost of at least $30,000. He said that staff would solicit bids for the consultant and come back to the FAE Board at a later time with recommendations.

Mr. Jaffee then moved to approve the budget as presented, including a net education expense for the NYSSCPA to support a break even position for FAE of $649,000. Ms. Cohen seconded the motion. The motion passed unanimously.

d. FAE Statistical Report
The following statistical report of FAE events was presented to the Trustees as part of the budget discussion:

	BUDGET	Estimate	From: 6/1/2005	From: 6/1/2004
	2007-08	2006-07	To: 5/31/2006	To: 5/31/2005
NUMBER OF EVENTS
FAE Seminars	100	100	152	158
AICPA  Seminars	71	70	56	73
Other Vendor Seminars	227	201	196	228
Total Seminars	398	371	404	459
FAE Conferences	38	38	46	44
TOTAL EVENTS	436	409	450	503
NUMBER OF ATTENDEES
FAE Seminars	2517	2540	4017	3980
AICPA  Seminars	1915	1400	994	1286
Other Vendor Seminars	2467	2713	3186	3319
Total Seminar Attendees	6899	6899	8197	8585
FAE Conference Attendees	5195	5100	5097	5365
TOTAL ATTENDEES	12094	11999	13294	13950

3) Scholarship Item-Ratification of Award Amounts for Action

The November 21, 2006 minutes were amended to reflect the Board of Trustees’ approval by consensus of 46 Excellency in Accounting Program Scholarships of $2,500 each, for a total of $115,000 (see item #1 above).

4) US Trust Contracts Approval

Mr. Woehlke presented for approval three contracts with U.S. Trust Catering for the following FAE events:

• 2006 Anti-Money Laundering and Counter-Terrorist Financing Conference, which attracted 82 paid registrants and was held on December 6, 2006

• Accounting and Auditing of Broker Dealers and Net Capital: Part 1, which attracted 107 paid registrants and was held on December 7, 2006

• Current Issues in the Audits of Broker Dealer Conference: Part II, which attracted 100 paid registrants and also was held on December 7, 2006

He noted that because registration for the three events was expected to be under 120, they were originally to be held in the FAE Conference Center on the 19th Floor; however, a key organizer of all the events (and chair of one of the committees), seeking a variance from the Trustees’ conference center policy, offered the location of his employer, U.S. Trust, as an alternative. Mr. Woehlke noted that it was disclosed the premises would be made available at no charge to FAE and so no contract was obtained with U.S. Trust. He said, however, that a contract should have been obtained, even though there was no charge, in order to address any liability or insurance issues that could have resulted from the free use of the premises. Mr. Schmelkin added that two corporate sponsors of the events had been presented as part of the off-site conference alternative, including a sponsorship of approximately $10,000.

Mr. Woehlke noted that just before the events, when it was too late to change venues, the conference coordinator presented the legal department with banquet event orders for food services relating to the events, at which point it was ascertained that the total food bill exceeded $10,000, thus requiring FAE officer approval. Because it was too late at that point to obtain the necessary approvals, staff seeks FAE Trustee authorization for payment of the U.S. Trust invoices relating to the food for these events.

Mr. Maier moved to (1) ratify the Executive Director’s decision to proceed with the events, (2) approve the U.S. Trust contracts relating to the events and (3) authorize payment of event expenditures of approximately $16,000. Mr. Jaffee seconded the motion. The motion passed unanimously.

In the ensuing discussion, President Kinsella asked staff to develop a checklist and protocols concerning NYSSCPA committees’ procurement of sponsors, including the timing thereof, and also committees’ use of outside space for FAE educational events. Mr. Schmelkin informed the FAE Board that a Society committee was currently planning a conference in May which envisioned the use of sponsors in order to hold the conference off-site.

In response to a question about the sponsorships for the events held at U.S. Trust, Ms. Davis stated that she would follow up regarding the status of the sponsorships and whether payment had been made.

5) New Jersey State Society 2nd Annual State Convention

Mr. Hendler announced that the New Jersey State CPA Society was holding its 2nd annual state convention on May 9 and 10, 2007, in Atlantic City, New Jersey. He briefly summarized the agenda for the meeting and noted several comparisons with the NYSSCPA’s old annual conference.

6) Scheduling Conference Dates