EC07 – A – 0
Call to Order

EC07 – A – 1
Minutes

Approval of Minutes of:

a. November 15, 2006, Executive Committee Meeting

Mr. Riley asked if there were any comments or corrections to the draft minutes of the November 15 Executive Committee meeting. There being none, Ms. Fierstein moved to approve the minutes as written, and Mr. Stubbs seconded the motion. The motion passed unanimously. Mr. Piluso did not participate in the vote.

b. November 17, 2006, Adjourned Executive CommitteeMeeting held via conference call

Mr. Riley then asked if there were any comments or corrections to the draft minutes of the November 17 adjourned Executive Committee meeting held via conference call. There being none, Ms. Fierstein moved to approve the minutes as written, and Mr. Ellis seconded the motion. The motion passed unanimously. Mr. Piluso did not participate in the vote.

c. December 14, 2006, Executive Committee Special Meeting held via conference call

Mr. Riley asked if there were any comments or corrections to the draft minutes of the December 14 special Executive Committee meeting held via conference call. There being none, Ms. Fierstein moved to approve the minutes as written, and Mr. Ellis seconded the motion. The motion passed unanimously with Ms. Cutler and Mr. Lifson abstaining. Mr. Piluso did not participate in the vote.

d. Minutes of December 7, 2006, Board of Directors Meeting for Information Only

Mr. Riley referred Executive Committee members to the draft minutes of the December 7, 2006, Board of Directors meeting, which were distributed at the meeting for information only.

a. SET Tax Update

President Riley gave an update on the SET Tax Proposal, focusing specifically on a recent meeting with Treasury Department staff and an upcoming meeting with Congressional staff.

b. Town Hall Meetings Update

Mr. Riley noted that all sixteen Chapter Town Hall Meetings had been held. He said that all meetings had gone well.

c. FAE Update

Mr. Riley introduced Gail Kinsella, President of the Foundation for Accounting Education, Inc. (FAE), who gave an update on FAE including the January meeting of the FAE Trustees. Ms. Kinsella reported that current projections indicated FAE would require an additional $22,000 contribution from the Society in excess of the budgeted grant. She contrasted this amount with an earlier projected shortfall of approximately $130,000, noting that FAE was well on its way to possibly eliminating the budget shortfall altogether. She also noted several additional highlights of the January meeting as follows:

• FAE approved its budget for the upcoming year.
• A recent review of FAE course ratings indicated that seminars averaged a score of 4.46, while conferences averaged 4.09, respectively, on a scale of one to five.
• FAE’s Scholarship Committee was reviewing the timing of its awards process.
• FAE was formalizing its policies regarding committees’ use of sponsorships to support costs associated with outside hotel venues for committee conferences.
• More curriculum committee activity was scheduled starting in June.
• FAE would be conducting a market survey in June, 2007.

Mr. Riley thanked Ms. Kinsella for the update.

e. NYSSCPA Representative to CAMICO Board

Mr. Riley noted that the endorsement contract between the NYSSCPA and CAMICO Mutual Insurance Company (CAMICO) allows the NYSSCPA to recommend a New York CAMICO policyholder for appointment to CAMICO’s board of directors once a certain premium threshold were met. He said that although the threshold had not yet been met in New York, a CAMICO board position had recently opened due to the death of a board member. CAMICO’s Governance and Nominations Committee voted to recommend Society member Andrew Eassa to the deceased board member’s remaining term, set to expire in June 2008. Mr. Riley said that Mr. Eassa’s continued service after June 2008 for a typical three-year term would be subject to a vote of CAMICO’s membership, pursuant to its normal nominations process.

Mr. Riley noted that Mr. Eassa was a New York policyholder and long-time member (and former chair) of the NYSSCPA Professional Liability Insurance Committee. Mr. Eassa was also a former NYSSCPA Vice President. Mr. Riley expressed his support for Mr. Eassa’s recommendation to CAMICO’s board, and said that CAMICO desired the appointment come with the formal recommendation of the Society pursuant to their contract.

A discussion ensued regarding CAMICO’s compensation of Mr. Eassa during his service as an “at-large” CAMICO committee member. Mr. Riley said that CAMICO typically compensated its committee and board members by paying them fees determined to be representative of a reasonable hourly professional fee, plus expenses, for their respective time, and would similarly continue to compensate Mr. Eassa as a board member. Mr. Riley said that he had no objection to the compensation arrangement and asked for a sense of the Executive Committee with respect to the compensation arrangement. There being no objections, Mr. Lauchert moved to approve the recommendation of Mr. Eassa the CAMICO’s Board of Directors pursuant to the endorsement contract. Mr. Sohr seconded the motion. The motion passed unanimously. Ms. Kincaid abstained. Mr. Piluso did not participate in the vote.

a. Quality Enhancement Policy Committee

President-elect Lifson reported on the Quality Enhancement Policy Committee (QEPC). He noted that the QEPC was continuing its review of CPA education and training and also considering a campaign to recognize the 100,000th New York CPA licensee.

b. 2007 Leadership Conference

Mr. Lifson provided an update on the 2007 Leadership Conference scheduled at the Gideon Putnam Resort in Saratoga Springs, New York in July. He said that the theme of the event would be, “Narrowing all of the Expectation Gaps”, and that its keynote speaker would be eminent psychiatrist Dr. Kerry Sulkowicz. Mr. Lifson said that he would be reviewing concurrent venues in the region for food events or other activities which could reintroduce some of the social flavor once associated with the now-defunct annual conference. Mr. Ellis congratulated Mr. Lifson on the organization of the conference and asked if it would be possible to set aside some time for him to meet with committee chairs. Mr. Lifson asked Alan Schmelkin to take note of this so that they could consider how this might be included in the conference agenda.

Mr. Riley reminded the Executive Committee that it approved the Turning Stone Resort in Verona, New York, to host the 2008 and 2009 Leadership Conferences.

a. Chapters Update

Vice President Fierstein reported on chapter activity, including a recent conference call of chapter presidents held in January. A discussion ensued regarding some of the challenges several chapters were experiencing in terms of member involvement. Ms. Fierstein noted that these challenges were not necessarily limited to the smaller chapters.

b. Recent Society Comments

Vice President Sohr reported that two comments had been issued since last reported at the full Board meeting in December as follows:

• Comments submitted to the Financial Accounting Standards Board by the NYSSCPA Financial Accounting Standards and Not-for-Profit Organizations Committees, chaired respectively by Margaret Wood and Allan Blum regarding, Exposure Draft - Proposed Statement of Financial Accounting Standards Not-for-Profit Organizations: Mergers and Acquisitions, dated January 29, 2007; principal drafters: Sharon Sabba Fierstein, Stephan R. Mueller, Mark I. Mycio, Margaret A. Wood, Allan M. Blum, Allen L. Fetterman and Jeffrey R. Haber; and
• Comments submitted to the Financial Accounting Standards Board by the NYSSCPA Financial Accounting Standards Committee and Not-for-Profit Organizations Committee, chaired respectively by Margaret Wood and Allan Blum regarding Exposure Draft - Proposed Statement of Financial Accounting Standards Not-for-Profit Organizations: Goodwill and Other Intangible Assets Acquired in a Merger or Acquisition, dated January 29, 2007; principal drafters: Sharon Sabba Fierstein, Stephan R. Mueller, Mark I. Mycio, Margaret A. Wood, Allan M. Blum, Allen L. Fetterman and Jeffrey R. Haber.

President Riley commended the authors and committees for their work.

Mr. Riley asked Mr. Grusd whether he and board member Don Kiamie had been able to review facility electricity charges. Mr. Grusd said that they had not yet done so, but would in the near future.

A discussion ensued regarding advertising revenue from The CPA Journal, which was $98,365 under budget. Ms. Barry explained that the budget for journal advertising had been overly ambitious and that prevailing advertising market conditions had affected print advertising in general. A discussion also ensued regarding FAE seminar course revenue, which was $510,042 under budget. Mr. Schmelkin explained that the budget for these programs had been based on ambitious assumptions from targeted marketing done in the prior year. He said that the assumptions had not been fully realized in the current year due to staffing changes, the continuing professional education market and other issues. The committee also discussed peer review outsourcing.

a. Nominating Process Update

Mr. Ellis reported that the Nominating Committee met on January 11, 2007 pursuant to Society bylaws. He presented the Nominations Report as follows:

President-elect                           Sharon Sabba Fierstein
Vice President                           Rosemarie A. Barnickel
Vice President                           John J. Lauchert
Vice President                           Edward J. Torres
Secretary (second term)             Mark Ellis
Treasurer (first term)                   Richard E. Piluso
Director-at-large                         Scott M. Adair
Director-at-large                         Susan M. Barossi
Director-at-large                         Robert L. Goecks
Director-at-large                         Martha A. Jaeckle
Director-at-large                         Gail M. Kinsella
Director (Mid Hudson Chapter)    Ita M. Rahilly
Director (Northeast Chapter)       Suzanne M. Jensen
Director (Queens Chapter)          Thomas Boyd
Director (Rockland Chapter)        David R. Herman
Director (Utica Chapter)              Thomas M. VanHatten

b. Committees Update

Mr. Ellis gave a brief update on committees, noting that he was now communicating on a weekly basis with staff about committee matters.

a. Legislative and State Board of Accountancy Update

Mr. Grumet briefed the Executive Committee on legislative and regulatory matters.

b. Member Benefits Program Update

The committee was referred to the agenda materials for this update.

c. COAP Update

Mr. Grumet mentioned that two new FAE COAP Program venues were anticipated, one at Baruch College and the other at St. John’s University. With regard to the latter’s program, he noted that York College had been invited to participate in program efforts.

d. Trade Show Update

No report was given.

e. 19th Floor Improvement Update

Mr. Schmelkin noted that the architect for the 19th floor improvement project was in the process of finalizing plans to expand the restrooms. Mr. Grusd added that the project would entail $55,000 to $80,000 more than budgeted for the architect’s fee and construction costs, but that a budget amendment was not required because the funds were available in the capital budget.

f. Report on the Industry Initiative

No report was given.

Mr. Woehlke presented a staff proposal to cap the group-term life insurance coverage provided by the Society to staff at $200,000 of coverage, while permitting staff members to purchase additional insurance if they so desired at their own cost, up to the limits available in the policy. The Executive Committee asked staff to run some additional numbers on the proposal and discuss the matter further at the May Executive Committee meeting.

1) The Nominating Committee is encouraged to obtain written statements from each candidate for President Elect in which the candidate outlines his or her views on issues and initiatives that are expected to arise during his or her term. For instance, the candidate should be asked the challenges they anticipate the Society will face and what actions they believe the Society should take to meet those challenges.

2) The Nominating Committee is strongly encouraged to interview candidates for President-Elect and may interview candidates for other positions as well; provided that all candidates for a given office, whether self-declared or recruited, are included in the interview process.

3) At its discretion, the Nominating Committee may nominate a person to serve a second term as Vice-President so long as there is a one year hiatus between such service. The maximum number of terms served shall be two.

Mr. Woehlke provided background with respect to proposed protocols. With respect to proposed protocol three, Mr. Woehlke noted that the per the Bylaws Article VIII, Paragraph 1, the sentence “Except for the Secretary and the Treasurer, a member may not succeed to the same elected officer position; the Secretary and the Treasurer may serve a maximum of two terms” was interpreted to the Nominating Committee as precluding any person who once served as a Vice-President from again being nominated as a Vice-President no matter the period of time between such service. He said, however, that the Nominating Committee disagreed with such a strict reading of the bylaws.

Executive Committee members agreed by consensus to move forward the first two proposed protocols to the full Board for action and to direct the bylaws task force to include in the bylaws exposure process an item to permit vice presidents to again serve as vice presidents after a one-year hiatus.

Mr. Lauchert, Chair of the Bylaws Task Force, gave an update on the bylaws review process.

Mr. O’Leary summarized an amendment to the Professional Ethics Committee procedures manual outlining alternative procedures when a Society member has been sanctioned by an NYSSCPA-approved regulatory agency. A copy of the alternative procedures are appended to the minutes as Attachment A.

Ms. Cutler moved to approve the procedures, and Ms. Fierstein seconded the motion. The motion passed unanimously.

• In-Class (live) CPA review courses
• Online CPA Review
• CD-ROM self study CPA Review Course

Mr. Grusd presented the proposed budget for the 2007-2008 fiscal year. He began his presentation with a summary of the process by which the budget was developed by the Finance Committee. He said that the Finance Committee worked from a number of budget assumptions including a goal of building a cash reserve of $2 million by the year 2013. He said that 2013 was when the Society’s current office lease was set to expire and the organization may potentially require the reserve to fund its relocation. Other notable considerations included the deferment of a phone system upgrade and a 30% increase in peer review program fees. He ended his presentation by noting that the budget had the full recommendation of the Finance Committee.

Ms. Cutler then moved to recommend full Board approval the 2007-2008 budget and to forward the budget as presented to the Board for consideration in April. Ms. Fierstein seconded the motion. The motion passed unanimously.

Mr. Pape presented the Membership Report as of February 7, 2007 which included 238 new members (including 136 associate members), 447 reinstatements, 10 resignations and 17 deaths. These changes reflected a total membership of 28,371 as compared with 28,946 at approximately the same time the previous year.

Mr. Falbo moved to approve the Membership Report, and Mr. Lifson seconded the motion. In the ensuing discussion, Mr. Pape was asked about membership terminations and he reviewed for the committee the dues collection and termination process. In response to a question regarding chapter officer involvement in attempts to forestall terminations, Mr. Pape said that although a number of chapter representatives had volunteered in the past with membership retention efforts, many were nonetheless hesitant to assist in dues collections. Mr. Riley noted that he often made a point of contacting terminated or dues-delinquent members who he knew personally, in case the lack of payment was merely an oversight. After discussion, the motion passed unanimously.

• $4 million in total premium
• 1,800 insured CPAs for 2007