Chapter Purpose and Functions
What is the purpose of the chapters?
Chapters are the vehicles by which members of the New York State Society of Certified Public Accountants (NYSSCPA) who share a common geographical area may become acquainted with each other, exchange views, and work toward the advancement of the profession as a whole. One of the most important ways of doing this is through Chapter professional meetings. Chapters provide a local connection to the State Society.
What is the legal status of a Chapter?
Chapters are part of the, NYSSCPA, a New York State nonprofit corporation. They are created by the NYSSCPA Board of Directors, which also has the authority to dissolve Chapters. Chapters have no legal status as independent bodies. Each Chapter, as well as each Chapter’s governance structure, is an extension of the NYSSCPA. This structure ensures that the limited liability afforded to the NYSSCPA by virtue of its corporate status extends to members active in Chapter activities
As a result, all property in the custody of the Chapter (“Chapter property”) belongs to the NYSSCPA. At the termination of a Chapter, any Chapter property in the custody of Chapter members is returned to the NYSSCPA. The checking account used by the Chapter is an account owned by the NYSSCPA, which is why banks are required by the NYSSCPA to use forms that are appropriate for corporate accounts.
Does the Chapter have bylaws? Can it amend them?
There are Chapter bylaws that govern the operation of all Chapters. Chapter bylaws are actually administrative rules set down by the NYSSCPA Board of Directors to govern the Chapters. According to Article X of the Chapter bylaws, amendments to the bylaws can be offered by a Chapter Executive Board for consideration by the NYSSCPA Board of Directors.
Are Chapters represented on the statewide Board of Directors?
Yes and no. Yes, each Chapter is entitled to one person on the statewide Board of Directors. However, this person is nominated by the NYSSCPA Nominating Committee from a list presented to the Nominating Committee by the Chapter, is elected by the entire membership of the Society, and, therefore, represents all Society members, as does each member of the NYSSCPA Board of Directors. So, once a Chapter representative is elected to the NYSSCPA Board of Directors, her fiduciary responsibility is owed to the statewide organization and not to the chapter.
Who is a member of the Chapter?
Members do not pay dues to belong to a Chapter. Their attendance and participation are completely discretionary. However, for the purpose of organizing and marketing Chapter programs, the NYSSCPA maintains a database and assigns each member in good standing to a Chapter. Chapter membership is defined in the NYSSCPA bylaws as the location of a member’s office or where she is employed. However, members may designate any Chapter as their preferred Chapter.
Chapter Governance
How is the Chapter governed?
An elected Executive Board, composed of officers and at-large board members, governs each Chapter and provides overall policy and program direction.
How many members are on each Chapter Executive Board?
Section 4.1 of the Chapter bylaws states that a Chapter Executive Board shall consist of five officers:
- President
- President–elect
- Vice President
- Secretary
- Treasurer
A maximum of eight elected board members are selected from the Chapter membership, depending on the membership of the Chapter and the immediate Past President. The number of elected members shall be no more than four, if, on the previous February 1, the Chapter had 50 members or fewer, or no more than 8, if, on the previous February 1, the Chapter had 50 or more members.
What are the powers and duties of a Chapter Executive Board?
Articles I and V of the Chapter bylaws state that the Chapter Executive Board shall adopt a budget to present to the Society Board of Directors for approval. The Executive Board is empowered to direct and administer all Chapter programs. The bylaws provide specific duties to each Chapter officer and to the Executive Board in Article V. The Executive Board may not direct the Chapter to perform any functions or activities that are at variance with the policies and procedures adopted by the NYSSCPA Board of Directors.
May a non-CPA member serve as a Chapter officer or on the Executive Board?
No. As stated in the NYSSCPA bylaws, an associate member cannot serve as a Chapter officer or Board member. The bylaws provision is listed below:
Associate Industry/Non-CPA Employee.
A person not employed in a CPA firm nor a company described in sub-paragraph (4) of this paragraph, but who has a bachelor’s degree and works full-time in any of the following categories shall be eligible to apply for membership as a non-CPA employee:
(a) as an educator teaching accounting or accounting-related courses at an educational institution, college or university; or
(b) as a non-CPA professional working in the government, industry, non-profit organization, financial, legal or banking services.
Such membership shall terminate at the end of the Society’s next fiscal year immediately following such time as the employment relationship terminates.
(b) All associate members must be sponsored by at least one CPA member, except that student members may substitute the endorsement of an accounting department professor for CPA member sponsorship.
(c) From time to time, the Board shall establish the criteria by which associate members evidence their qualification for membership.
(d) Associate members shall not have the right to vote on issues requiring the vote of the Society’s membership.
(e) Associate members shall not be eligible to serve in the following capacities:
(1) Director.
(2) Officer.
(3) Member of the nominating committee.
(4) Member of the audit committee.
(5) Chapter officer.
(6) Committee chairperson, unless the Board acts to provide that an associate member may serve as chairperson for a specified committee.
(f) Except as otherwise provided herein, an associate member is eligible for all Society services and benefits.
May associate members be elected to the Chapter Executive Board?
No. Associate members are not eligible for membership on the Chapter Executive Board.
What are the terms of office for members serving on the Chapter Executive Board?
Section 5.1 of the Chapter Bylaws states that chapter officers serve for one year. This term runs for the NYSSCPA fiscal year, June 1 through May 31. The term of an officer designated to fill a vacancy is to be the unexpired term of his or her predecessor. As noted, the chapter president serves on the chapter board for the fiscal year immediately following his or her service as president. Other members of a Chapter Executive Board serve two-year terms, also coinciding with the NYSSCPA fiscal year. Executive Board terms are to be staggered to promote continuity.
How is the Executive Board selected?
Section 6.1 of the Chapter bylaws states that a Chapter Nominating Committee should select both the officers and the at-large board members. The members of the Nominating Committee are selected by the Chapter membership at a meeting held at least two months, but no more than four months, before the Chapter’s Annual Meeting. Notice of the meeting is required to contain an announcement that the members of the Nominating Committee will be elected at the meeting. Nominations for members of the Nominating Committee are made from the floor at the meeting. If more than three persons are nominated and seconded, an election is conducted by written ballot, and the three nominees receiving the highest number of votes are declared to be the elected members of the Nominating Committee.
What is the composition of the Nominating Committee?
Section 6.1 of the Chapter bylaws states that the Nominating Committee shall consist of three members, none of whom may be a chapter officer, a member of the Chapter Executive Board, or a member of the Nominating Committee for the preceding fiscal year. A member of the Nominating Committee serves until the close of the fiscal year in which she was elected or designated. The nominating committee elects one of its members as chairperson. Each Chapter’s Nominating Committee should be instructed to evaluate all officers’ performance of their responsibilities for the past year, including their attendance at key meetings.
When are Executive Board nominees elected?
The Executive Board is elected at the Chapter’s Annual Meeting, which can be held in either April or May.
What are the standing committees of the Chapter, as directed by the bylaws?
Section 8.4 of the Chapter bylaws lists the following standing committees:
- Committee on Membership
- Committee on Meetings
- Committee on Public Relations
- Committee on Budget
- Committee on CPE.
In addition, as part of the NYSSCPA strategic goals, all Chapters are now required to have a NextGen Committee.
May the Chapters create other committees?
Yes. The Chapter Executive Board may create other Chapter committees as it deems desirable from time to time, and it may specify the number of members comprising each such committee.
May a non-CPA member chair a committee?
No, an associate member cannot serve on a Chapter committee. However, he can attend committee meetings and functions.
May a nonmember server on a Chapter committee?
No, one must be a member in order to serve on a Chapter committee. However, nonmembers can attend committee meetings and functions.
When does the Chapter fiscal year begin?
The Chapter fiscal year is the same as the fiscal year of the NYSSCPA. It begins on June 1 and ends on May 31.
What is the due date of the Chapter annual budget?
Section 9.2 of the Chapter bylaws requires that the Chapter submit its proposed budget for the following fiscal year by the first week of December each year.
What happens after the proposed budget is presented to the NYSSCPA?
The proposed budget is reviewed by the NYSSCPA Budget Committee and is subject to revision, including additions or deletions. Chapter budgets are incorporated into the NYSSCPA budget, which ultimately must be approved by the NYSSCPA Board of Directors.
Who are the authorized signers of Chapter checks?
Section 5.10 of the Chapter bylaws permits only the Chapter President, President-elect, the Chapter Treasurer, and the Society Executive Director to be authorized signatories of Chapter checks.
Whom do we contact when we need insurance certificates for Chapter events?
If a facility that you use needs insurance certificates from the Society to conduct a Chapter event, contact your Chapter’s staff liaison.
Chapter Governance Policies
Conflict of Interest
Are the NYSSCPA’s Chapters affected by the Society’s conflict of interest policy?
Yes. The Society’s Board approved a conflict of interest policy that requires disclosure of any conflicts of interest that volunteer leaders and employees might have. Recognizing that such disclosures can be intrusive, the Board divided the volunteers into two groups, requiring only minimal disclosure from the first. Members of a Chapter’s Executive Board (including Chapter officers) are included in Group I.
Group I disclosure requires that the volunteer sign a disclosure statement annually, confirming that the volunteer—
1. Read the Conflict of Interest Policy, which is available on the website here
2. Has no conflicts, other than those listed, and
3. Agrees to recuse him- or herself from any Society-related decisions in which he or she believes there may be a conflict of interest.
What is a conflict of interest, under the policy?
According to the policy, “An actual or potential Conflict of Interest occurs when a person identified in Group I or Group II is in a position to influence a decision that may result in a personal gain for that person or for a Related Party or Affiliated Organization (other than the Society) as a result of business dealings with the Society.”
What are some examples of conflicts of interest?
The policy lists a number of conflicts that serve as examples. These illustrations are repeated here for your reference.
The following scenarios are examples of Conflicts of Interest covered by the NYSSCPA Conflict of Interest Policy. THE EXAMPLES ARE NOT AN EXHAUSTIVE LIST, BUT MERELY SERVE AS ILLUSTRATIONS OF CONFLICTS THAT MUST BE DISCLOSED UNDER THIS POLICY.
Example 1
Mr. Smith is under consideration by the FAE President to replace an outgoing member of the FAE Board of Trustees, but unknown to the FAE President, Mr. Smith is a paid speaker at FAE events. Mr. Smith must disclose to the FAE President (or other presiding officer, if applicable) that he is receiving income from FAE and must either (1) agree to cease receiving payment to speak at FAE events during his term as a FAE trustee or (2) decline to serve as a FAE trustee.
Example 2
Ms. Jones is very active as a peer review team captain and has been elected to serve as a member of the Board from a Chapter. A proposal has been included in the NYSSCPA Board agenda that the NYSSCPA Board should recommend a bylaws change that would require peer review of all Society members. Ms. Jones should inform the Presiding Officer of the Board meeting that she would stand to gain financially if the proposal is passed. The Presiding Officer should then determine if Ms. Jones will be permitted to participate in the discussion or vote on the matter. If Ms. Jones disagrees with the determination of the Presiding Officer, she may raise a parliamentary “question of privilege” appealing the Presiding Officer’s decision, to be decided by the entire Assembly.
Example 3
Mr. Baker, a member of the NYSSCPA Executive Committee, is married to a partner in a company that owns a facility under consideration to be the location for the Governance Forum. Mr. Baker should notify the Presiding Officer before the discussion begins, on where to locate the Governance Forum.
Example 4
Ms. Able’s firm has as an audit client a company seeking to manage an NYSSCPA/FAE trade show. Ms. Able, who is a member of the FAE Board of Trustees and NYSSCPA Board of Directors, should notify all applicable Presiding Officers before the discussion begins on whether to hire the audit client as trade show manager.
How does one recuse oneself?
In the event you believe that you may have a conflict of interest regarding a decision being made by the Executive Board, you should (1) notify the Chapter president that you may have a conflict and (2) tell the President that you wish, at a minimum, to not discuss or vote on any resolutions related to the potential conflict. Whether or not you tell the President that you wish to not participate in the decision process, the President is within his or her rights to ask you to not participate in the discussion or vote. Depending on the conflict, he or she may even ask that you leave the room during the discussion and the vote.
If you are the Chapter President, you should notify the Executive Board that you may have a conflict of interest and are turning the meeting over to your vice president to conduct that portion of the meeting. The most prudent course is then to leave the meeting so as not to influence the outcome of the discussion or the vote.
Contract Review Policy
For several years all Society contracts, except those pertaining to Chapter activities, have been reviewed for legal and other issues and signed either by the President or the Executive Director or their designee. The NYSSCPA Board has concluded that this policy should be extended to certain contracts currently entered into by Chapter leaders.
Why was the contract review policy created?
The policy was created in order to provide:
• Protection of Chapter Leadership: It is important to limit the liability exposure of and financial risk to Chapter leaders and their firms, relating to NYSSCPA events.
• Limitation of Society Risk: The Society’s legal and business risks should be consistently analyzed and assessed regarding all obligations, not only those incurred at the statewide level.
What type of contracts should be submitted to the Society’s Counsel Office for review?
Contracts expected to result in total expenditures of $10,000 or more should be submitted. This includes contracts that require the Society or someone signing on the Society’s behalf to:
• indemnify” or “hold harmless” the other party to the contract; or
• either obtain insurance, or provide proof of insurance, to cover the contract’s subject matter.
Such contracts might:
• relate to rental or other use of a facility, including, but not limited to, restaurants, hotels, or private clubs, provided that the total contract expenditures are $2,500 or more; or
• require the signer or his or her firm to sign in his or her personal capacity; or
• provide for damages (e.g., cancellation penalties).
Chapter officers are welcome to submit any additional Society-related contracts for review that they wish or contact the Counsel’s department at any time if they have questions about whether a particular contract falls under any of the above categories. For purposes of this policy, contracts include oral as well as written agreements. Failure to comply with this policy may result in the Society’s refusal to reimburse the expenditure.
Do event permits need to be reviewed by NYSSCPA Counsel?
Yes, all permits for the use of space for an NYSSCPA program should be submitted for review and signing.