Audit Committee Minutes 11-07-08 2

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AUDIT, CERTIFICATION & CREDENTIALS COMMITTEE MEETING FRIDAY, NOVEMBER 7, 2008 INTERCONTINENTAL THE BARCLAY NEW YORK, NEW YORK MINUTES 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 Jan Marie Chesterson Pamela Inman Debbie Johnson Joseph McInerney Don Johnson Robert Steele, III David Kong Min Zhao Joe Martin Richard C. Nelson GUESTS Robert Slater Banks Brown Drew Smith MEMBERS ABSENT Thomas Corcoran, Jr. 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 thVOTED: to approve the minutes of the June 9 , 2008 meeting held in Oklahoma City, Oklahoma. 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 3.4% through October 2008. AH&LA’s officers or staff attended 30 partner state meetings; 39 industry and other association events; and, eight school functions. Twenty-eight seminars will be completed in 21 states as part of the AH&LA seminar series in 2008. The Under 30 Gateway ...

Informations

• Publié par: Vowyong
• Nombre de lectures: 20
• Langue: English

Extrait

AUDIT, CERTIFICATION & CREDENTIALS COMMITTEE MEETING

FRIDAY, NOVEMBER 7, 2008

INTERCONTINENTAL THE BARCLAY

NEW YORK, NEW YORK

MINUTES

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

Jan Marie Chesterson

Pamela Inman

Debbie Johnson

Joseph McInerney

Don Johnson

Robert Steele, III

David Kong

Min Zhao

Joe Martin

Richard C. Nelson

GUESTS

Robert Slater

Banks Brown

Drew Smith

MEMBERS ABSENT

Thomas Corcoran, Jr.

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 9

th

, 2008 meeting held in Oklahoma City, Oklahoma.

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 3.4% through October 2008.

AH&LA’s

officers or staff attended 30 partner state meetings; 39 industry and other association events; and, eight

school functions.

Twenty-eight seminars will be completed in 21 states as part of the AH&LA seminar

series in 2008.

The Under 30 Gateway membership category has reached 205 members.

AH&LA is a part of the Coalition for a Democratic Workplace (CDW) and AH&LA’s Legislative

Readiness Fund has raised $3 million to protect a worker's right to a private ballot when deciding whether

to join a union.

The HotelPAC has raised $427,000 in 2008.

AH&LA has enhanced its visibility by

hosting two industry events during both major political parties’ national conventions.

AH&LA’s Green

Task Force is developing a series of comprehensive, sustainable greening guidelines to create an

environmental-friendly hotel.

The Educational Institute has appointed Robert Steele as President after Roy Kennington’s pending

retirement at the end of the year.

It continues its efforts to revitalize its product line-ups.

The Foundation will fund $1.4 million in academic scholarships and research grants in 2008.

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 30

th

, 2008 as well as their 2009 budgets.

AH&LA is expected to break-even in 2008.

For 2008, AH&LA’s dues revenue is forecasted to be $4.31

million, which is $385,000 below the budget but representing a 8% increase from 2007.

AH&LA will

generate a combined total net income of $1.3 million from its conventions and conferences in 2008.

Other

non-dues revenues, including royalties, investment earnings and sublet income are exceeding its 2008

budget.

Total operating expenses, excluding convention related expenses, are forecasted to be $7.2 million for

2008, which is $192,000 (3%) below the budget.

For 2009, AH&LA is budgeting a modest increase in its dues revenues.

PSA and direct property dues are

budgeted to increase 5% compared to the 2008 forecast.

Other dues are budgeted to increase 3% in 2009.

Total net income of $1.2 million will be generated from conventions and conferences in 2009.

For 2009, operating expenses, excluding convention related expenses, are budgeted at $7.7 million which

represents a $500,000 or 6% increase from 2008.

They include a 4% salary increase and a 10% employee

health benefit increase.

AH&LA expects to increase spending in the Finance, Marketing and

Communications and Central Administrations Departments in 2009 due to staff realignment, a special

event, and increases in rental expenses.

For 2008, the Foundation is projected to generate a net income of $708,000 compared to $871,000

budgeted, mainly due to poor investment performance.

Proceeds from the Americas Lodging Investment

Summit were $195,000 above the budget.

Its Annual Giving Campaign has exceeded the budget of

$100,000 to reach $115,000.

The Foundation is expected to generate $130,000 net income from the Golf

Classic and the Silent Auction events in 2008.

According to its 2009 budget, the Foundation is expected to generate a net income of $800,000.

The

Foundation will receive $871,000 from its investment earnings.

It will obtain $673,000 from the Americas

Lodging Investment Summit proceeds and will raise $115,000 from its Annual Giving Campaign.

In

addition, it will generate net income of $137,000 from its 2009 fundraising events and will award $1.44

million in scholarships and research grants.

For 2008, the Educational Institute is expected to sustain a net loss of $431,000 compared to a budgeted net

income of $365,000.

It will have a shortfall of product revenues of $1.3 million or 9%.

The shortfall is

caused by declines of course sales in India; delays in key product introductions or revisions; and, certain

unfavorable timing of long-term contract renewals.

Its operating expenses are forecasted to be $8.9

million, which is within the budgeted range.

EI is budgeted to break-even in 2009.

Total revenue is budgeted to increase by approximately $762,000 or

6% due to introductions of new or revised products; establishments of strategic partnerships; sales recovery

in India; and, a more favorable timing of long-term contract renewals.

For 2009, total operating expenses

are budgeted at $9 million; representing a modest increase of 1%.

Its budgeted operating expenses

contemplate a 4% salary increase and reflect realignments of sales and marketing expenditures.

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

Voted:

to approve the 2008 financial statements and 2009 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 31

st

, 2008 presented by Pamela Inman.

The New Jersey Hotel & Lodging Association has outstanding dues of $34,677.

This includes $11,060 for

the second quarter 2007 dues; $4,773 for the first quarter of 2008; and, $11,292 for the second quarter of

2008.

In addition, it has not paid for its third quarter 2008 dues of $7,552.

With the exception of New Jersey, all Partner State Associations have paid their dues as of the third quarter

of 2008.

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

Voted

: in consideration of the fact that that the New Jersey Hotel & Lodging Association provided

AH&LA with a payment plan to retire its old debts and pledged to stay current with its future dues starting

the fourth quarter of 2008, the Committee will not restrict its rights to vote.

AUDIT UPDATE

Drew Smith of Larson Allen briefed the Committee about new audit standards and the redesigned Form

990 reporting requirements.

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

of its affiliates for 2008.

The Committee accepted the arrangement with Larson Allen.

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

There was no new business.

NEXT MEETING

Tentatively scheduled on June 22

nd

, 2009 in Chicago, Illinois.

ADJOURNMENT

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

Respectfully submitted,

Joori Jeon

Executive Vice President & Chief Financial Officer

AH&LA AUDIT CERTIFICATION & CREDENTIALS COMMITTEE REPORT TO THE AH&LA

BOARD OF DIRECTORS

NOVEMBER 9, 2008 – NEW YORK, NEW YORK

Good afternoon, my name is Greg Bryan, Vice Chairman of the Audit Certification & Credentials

Committee.

The following comments and recommendations are from our meeting held on November 7

th

,

2008.

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

Educational Institute.

Programs that increased membership were discussed.

He informed the Committee

of the Educational Institute’s leadership changes and its efforts to revitalize products, briefed the

Committee on AH&LA’s governmental affairs activities, and gave updates on the Green Task Force.

Joori Jeon presented the Committee with AH&LA and its affiliates’ financial reports for year to-date 2008

along with their 2009 budgets.

AH&LA is expected to break-even in 2008 and sustain a net loss in 2009.

The Foundation is projected to generate net incomes in 2008 and 2009.

The Educational Institute is

projected to sustain a loss in 2008 but break-even in 2009.

The Committee approved their 2008 financial

statements and 2009 budgets.

David Kong will report on the 2008 forecasts and the 2009 budgets in more

details.

The Committee reviewed the “Partnership State Association Credentials Report” presented by Pam Inman.

The New Jersey Hotel & Lodging Association has outstanding dues of $34,677.

This includes $11,060 for

the second quarter 2007 dues; $4,773 for the first quarter of 2008; and, $11,292 for the second quarter of

2008.

In addition, it has not paid for its third quarter 2008 dues of $7,552.

Considering that the New

Jersey Hotel & Lodging Association provided AH&LA a payment plan to retire its old debts and pledged to

stay current with its future dues starting the fourth quarter 2008, the Committee will not restrict its rights to

vote.

With the exception of New Jersey, all Partner State Associations have paid their third quarter 2008 dues.

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

He presented to the

Committee a confirmation to render audit and tax services for AH&LA and all of its affiliates for 2008.

The Committee accepted the arrangements with Larson Allen.

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.