NYSSCPA Board Approves Break-Even Budget
Inaugural Internal Controls Audit, Board Standing Rules and New FAE Task Force Reviewed

By Kate Prouty

NEW YORK—The New York State Society of CPAs’ Board of Directors approved its budget for fiscal year 2004–2005 at its April 21 meeting. Society Treasurer Arthur Bloom announced that, after cutting some initiatives out of the original budget, the Society stands on a break-even budget for next year.

To avoid a deficit, the Society cut two proposed staff positions and decided to postpone twice-monthly publication of The Trusted Professional in favor of monthly publication. The board will revisit the possibility of additional staff positions and more frequent Trusted Professional publication in the fall after the financial results of the summer CPE season are known.

The Society budgeted a nearly $600,000 grant to the Foundation for Accounting Education, whose expenses typically exceed its budget. This is in line with grants made to the Foundation in recent years. On a combined basis, Bloom projects FAE activities to bring in 26 percent of total revenue and 29 percent of total budgeted expense.

The graph supplementing this article further depicts how the Society has budgeted for expense in 2005.

Dotting the Internal I’s

In a continuation of the Society’s efforts to serve as an exemplar of good governance, the board heard and approved a report on the Society’s internal controls conducted by Loeb & Troper.

Loeb & Troper representatives reported that they were “impressed” with the ethical tone set at the top, which is infused throughout the organization.

“By keeping in (close) contact with the employees, the (management’s) sense of strong internal controls is inbred in the organization,” the report stated.

Overall, the Society’s internal controls are “very good” and all of Loeb & Troper’s suggestions—encompassing the organization’s activities, and controls and oversight related to these areas—have been fully addressed by management.

As a result of the audit, the Society made several adjustments, most notably to cash disbursement procedures and to the way it handles membership dues, to increase efficiency and security. The Society plans to have an internal controls audit performed on a regular basis.

Four Standing Rules Approved

The board completed a process begun in 2003 and approved four standing rules, which now must be published to the membership to become effective.

The first rule establishes a selections subcommittee of the board, which is then used to recommend individuals to serve on American Institute of CPAs’ Council and others to stand for election as the two board-designated members of the NYSSCPA Nominating Committee each year. The second rule contains procedures to elect the Nominating Committee designees. The third rule has similar election procedures regarding the AICPA Council recommendations. And the fourth rule codifies roles for the Society’s vice presidents. The text of the standing rules is reprinted in the sidebar here.

“Standing rules are governance tools that are not as set in stone as bylaws,” explained Society Counsel Jim Woehlke. “They govern the way the board conducts its affairs. The Society’s bylaws have permitted board standing rules for quite some time, though none had been approved. Bylaw changes passed in 2003, emphasizing concepts of openness and full disclosure, require the board to publish any standing rules to the membership before they become effective.”

FAE Stays on Task

NYSSCPA directors unanimously approved the formation of a bylaws task force to address several governance changes suggested by the FAE Board of Trustees.

FAE President Jo Ann Golden reported to the board of directors that the FAE trustees had approved in concept some changes to its governance structure. For example, at present the immediate past Society president automatically becomes FAE’s president. The current Society president and president-elect are similarly locked in as the FAE vice president and secretary/treasurer, respectively.

The trustees recommend that in place of this approach, the Society board or membership select the FAE trustees, who in turn elect the Foundation’s officers.

“The FAE trustees believe that the recommendations would help raise the value of service as a FAE trustee, provide additional leadership opportunities for NYSSCPA members and help to better realize and pursue the shared objectives of the two organizations,” read the proposal Golden presented to the board of directors.