The October guest speakers

By Margaret Hurst, Program

Coordinator

Ed Hatchett, State

Auditor of Public Accounts

As Kentucky's 44th Auditor of Public Accounts, Ed Hatchett has a reputation for taxpayer protection, technological advancement, and law enforcement. In his first term as state auditor, he initiated performance audits that have now found over $315 million in potential savings, missed opportunities, and misapplied funds in areas such as tax collection, Medicaid, state investments, school districts, and public universities.

Text Box: Renew your AGA
Dues online

You can now renew your membership dues on-line in the Members Only Section of AGA’s national website at http://www.agacgfm.org Simply click on “Pay Dues Online” and enter your credit card number. All of Ed Hatchett's audits have centered on sound business practices,

effective management, and criminal investigation, leading to convictions of

17 corrupt public officials. He has worked with County Attorneys, Commonwealth's Attorneys, U.S. Attorneys, the State Police, and the FBI to bring white-collar criminals to justice. He is also the first state office holder to protect Kentucky's citizens from the increasing threats of cyber-crime and identity theft.

A seasoned public watchdog, Hatchett served two terms as banking commissioner and securities regulator before running for statewide office. In 1992 the John F. Kennedy School at Harvard University honored his introduction of expert system technology to assure sound banks. His

technological experience carried over to the auditor's office, where he introduced the latest computers and software to improve efficiency, assure

effectiveness, and, as always, to protect Kentucky citizens.

A native of Barren County, Ed Hatchett is a graduate of Centre College and the University of Louisville School of Law. He practiced finance, fiduciary, and tax law in Glasgow before being appointed banking commissioner by two Governors. He and his wife, Dr. Judith Hatchett, Chair of the Arts and Humanities Program at Midway College, live in Frankfort. They have two daughters and a son.

For almost 15 years, Ed Hatchett has pursued the public interest with integrity and dedication.

BJ Bellamy, Chief Information

Officer – Office of the Auditor of

Public Accounts

BJ Bellamy joined the Office of the Auditor of Public Accounts in July of 1999 after a stint as systems engineer in the Department of Financial Institutions. He has also held positions as network administration manager at the Legislative Research Commission and technology positions at the Finance and Administration Cabinet and in the Governor’s Office for Technology.

BJ’s primary responsibility at the Auditor’s Office is IT Security, particularly as it applies to financial and performance auditing in state government.

BJ has a Bachelor of Science degree in Computer Science from Kentucky State University, and holds GAIC/GSEC certification, along with serving on the GSEC Board of Advisors.

BJ and his wife, Kim, live in Frankfort with their two daughters, Kate and Kristen.

Chapter meeting notes

For September

By Mary Montgomery, Secretary

The AGA Central Kentucky Chapter meeting was held Thursday, September 5, 2002 at the Office Pub & Deli. Margaret Hurst, AGA Programs Coordinator, introduced the guest speaker, Mr. Kevin Flanery, Secretary of the Finance and Administration Cabinet.

Mr. Flanery provided an overview of the Finance and Administration Cabinet (FAC):

FAC is responsible for providing fiscal management and support to all state agencies in the Commonwealth.

FAC designs, builds, operates and maintains all state facilities; purchases commodities; and manages the state’s financial resources.

FAC maintains smooth operations for the state by measuring: where FAC has been in reaching their goals, where they are currently, and where they want to be.

FAC makes the access to government resources efficient, effective and easy.

FAC oversees the investments and debts of the state. There is approximately $3.8 billion dollars in the short-term pool of investments, as of April 2002, and there is approximately $6 billion dollars in debt. The Commonwealth invests in securities to maintain bill payments, not to gain a profit (i.e. mortgage-backed securities).

Mr. Flanery made some notes about the executive spending plan:

Kentucky is one of 12 states with no constitutional or statutory provisions related to operations of the government without a legislatively enacted budget. In other words, Kentucky’s government does not have to shut down in the event that no budget is passed. As is the case, the governor has proposed an executive spending plan, due to no budget being passed for FY 02.

Kentucky has a good credit rating, however, has been placed on a “watch list” by ratings services because the state is running on an executive spending plan and the economy.

Mr. Flanery noted the focus of GASB 34, in a non-accounting point of view, is to make the financial reporting requirements and standards of state government comparable to private sector businesses.

Mr. Flannery concluded with a “thank you” to all public servants, emphasizing their importance to the economy and communities of Kentucky.

Meeting notes of the Chapter Executive Committee

By Mary Montgomery, Secretary

The Chapter Executive Committee met at Brando’s restaurant on September 4, 2002 at 11:30.

Attendance:

Members in attendance were as follows: Cindy Upton, Mary Montgomery, Rick Waddle, Jennifer Harper, Linda Sagraves, Amy Small, Phil Nally, Margaret Hurst, Dan Flaherty, Lee Ann Waters, Don Fields, and Sharon Parrish

Agenda:

Cindy Upton provided the chapter recognition update. AGA National has our Chapter’s goal as 10,000 points. As of August 31, 2002, we have approximately 4,400 points.

All planning reports were submitted to the National Office by August 31, 2002. The CGFM and Early Careers reports were combined.

Betty King and Kenny Poynter will be the speakers for the AGA Governmental Accounting & Auditing training on October 14 and 15.

The Central Kentucky Chapter plans to give a $500 scholarship to a qualifying senior accounting student. Cindy Upton will work on the process of finding qualifying candidates.

Margaret Hurst requested the approval for the purchase of $14 gifts for the speakers. A unanimous approval was granted.

The next PDC committee meeting will be at Brando’s at 11:30 am. The next CEC meeting will be Wednesday, October 2, at 11:30 at Brando’s.

The next membership meeting will be Thursday, October 3, at 11:30 at the Office Pub & Deli. The speakers will be Ed Hatchett, Auditor of Public Accounts and B. J. Bellamy, Chief Information Officer.

Meeting notes of the

PDC Committee

By Mary Montgomery, Secretary

Hotel Reservations:

Mary Montgomery reported confirmation for Sunday, May 11, 2003 through Tuesday, May 13, 2003 for the PDC-2003 conference to be held at the Galt House.

Entertainment:

Mary Montgomery and Amy Small reported on the possibility of Caesars Casino for Monday night entertainment at the conference. Mary Montgomery will also check on the River Boat schedule for possibilities.

Programs:

Charlene Daniels and Cindy Upton discussed some options for programs and speakers.

Next Meeting:

The next meeting of the PDC committee will be announced at a later date.

Value Added by Auditors and Accountants

By Tom Crouch, CPA, CIA, CISA & Otis Singleton, CPA

Accounting is often portrayed as boring and unimportant.  Accountants and auditors are depicted in a similar manner. What investors forget is the value added to an organization by these professionals. The reality is that auditors and accountants help create, maintain, enforce, test and evaluate the internal financial controls of an organization. This process helps provide accurate accounting results and tends to keep business risks lower over many years.  The value added by these services is not always fully appreciated by investors until bad accountants and unethical auditors combine to fleece investors.

Companies issue stock and they seek to maximize shareholder wealth or, simply put, maintain high stock prices.  The stock price is greatly impacted by earnings and the associated business risk. The companies that have good accountants and auditors with high ethical standards should generally provide investors with a lower business risk when compared to other companies, thus providing a higher share price.

Companies, governmental entities, and many other groups issue bonds that are dependent on business risk for pricing and the determination of interest rates or borrowing costs. Good internal controls and good audit work should tend to keep business risk low, bond ratings good, and interest expense low.  Weak or bad internal controls and untrustworthy auditing would tend to cause bond ratings to be lowered and interest expense to increase. Good internal controls and good audit work should usually yield a higher bond price than the bond price when the internal controls are weak and the auditing is careless.

What if the most objective stock analysts and bond rating groups thought an entity's internal controls were weak and the auditor's had minimal credibility?  The additional interest expense over many years and the lower price for the stocks and bonds could represent a huge adverse financial impact.  The potential additional interest expense and the lower stock and bond prices should easily cost justify additional internal control efforts by those responsible for managing the financial processes.

The real excitement related to accounting work and audit work could be viewed as the huge interest expense savings by having good auditors and good accountants. Maintaining and continuing a professional and ethical environment for accountants and auditors can add real long-term value to stocks and bonds.

Copyright © September 24, 2002 - by Tom Crouch and Otis Singleton. This text may be forwarded via fax or e-mail so long as the copyright is shown. This text may be republished in any professional publication or web site so long as the copyright is shown. All other rights are reserved.

The CGFM Connection

Tracking CPE Credits and Supporting

Documentation for a CPE audit

To retain the CGFM designation, certificate holders must meet the following criteria:

(1) Pay the CGFM renewal fee at the beginning of every year;

(2) Adhere to the AGA Code of Ethics;

(3) Complete at least 80 hours of continuing professional education (CPE) in government financial management topics or related technical subjects every two years; and,

(4) Maintain detailed records of CPE hours completed.

How do I renew my CGFM certificate?

You can renew your CGFM certificate and/or AGA membership via the AGA website. Remember that your login is your AGA ID number on your AGA membership or CGFM renewal card and your password is your first initial followed by your last name. If you can’t remember your AGA ID number, contact the AGA local membership chairman at agamembers@agacgfm.org or call 1.800.242.7211 ext. 205 or 206.

Once you are logged in, click on the “Members Only” tab and go to “Login.” Click on the “Pay Your Dues and/or CGFM Renewal” icon and follow the instructions. If the icon does not appear, then you have no outstanding fees at this time. If you are unable to renew your certification because you have not fulfilled the CPE requirements or if you have questions about your CPE cycle, please contact the Office of Professional Certification at 1-800-AGA-7211 ext. 313.

What is a CPE program?

CPE programs are structured educational activities designed to maintain and enhance the professional proficiency in government financial management and keep the CGFM professional aware that professional development is a continuous process.

How do I earn CPE credit?

CPE credit may be earned through a group program, such as a seminar or classroom environment, or by a correspondence or independent study program. In a group program, a qualified instructor or discussion leader presents the CPE program. Although one CPE hour is granted for each fifty minutes of participation in the program of study, participants should only receive credit for the actual time they attend the program. Correspondence courses and independent study may have CPE credits computed by other methods – refer to paragraph 41 at http://www.agacgfm.org/cgfm/cgfm_details.htm for additional information.

Speakers, instructors and discussion leaders who qualify for CPE may receive credit for preparation and presentation time to the extent the topic or subject matter contributes directly to their professional proficiency. Up to two additional hours of CPE may be granted for advance preparation for each fifty minutes of their presentation.

What are the CPE requirements for a CGFM certificate holder?

CGFM certificate holders are required to obtain 80 hours of CPE biennially with a minimum of at least 20 hours annually in specified topics or technical subjects applicable to government financial management. CGFM certificate holders are responsible for determining whether a topic or subject qualifies as acceptable CPE. Examples of qualifying CPE topics for CGFM certificate holders can be found under item #27 and #32 at http://www.agacgfm.org/cgfm/cgfm_detail.htm.

What is the CPE cycle?

The CPE cycle is determined by the year in which the CGFM certificate is awarded; the award date appears on the certificate or annual renewal card. The chart below lists the CPE cycle for CGFM certificates obtained from 1994 through 2002:

The CPE cycle for CGFM certificates obtained in 1994 through 2002

Awarded in 1994/1995		Awarded in 1999
1st renewal	01/01/96 - 12/31/97	1st renewal	01/01/00 - 12/31/01
2nd renewal	01/01/98 - 12/31/99	2nd renewal	01/01/02 - 12/31/03
3rd renewal	01/01/00 - 12/31/01
4th renewal	01/01/02 - 12/31/03
Awarded in 1996		Awarded in 2000
1st renewal	01/01/97 - 12/31/98	1st renewal	01/01/01 - 12/31/02
2nd renewal	01/01/99 - 12/31/00	2nd renewal	01/01/03 - 12/31/04
3rd renewal	01/01/01 - 12/31/02
Awarded in 1997		Awarded in 2001
1st renewal	01/01/98 - 12/31/99	1st renewal	01/01/02 - 12/31/03
2nd renewal	01/01/00 - 12/31/01	2nd renewal	01/01/04 - 12/31/05
3rd renewal	01/01/02 - 12/31/03
Awarded in 1998		Awarded in 2002
1st renewal	01/01/99 - 12/31/00	1st renewal	01/01/03 - 12/31/04
2nd renewal	01/01/01 - 12/31/02	2nd renewal	01/01/05 - 12/31/06
3rd renewal	01/01/03 - 12/31/04

How are CPE audits conducted?

AGA conducts annual audits of a random sample of CGFM holders to determine compliance with CPE requirements. If you are selected for an audit, you will be asked to provide supporting documentation for verification of CPE credits. The supporting documentation should include such information as the dates, locations, course titles and brief descriptions of the course contents, number of CPE hours earned, name of the sponsoring organization, and proof of attendance or completion of the CPE program or activity, such as a certificate of attendance, CPE form, grade report or a confirmation of completed training from your employer. All CPE supporting documentation should be maintained for a minimum of three years.

What is the best way to track CPE credits?

Certificate holders should use a systematic approach to track CPE requirements for the CGFM designation as well as other professional certification designations. Because every professional certification designation has different CPE requirements, it is recommended that certificate holders track their CPE hours in an Excel spreadsheet application, which will automatically compute the hours needed to fulfill the requirements for each professional designation. A simple format such as that presented below is a suggested way to record CPE credits for professional designations:

Dates		Class Name	Sponsor	Hours	CGFM	CPA
From	To				80 hrs	120 hrs
X 2002	X1 02	AAA	AGA	8	72	112
X 2002	X1 02	BBB	AICPA	8	72	104
X 2002	X3 02	CCC	ISACA	8	72	96

If you have questions regarding CPE or specific courses for the CGFM designation, contact Katya Silver at 1.800.242.7211 ext. 313 or at ksilver@agacgfm.org, or contact your local CGFM coordinator for assistance. For additional guidance or information on fulfilling the CGFM CPE requirements, please refer to AGA’s website at http://www.agacgfm.org/cgfm/cgfm_detail.htm..

The Treasurer’s Report

Of the Central Kentucky Chapter

As of August 31, 2002

By Rick Waddle, Treasurer


Central Account			Education Account
Beginning Bank Balance		4,645.81	Beginning Bank Balance	$500.00

Revenue: Interest	3.46		Revenue:
Total Revenue	3.46

Expenses:			Expense:
Roy Hunter -	775.00
National PDC Registration
Total Expenses	775.00

Ending Bank Balance		3,874.27	Ending Bank Balance	$500.00

The National Leadership Conference

AGA is pleased to present the first National Leadership Conference in February 2003 as part of its ongoing effort to advance government accountability. This conference will bring together the top leaders from all levels of government to discuss the issues most pressing to government accountability professionals in a new and challenging environment. It offers an opportunity to bring together a variety of members and speakers to hear discussions that will equally benefit federal, state and local government professionals. The conference will be held at the Ronald Reagan Building, International Trade Center in Washington, D.C., February 20-21, 2003. If you need more information about the National Leadership Conference please contact Jennifer Root, CMP, Conferences & Meetings Director at jroot@agacgfm.org or at 800-242-7211. We encourage you to check the AGA site for continuous updates about this conference.

AGA's Federal Leadership Awards

Who do you know at the federal level who deserves special recognition?

Please help us acknowledge those financial professionals at the federal level who are leading the way. You might even consider nominating yourself. AGA's National Awards Committee is now accepting nominations for the following Federal Leadership Awards:

The Distinguished Federal Leadership Award (Recognizes elected or presidentially-appointed federal officials who exemplify and promote excellence in government management and have demonstrated outstanding leadership in enhancing sound financial management legislation, regulations, practices, policies and systems.)

The Elmer Staats Award (Recognizes the cumulative achievements of federal professionals who throughout their career have served as a role model for others and who have consistently exhibited the highest personal and professional standards.)

The Andy Barr Award (Recognizes financial executives in the private sector who exemplify and promote excellence in government, outstanding leadership, high ethical standards, and innovative management techniques.)

All nominations are due Friday, November 8, 2002. The awards will be presented during the National Leadership Conference in Washington, DC. Please visit AGA's website at http://www.agacgfm.org/about/a_awards.htm for nomination forms, eligibility requirements and more details. Or, contact Sebrina Bridgers at sbridgers@agacgfm.org or 800.242.7211, ext. 131.

Chapter Executive Committee

Office

CEC Officers

E-mail Address

Phone

President

Cindy Upton

Cindy.Upton3@Irc.state.ky.us

(502) 564-8100

President-Elect

Roy Hunter

Rhunter@cmbcpa.com

(502) 695-1040

Past President

Phil Nally

Phil.Nally@mail.state.ky.us

(502) 564-7750

Secretary

Mary Montgomery

mmontgomery@kyauditor.net

(502) 573-0050

Treasurer

Rick Waddle

Rick.Waddle@mail.state.ky.us

(502) 564-7750

Program Coordinator

Margaret Hurst

Margaret.hurst@lrc.state.ky.us

(502) 564-8100

Education/Training

Lee Ann Watters

LWatters@cmbcpa.com

(502) 695-1040

Newsletter Editor

Jennifer Harper

jharper@kyauditor.net

(502) 573-0050

Historian

Linda Sagraves

Lsagraves@kyauditor.net

(502) 573-0050

Community Service

Rex Gregory

Rex.gregory@mail.state.ky.us

(502) 564-7334

Attendance

Don Fields

Don.Fields2@mail.state.ky.us

(502) 564-7334

Membership Coordinator

Amy Small

asmall@kyauditor.net

(502) 573-0050

CGFM Coordinator

Jonathan Smith

Jonathan.Smith@mail.state.ky.us

(502) 564-2532

Website Development Coordinator

Dan Flaherty

Danielwf@bellsouth.net

Dan.Flaherty@mail.state.ky.us

(502) 564-8890

(502) 291-3889

WEBSITE

To be announced

AGA

Central Kentucky Chapter

P.O. Box 576

Frankfort, KY 40602-0576

POSTAGE

ADDRESS CORRECTION REQUESTED

Association of Government Accountants

The Central Kentucky Chapter

Attendance:

Agenda:

The CPE cycle for CGFM certificates obtained in 1994 through 2002

X1 02

X1 02

X3 02

Central Account

Beginning Bank Balance

Total Revenue