The
meeting was called to order at 9:35 A.M. Attendees introduced
themselves, and told about their work with the Society.
This was a joint meeting with the Foundation of Accounting
Education’s Finance Committee, represented by Nancy
Newman-Limata.
Review
of Committee Action Plan
David A. Lifson reviewed the CAP with the committee. David Evangelista
wanted to make sure that the Finance Committee would be
made aware of any changes to the interim financial statements
after the annual audit was complete. Lynn Chambers said
that the May 2002 audit was mailed to the Finance Committee
serving from June 2001 to May 2002, and this practice
would continue. A discussion of the duties for both the
Borrowing and Investment sub-committees was held. Ms.
Chambers noted that there is a current $500,000 line of
credit open with the Bank of New York. Mr. Lifson said
the Borrowing Committee would have to act only if additional
funds were needed. Mr. Lifson requested volunteers for
both committees. The following Finance Committee members
will form the sub-committees:
Borrowing
Committee - Spencer Barback, Jeffrey Hoops and Nancy
Kirby.
Investment Committee - William Aiken, Frank Aquilino
and David Evangelista
Ms. Chambers will be in touch with members of the Investment
Committee in November to set up a meeting with the investment
advisors. A motion to approve the contents of the CAP was
made by Frank Aquilino and was seconded by Spencer Barback.
The motion was approved unanimously by the committee.
September
30, 2002 Financial Statement Review
Mr.
Lifson turned the attention of the committee to discussion
of the various financial statements
-
Balance Sheet- Mr. Evangelista questioned whether the
account receivable amounts were net of allowances, and
Ms. Chambers replied they were. Other members inquired
about the deferred rent, capital allowance, restricted
investments, and the reserve for moving costs. Mr. Lifson
and Ms. Chambers explained what was in each of these
accounts to the committee. Mr. Barback questioned the
absence of deferred revenue for the FAE POP plan. Alan
Schmelkin explained that POP passes expire on August
31st, and any deferred revenue was recognized on the
August financial statement. The current POP plan was
not available until October, resulting in no deferred
revenue in September. Mr. Evangelista began a general
discussion of the deferred membership revenue, and Louis
Grumet discussed the percentage of dues payments received
in the current year. Mr. Evangelista questioned FAE’s
interfund balances, and there was a discussion about
the Society’s support of FAE’s education
programs up to the amount budgeted for the current year.
-
Program Summary and Revenue Summary Reports - Mr. Grumet
said that advertising sales had recently been outsourced,
and the Society believes revenue will increase. Mr.
Evangelista asked if all expenses for the annual leadership
conference had been recorded. Mr. Schmelkin replied
that he is still negotiating charges with the hotel,
and Ms. Chambers said that $140,000 had been accrued
to cover the actual costs. Mr. Evangelista also asked
about the shortfall in investment income. Ms. Chambers
explained the budget had been prepared a year ago, before
the current economic turndown. At this time, Mr. Evangelista
had to leave the meeting. Mr. Grumet was asked for an
explanation of the favorable variances between the actual
results and the budgeted amounts on several lines. Mr.
Grumet said the variances were attributable to the good
performance of FAE and to personnel cutbacks. Mr. Schmelkin
commented on FAE as well, and discussed current seminar
and conference plans. Mr. Barback returned to the issue
of investment income, and all members discussed the
current investment market. Mr. Schmelkin said that $150,000
had been budgeted as revenue from E-Mind, and that the
money may not be received.
- Department
Summary (Expenses)-
Ms.
Nancy Newman-Limata asked some general questions concerning
actual and budget amounts. She pointed out that direct
cost variances had not been footnoted on a detailed
basis, and asked that all department heads be charged
with explaining discrepancies. After some discussion,
it was agreed that staff will give the Finance Committee
information on year-to-date variances over $10,000.
That report will be sent to the committee by the second
week in December.
Budgeting
Process
Mr.
Barback questioned the budgeting process. As part of the
agenda, Ms. Chambers discussed the budget process, beginning
with November phone calls to each of the chapters to discuss
their 2003 – 2004 budgets through the final Board
approval in March. Mr. Barback questioned the company’s
use of allocations and Ms. Chambers explained the timesheet
system used by staff to charge their activities to a particular
budget category. These results also determine the general
and administrative, facility, and data processing allocations.
Cash
Flow History
Mr.
Lifson discussed his original concerns about the company’s
cash flow. The graph is currently on a calendar year basis,
and Mr. Grumet asked that it be changed to a fiscal year
basis. Mr. Lifson will be preparing some modifications to
this graph in the future.
Future
Finance Committee Meetings
There
will be meetings on three Fridays in January (January 10,
January 17, and January 24). The meetings on the 10th and
24th will be held at the Society. The meeting on January
17 will be held at Hays & Company at 477 Madison Avenue.
There
being no further business, the meeting was adjourned at
11:35 AM.
Respectfully submitted,
David Haar, NYSSCPA staff
Approved January 17, 2003
