Audit Committee Minutes 11-09-07

Mcraig

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MINUTES AUDIT, CERTIFICATION & CREDENTIALS COMMITTEE MEETING THFRIDAY, NOVEMBER 9 , 2007 INTERCONTINENTAL THE BARCLAY, NEW YORK, NEW YORK CALL TO ORDER Meeting was called to order by Chair Gene Rupnik at 8:00 a.m. ROLL CALL Roll call was conducted. The following members were present: MEMBERS PRESENT AH&LA STAFF Gene Rupnik (Chair) Joori Jeon Gregory A. Bryan Roy Kennington Thomas Corcoran, Jr. Joseph McInerney Don Johnson Min Zhao Ilene D. Kamsler Joseph Kane GUESTS Joe Martin Banks Brown Richard C. Nelson Drew Smith Paul Riedel Robert Slater Robert Steele, III MEMBERS ABSENT Montine McNulty Gerald W. Petitt ANTI-TRUST STATEMENT Banks Brown drew the group’s attention to the AH&LA Antitrust Statement, attached to the agenda, and explained the importance of this policy. APPROVAL OF MINUTES Upon a motion duly made, seconded, and passed, it was VOTED: to approve the minutes of the June 11th, 2007 meeting held in Nashville, Tennessee. AH&LA CEO REPORT President and CEO Joseph McInerney discussed the affairs of AH&LA and its affiliates. He pointed out that AH&LA’s membership has increased by 3.1% through October 2007. Three additional sales people were hired to sell membership in the direct member and partner states. Thirteen states signed the membership sales agreements. A membership campaign was launched to emphasize the importance of 1dual memberships in AH&LA and partner ...

Informations

• Publié par: Uffe
• Nombre de lectures: 53
• Langue: English

Extrait

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MINUTES

AUDIT, CERTIFICATION & CREDENTIALS COMMITTEE MEETING

FRIDAY, NOVEMBER 9

TH

, 2007

INTERCONTINENTAL THE BARCLAY, NEW YORK, NEW YORK

CALL TO ORDER

Meeting was called to order by Chair Gene Rupnik at 8:00 a.m.

ROLL CALL

Roll call was conducted.

The following members were present:

MEMBERS PRESENT

AH&LA STAFF

Gene Rupnik (Chair)

Joori Jeon

Gregory A. Bryan

Roy Kennington

Thomas Corcoran, Jr.

Joseph McInerney

Don Johnson

Min Zhao

Ilene D. Kamsler

Joseph Kane

GUESTS

Joe Martin

Banks Brown

Richard C. Nelson

Drew Smith

Paul Riedel

Robert Slater

Robert Steele, III

MEMBERS ABSENT

Montine McNulty

Gerald W. Petitt

ANTI-TRUST STATEMENT

Banks Brown drew the group’s attention to the AH&LA Antitrust Statement, attached to the agenda, and

explained the importance of this policy.

APPROVAL OF MINUTES

Upon a motion duly made, seconded, and passed, it was

VOTED

: to approve the minutes of the June 11th, 2007 meeting held in Nashville, Tennessee.

AH&LA CEO REPORT

President and CEO Joseph McInerney discussed the affairs of AH&LA and its affiliates.

He pointed out that AH&LA’s membership has increased by 3.1% through October 2007.

Three additional

sales people were hired to sell membership in the direct member and partner states.

Thirteen states signed

the membership sales agreements.

A membership campaign was launched to emphasize the importance of

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dual memberships in AH&LA and partner state associations.

AH&LA’s officers or staff attended 31

partner state meetings, 40 industry and other association events, and eleven school functions.

AH&LA

enhanced its visibility in the media.

In addition, AH&LA is forming a Green Task Force to develop a

comprehensive sustainability and greening initiative designed expressly for the hotel industry.

AH&LA assisted the Hispanic Hotel Owners Association and the National Association of Black Hotel

Owners, Operators and Developers in developing benefits for their members through both the use of the

Educational Institute’s custom textbooks and exposure at AH&LA events.

The Women in Lodging

Council sent letters to universities across the country, offering speakers.

AH&LA’s Government Affairs staff has made a significant impact on Capitol Hill and with the

Administration.

They have deepened AH&LA’s involvement with coalitions in order to more effectively

address issues concerning the industry.

They attended or sponsored over 70 fundraisers for various allies in

Congress and for Congressional candidates.

The HotelPAC and the Legislative Readiness Fund have

raised $545,000 this year

The Educational Institute is updating The Supervisory Skill Builders Series to include diversity content.

It

is also creating a Portable Lesson Plan on Diversity.

AH&LA AND AFFILIATES FINANCIAL REPORTS

CFO Joori Jeon presented the Committee with AH&LA and its affiliates’ financial reports for the nine

months ended September 30th, 2007 as well as their 2008 budgets.

Continuing last year’s financial successes, she reported that all three companies will exceed their respective

budgets and generate profits in 2007.

For the nine months ended September 30th, 2007, AH&LA incurred a net loss of $206,000 compared to

$681,000 budgeted.

For 2007, AH&LA is projecting to break-even which is $156,000 better than

budgeted.

Dues revenue is forecasted to be $5.07 million, which is 3% below the budget, due to declines in

PSA and direct property dues.

AH&LA will generate a combined total net income of $1.18 million from

conventions and conferences in 2007.

Other non-dues revenues, including royalties, investment earnings

and sublet income are exceeding the 2007 budget.

Total operating expenses, excluding convention related expenses, are forecasted to be $6.91 million for

2007, which is slightly below the budget.

AH&LA’s has significantly decreased its line of credit

borrowing.

For 2008, AH&LA budgeted considerable increases in dues revenues.

PSA and direct property dues are

budgeted to increase 9.9% compared to the 2007 forecast.

Other dues are budgeted to increase 10% in

2008.

Total net income of $1.2 million will be generated from conventions and conferences in 2008.

For 2008, operating expenses, excluding convention related expenses, are budgeted at $7.37 million which

represents a $415,000 or 6% increase compared to 2007.

They include a 4% salary increase and a 15%

employee health benefit increase.

AH&LA expects to increase spending in the Government Affairs and the

Membership Departments in 2008.

For 2007, the Foundation is projected to generate net income of $1.28 million compared to $543,000

budgeted, due to good investment performance.

Proceeds from the Americas Lodging Investment Summit

were $175,000 ahead of the budget.

The Foundation is expected to generate $204,000 net income from the

Tribute Dinners, the Golf Classic and the Silent Auction events in 2007.

It will award one million dollars

in scholarships and research grants.

In the 2008 budget, the Foundation is expected to generate $871,000 net income.

The Foundation will

generate one million dollars in investment earnings.

It will receive $514,000 from the Americas Lodging

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Investment Summit proceeds.

In addition, it will generate net income of $206,000 from its 2008

fundraising events.

It will award $1.35 million in scholarships and research grants.

The Educational Institute has generated a net income of $470,000 in the first nine months of 2007

compared to $27,000 budgeted.

For the full year, EI is expected to generate a net income of $457,000

compared to $183,000 budgeted, despite of a shortfall of product revenues of $322,000 or 3%.

Its

operating expenses are forecasted at $8.15 million, which is $543,000 or 6% below the budget.

Savings

will be realized in salaries and in marketing expenditures.

EI is budgeting $365,000 net income for 2008.

Total revenue is budgeted to increase by approximately

10% due to increases of international sales; enhancements of industry and academic e-Learning; and,

introductions of other new products.

For 2008, total operating expenses reflect an increase of 8%,

including a 4% salary increase and increases in marketing expenditures.

Upon a motion duly made, seconded, and passed, it was

Voted:

to approve the 2008 budgets for AH&LA, the Foundation and the Educational Institute.

PARTNER STATE ASSOCIATION REPORT

The Committee reviewed the list of State Associations which are delinquent in their payments as of

October 31st , 2007.

The New Hampshire Lodging & Restaurant Association has its third quarter 2007 dues outstanding for

$5,670.

The New Jersey Hotel & Lodging Association: NJH&LA has outstanding dues of $39,304; $5,610 for the

fourth quarter of 2006; $13,979 for the first quarter of 2007; $11,060 for the second quarter of 2007; and,

$8,655 for the third quarter of 2007.

The Utah Hotel & Lodging Association has total outstanding dues of $44,933.

No remittances have been

made for 2004 third and fourth quarter dues – totaling $12,273.

The association still owes $16,365 for the

second, third and fourth quarters 2005 dues.

UH&LA also owes 2006 second and forth quarters’ dues for

$16,295.

However, it paid for its first quarter 2007 dues.

The Virginia Hospitality & Travel Association’s third quarter 2007 balance of $13,131 remains

outstanding.

It has established a plan to remit past dues by the end of 2007.

Upon a motion duly made, seconded, and passed, it was

Voted

: the New Hampshire Lodging &Restaurant Association and the New Jersey Hotel & Lodging

Association have outstanding dues as of the third quarter of 2007 and are not eligible to vote at this Board

Meeting.

Until its next meeting, the Committee will not restrict the Utah Hotel & Lodging Association and the

Virginia Hospitality & Travel Association’s rights to vote at this time to give them more time to put their

affairs in order.

AUDIT UPDATE

Drew Smith of Larson Allen briefed the Committee about new audit standards related to risk assessment.

He also presented to the Committee a confirmation to render audit and tax services for AH&LA and all of

its affiliates.

The Committee accepted the arrangement with Larson Allen.

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EXECUTIVE SESSION WITH LARSON & ALLEN

The Committee went into executive session with Drew Smith of Larson & Allen.

OLD BUSINESS

There was no old business.

NEW BUSINESS

The Committee expressed its appreciation and gratitude for Ms. Ilene D. Kamsler’s long-term service on

the Committee.

NEXT MEETING

Tentatively scheduled for June 2008.

ADJOURNMENT

The meeting was adjourned at 11:00 a.m.

Respectfully submitted,

Joori Jeon

Executive Vice President & Chief Financial Officer

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AH&LA AUDIT CERTIFICATION & CREDENTIALS COMMITTEE REPORT TO

THE AH&LA BOARD OF DIRECTORS

NOVEMBER 11, 2007 – NEW YORK, NEW YORK

Good afternoon, my name is Gene Rupnik, Chairman of the Audit Certification & Credentials Committee.

The following comments and recommendations are from our meeting held on November 9

th

, 2007.

Joe McInerney provided the Committee with general updates on the affairs of AH&LA, the Foundation,

and the Educational Institute.

Programs which increased membership were discussed.

He informed the

Committee that the Educational Institute has significantly updated and developed its products.

He also

briefed the Committee on AH&LA’s governmental affairs activities.

He stressed the need to reevaluate

committee missions.

Joori Jeon presented the Committee with AH&LA and its affiliates’ financial reports for year to-date 2007

along with their 2008 budgets.

The Committee was pleased to see that AH&LA, the Foundation and the

Educational Institute are all forecasted to have positive financial results and approved their 2008 budgets.

Joe Martin will report on the 2007 forecasts and the 2008 budgets in more detail.

The Committee reviewed the “Partnership State Association Credentials Report”.

The following State Associations have outstanding dues as of the third quarter of 2007 and are not eligible

to vote at this Board Meeting:

New Hampshire Lodging & Restaurant Association

New Jersey Hotel & Lodging Association

The Committee will not restrict the Virginia Hospitality & Travel Association and the Utah Hotel &

Lodging Association’s rights to vote at this time to give them more time to put their respective affairs in

order.

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Drew Smith of Larson Allen briefed the Committee about new audit standards.

He presented to the

Committee a confirmation to render audit and tax services for AH&LA and all of its affiliates.

The

Committee accepted the arrangement with Larson Allen.

The Committee expressed its appreciation for Ilene Kamsler’s long-term service on the Committee.

Mr. Chairman, this concludes my report.

We now need a motion and a vote of the board to accept the

recommendations of this report.

Thank you.