Finance
Committee Meeting Minutes
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
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