Call
to Order
A
quorum being present, the meeting was called to order
at 9:00 a.m.
Review
Meeting Minutes
The
committee members reviewed the minutes of the November
3, 2005 meeting. Chair Grusd reiterated that the society’s
net income of the year would be highly affected by
FAE’s operating result through Contribution
to FAE. Mr. Schmelkin responded that there were two
especially successful conferences: Investment Partnership
in November 2005 and Not For Profit in January 2006.
Then Chair Grusd noted on the advantage of recording
budgeted contribution to FAE on a monthly basis instead
of recording the annual contribution in a month. However,
since this was considered as a conditional contribution,
the Society could only book the contribution expense
when the condition was met. Chair Grusd recommended
provide a footnote of the likeliness and amount of
the contribution to the financial statements. To follow
up on the adoption of the Committee Action Plan (CAP)
of the Finance Committee subject to Counsel’s
review, Mr. Grumet verified that the revised CAP was
in compliance with the bylaws. Then Chair Grusd moved
to accept the minutes as modified. Ms. Piazza seconded.
The minutes were unanimously approved.
Review
of Financial Statements
The
financial statements of NYSSCPA, FAE, NYSSCPA Benevolent
Fund and NYSSCPA PAC for the 6-month period ended
November 30, 2005 were reviewed. (These statements
are attached to the original of the minutes.) Chair
Grusd emphasized that the Society’s year-to-date
net income of $ 670,025 was before any contribution
to FAE. The P&L of FAE was still uncertain. Mr.
Grumet noted that FAE appeared promising to finish
the fiscal year within budget and that FAE would not
request more contribution than the budgeted amount
at $ 623,725.
Chair
Grusd continued to review the November 2005 Financial
Highlights of the financial statements. Mr. Pearson
suggested that Dues Receivable be accurately described
as net receivable in the Society’ Statement
of Financial Position.
Chair
Grusd concluded the discussion by noting that the
Society’s financial statements show many favorable
actual-versus-budget variances. He moved to accept
the financial statements. Seconded by Mr. Bronstein,
it was unanimously accepted by the committee.
Review
of Budget
Mr.
Grumet remarked that the staff proposed 3 budget options
for the fiscal year ending May 31, 2007 in fulfilling
revised strategic plan goals and meeting the need
for additional space. (The budget is attached to the
original of the minutes.) He explained that three
months ago AIChE, the sub-let tenants on the 19th
floor, began to look at any cost-saving measure by
taking less space from the Society. At the same time,
Committees had more meeting space need than currently
what four committee meeting rooms could accommodate.
By taking additional space from AIChE, the Society
could build 2 more meeting rooms. Also, the FAE Conference
Center could not accommodate the maximum occupancy
of 150 people due to inadequate food service area
and restroom. As a result, some conferences were moved
to take place in hotels. If the law to require non-practicing
CPAs to comply with the CPE requirement, FAE would
have more courses.
The
option 1 of the budget was planned to add a new position
each to meet the emphasized goals for Recruiting &
Retention and Public Trust--Peer Review. Mr. Grumet
further explained that AICPA was planning to shift
peer review of about 162 medium-size firms to the
Society. We would need a new staff person to handle
the increased volume.
Mr.
Grumet concluded the overview of the budget by stating
that the Society may not need the Peer Review new
staff position until December 2006, but would need
additional space immediately.
Chair
Grusd asked how much the Society would spend for more
space. Mr. Cheung handed out a worksheet computing
the estimated decrease in sublet income at about $
132,000.
Chair
Grusd noted that the capital budget for furniture
and equipment in option 1 should be smaller than that
in option 2 and 3 considering that the purchase of
video conference equipment was contingent upon acquiring
additional space from AIChE. He further suggested
have a narrative on capital budget prepared.
A
committee member questioned how much more facility
expense to be charged directly to FAE if more space
was acquired. Mr. Schmelkin answered that it would
be none. Chair Grusd added that by acquiring more
space FAE would be able to save more hotel costs and
need less contribution from the Society.
Chair
Grusd then continued to review the CPA Journal budget.
He noted that there was $ 250,000 increase in budget
deficit compared to the current year. Ms. Barry and
Mr. Cheung explained that it was due to a $ 100,000
decrease in budget advertising income and $ 150,000
increase in budget overheads.
Mr.
Bronstein commented that the printing cost could be
significantly reduced by sending the production to
China. He would provide more information to the staff.
Ms. Barry was asked to follow up on this cost saving
possibility.
Chair
Grusd asked the reason for increase in budget member
dues from $ 7.3 million in fiscal year 2006 to $ 7.5
million in 2007. Mr. Cheung explained that it was
due to the fee structure, not increase in membership;
senior members were charged at higher rates.
Chair
Grusd concluded the review and discussion of the budget
by stating the need to add the pie charts of budget
expenses and the headcount in the footnote. Mr. Grumet
added that the budget would be revised to consolidate
3 options into 1 budget to include the new Recruiting
staff position for 12 months, the new Peer Review
staff position for 6 months, the additional space
from AIChE and to exclude the Public Awareness Programs.
The next Finance Committee Meeting was agreed to be
held next Friday, January 27, 2006 via conference
call.
Adjournment
There
being no further business, the meeting adjourned at
approximately 10:35 a.m.
Respectfully
submitted,
Adam
Cheung
Approved
by Finance Committee January 27, 2006
