Association of Government Accountants The Central Kentucky Chapter

March 2003 - Volume XXIV, Issue 9

The President’s

Message

By Cindy Upton, President

Even in inclement weather, your Central Kentucky Chapter has continued its efforts to meet the needs of the membership. Our luncheon meetings often offer an hour of continuing professional education (CPE) credit. Even when they don’t qualify for CPE, the speakers are excellent and the topics are interesting. Please join us each month at the Office Pub & Deli.

As described in a separate article in this month’s newsletter, Chapter members were invited by State Auditor Ed Hatchett to participate in a training session on the new Statement on Auditing Standards No. 99, which addresses the auditor’s responsibilities for detecting fraud in a financial statement audit. The National Association of Government Accountants and the National Association of State Auditors, Comptrollers and Treasurers jointly sponsored this audio conference. The Central Kentucky Chapter would like to thank State Auditor Hatchett and his staff for giving our Chapter members an opportunity to participate in the training session.

The Central Kentucky Chapter will award a $500 scholarship award to a Kentucky resident pursuing a career in the accounting profession; additional information is provided in this edition.

The Central Kentucky Chapter is hosting the Regional Professional Development Conference in May. We anticipate providing curriculum of timely courses presented by subject matter experts from Kentucky and other southeastern states. A draft agenda will be presented in next month’s newsletter. Until then, stay warm and dry, and have fun.

Chapter meeting notes for February

By Mary Hudson, Secretary

The Central Kentucky Chapter held its monthly membership meeting Wednesday, February 12, 2003, at the Office Pub and Deli. Don Fields, Attendance Coordinator, introduced the guest speaker, Mr. Jimmy Rogers, Budget Director for the City of Frankfort.

Mr. Rogers began his discussion of the budget with a little history. The first budget for the City of Frankfort was enacted in 1960 for $739,000, with 20 city employees and a 1% payroll tax. Frankfort’s current budget stands at $25 million with 315 city employees and a 1.75% payroll tax.

The budgeted revenues are composed of payroll taxes, property taxes, permits and fines, and intra-governmental transfers. Payroll taxes compose about 13% of the budgeted revenues, with 7% coming from state employee payroll taxes. The budgeted expenditures are divided between police protection (74 employees), the fire department (56 employees), ambulance services, insurance, parks (14 employees) street maintenance (23 employees), and sewer maintenance (32 employees).

Current capital improvements include a bond issue for improving the drainage problems in West Frankfort. Several farms have been purchased recently. They include the Carpenter Farm, Cold Springs Farm, and Fincel Farm.

Mr. Rogers ended his discussion by emphasizing that we, as a city, even as a state, are not alone in the budget difficulties.

TOPICS to Become Online Publication in April, Register for E-TOPICS

In an effort to reduce expenses and take full advantage of available technology, AGA’s National Executive Committee voted in September to cease the printed version of TOPICS after the March 2003 issue.

Beginning with the April 2003 issue, members will receive an e-mail notification telling them the new issue is available for download and providing an active link that they can click on to easily access the website.

To keep its members in touch with their Association, it is critical that AGA have an active e-mail address for each and every member. We have established a page at AGA CGFM where members can provide their e-mail addresses. We have also made it easy for you to tell us how you want your e-mail address used—just for TOPICS, for occasional updates, no group contact or mass marketing, etc.

We urge each and every member to ensure the e-mail address AGA has on file is updated whenever it changes. If you are an AGA member who does not have Internet access at home or at work, please contact our Customer Satisfaction Center at 800.AGA.7211.

Meeting notes Of the Chapter Executive Committee

By Mary Hudson, Secretary

The Chapter Executive Committee held a meeting at Brando’s on Wednesday, February 5, 2003, with the following members in attendance: Cindy Upton, Mary Hudson, Rick Waddle, Phil Nally, Linda Sagraves, Amy Small, Margaret Hurst, Don Fields, Dan Flaherty, Sharon Parrish, Lee Ann Watters, and Roy Hunter.

The Central Kentucky Chapter will award a $500 scholarship to a Kentucky college student pursuing a degree in the accounting profession. Sharon Parrish informed the committee members that scholarship information was sent to Kentucky colleges on Friday, January 31, 2003. She provided copies of the information sheet and application to the scholarship committee members: Linda Sagraves, Amy Small, and Lee Ann Watters.

Margaret Hurst provided an update for the May banquet. She will check to see if Bob Crowl, the Regional Vice President will speak for the meeting. The tentative date for the banquet is May 5, 2003, which will be finalized at a later date.

Cindy Upton discussed the PDC Conference update. Several ideas were discussed. Roy Hunter and Lee Ann Watters are in charge of purchasing gifts. They will also solicit their CPA firm, Carpenter, Mountjoy, & Bressler, P.S.C., for sponsorship of the conference. The agenda, time line for programs and speakers will be discussed via e-mail as information becomes available.

The next CEC meeting will be held Wednesday, March 5, at Brando’s at 11:30.

What a great way to begin the New Year!

By Joan Schwartz

Congratulations and thanks to all of you who have helped to promote and support the CGFM designation! Our statistics reflect your advocacy of the CGFM Program. From providing CGFM ribbons for your members' nametags at monthly meetings, to providing rebates for individuals taking their CGFM exams, to celebrating a member's passing the CGFM examination, you have brought to the attention of your membership the value of the CGFM Program.

During the last nine months of fiscal year 2002-03 the number of applicants for the CGFM Program has increased by 20% and the number of CGFM holders has increased 100% over the numbers for all of fiscal year 2001-2002. And, most importantly, our CGFM renewal rate for 2002 was 95%!

We look forward to your continued support of the CGFM Program - it will continue to grow and prosper only if you continue your advocacy and support. We want to especially thank the individuals who took the leadership roll along with the AGA chapter leadership in Idaho, Washington, and Missouri. Their persistence and hard work resulted in successfully having state departments and/or legislators formally recognize the CGFM designation.

Those of you who are interested in following in your colleagues' footsteps can call them for information and

support - Ms Angie Billings in Idaho (208.334.2882 or abillings@dfm.state.id.us ), Ms Vandee DeVore in Missouri (573.522.5863 or devorv@mail.oa.state.mo.us), and Ms Tracy West in Washington (360.357.2634 or sunset@hctc.com).

At the federal level we began to see the results of the 2002 government legislation permitting government agencies to use appropriated funds to pay for examinations to obtain professional certification credentials. Two departments have issued professional certification policies -- the

EPA's IG office and the Defense Finance and Accounting Service (DFAS) of the Department of Defense (both can be found on the AGA website).

Each of us can make a difference - Do you have a colleague in the human resources department of your division who can give you updates about revisions to job classifications, or how to go about obtaining recognition for a certification? Do you have colleagues who are considering a job promotion or a change in jobs and want to know what will place them above the rest of the applicants? Do you use your CGFM designation on your business cards and after your name on business letters? All of these small acts add up to gaining greater recognition for the CGFM!

Frequently asked questions about CGFM examination procedure

Q: What is the procedure for taking the CGFM Examinations?

A: You must first apply for the CGFM Program (for more information on CGFM application requirements, please visit our website at AGA CGFM-How to apply. After your application is processed, you will receive a letter confirming your eligibility to sit for the examinations. This letter will include your candidate identification number. The eligibility letter will provide detailed instructions for purchasing your examinations on the AGA website. You can purchase one, two or all three examinations at this time. Once you purchase your examinations, you can print the authorization letter. This authorization letter provides you with detailed instructions for scheduling your testing appointment with PROMETRIC.

Q: Do I have to take all three examinations at the same time or in any particular order?

A: No. You may take up to three years to complete all three examinations. You can take the examinations in any order.

Q: How often are the examinations offered?

A: They are offered six days a week all year round. Some centers may even offer evening hours for testing. After registering and purchasing the exams, you may contact PROMETRIC for exact times and availability.

Q: How often can I retake the examinations?

A: You may retake an exam as often as you like. If you do not pass the exam the first time, you must wait 30 days before taking the exam again. If you don’t pass a second time, there is a three-month waiting period between retakes. You have three years to pass all three exams. Otherwise, you need to reapply and begin again, and all exams that were passed will have to be

retaken.

No better time to enter government service

By Joan Schwartz

“There hasn’t been a better time to join the federal government than today. The numbers of opportunities that will be available for advancement over the next 10-15 years are going to be incredible. If you are a young person in government now, you are going to have a great open field in front of you if you have the right skills,” according to Miguel Torrado, associate commissioner for personnel at the Social Security Administration. According to the most recent figures, almost half the federal workforce may retire during the next eight years.

For those of you just embarking on your financial management career, you may wish to seriously consider entering government service. If you haven’t taken college courses in government accounting and budgeting; if you haven’t decided which sector of financial management you wish to enter, we recommend you consider augmenting your college degree with practical training by earning your Certified Government Financial Management (CGFM) designation.

In today’s world, state, local and federal government financial groups need highly skilled and knowledgeable employees. But governments also contract with private organizations to help with their financial management needs. By earning the CGFM designation you strengthen your opportunities for long-term success in both the public and private sector.

As Laura Price, CGFM, CPA, Partner, KPMG, LLP says, “I regularly remind our staff that earning the CGFM is a worthwhile and valuable performance goal. We encourage all our professionals to earn the designation….” Whatever sector you choose to work in, the CGFM certification indicates to your employer that you are serious about your profession and have met the rigorous standards set by a national professional body.

Talk with your local CGFM chapter coordinator at the next AGA meeting or visit the AGA website at AGA CGFM to find out more about the CGFM certification process.

There is no better time than the present to begin enhancing your knowledge and skills. The CGFM will provide you the edge in today’s competitive workforce!

Recruit members for

AGA’s Team REAP

There is still plenty of time to participate in AGA’s 2002-2003 membership campaign, “REAP—Recruit & Retain Essential Accountability Professionals.” The campaign runs from May 1, 2002 to April 30, 2003. All new member recruiters get a chance at winning prizes!

Our membership goal is to recruit at least 2,300 new AGA members while keeping lost members to less than 1,900—a 2 percent net growth.

“Recruiting members for the AGA is an easy task as the organization sells itself. Membership provides tremendous networking as well as educational opportunities. The website has countless resources for those in the profession who are pursuing additional training or certification as well as information on what chapters are doing.” —Elsa Giammarco, Central Ohio Chapter.

The 2002-2003 campaign includes an attractive selection of incentives, which include:

Individual Members (1 prize in total): A fishbowl drawing for a trip for two to anywhere in the continental U.S. or Alaska, Hawaii or Caribbean (airfare and hotel only). Your name gets put into the fishbowl each time you recruit a new member—recruit one member, get one chance; recruit 100 members, get 100 chances.

Chapter Membership Chairs (six prizes in total): Two airline tickets to anywhere in the continental U.S. One chapter membership chair from each of the six chapter size groupings has a chance at winning a prize. The prize goes to the membership chair whose chapter has the highest percentage of growth for the program year.

Chapter Presidents (six prizes in total): An upgraded room at the 2003 PDC to the concierge level or a complimentary PDC registration. One chapter president from each of the six chapter size groupings has a chance at winning a prize, which goes to the president whose chapter has the highest percentage of growth for the program year.

Regional Coordinators for Membership (one prize in total): A $500 gift certificate to Best Buy or Circuit City. The regional coordinator for membership whose region has the highest percentage of growth for the program year will win this prize.

Regional Vice Presidents (one prize in total): A $500 gift certificate to Best Buy or Circuit City. The regional vice president whose region has the highest percentage of growth for the program year will win this prize.

The Recruiter of the Year and the Top Two Sponsors will also receive a complimentary meeting registration. All prizes are subject to federal and state laws. The Regional Coordinators for Membership, the National Executive Committee and the National Office have accepted the challenge and have been working hard on both recruitment and retention. But its success will rely a great deal on you! We need the commitment of every member to spread the word about AGA and encourage your colleagues to join.

By working together, we will undoubtedly make TEAM REAP a success! Start recruiting today! Call the Customer Satisfaction Center at 800.AGA.7211 to request membership applications.

PDC 2003 program taking shape, themes selected for each day

Themes for each day of the 2003 Professional Development Conference & Exposition have been set: Defining the Business Challenges, Meeting the Business Challenges and Becoming More Citizen-Centric.

On the first day, speakers will answer the question, “What are the strategic challenges facing federal, state and local governments and, in particular, their financial managers?” On the second day, sessions will focus on, “How can our organizations, and we as financial leaders, address the business challenges of the next decade?” And on the final day, attendees will hear top-notch speakers address, “As public servants, how can we help our organizations deliver services and products to the citizens that are more cost-effective and efficient?”

The overall theme of the PDC is “Financial Management—Working $marter for the Future.” The Conference, which will offer 26 CPE hours, will he held June 29-July 2 at The Sheraton Chicago Hotel & Towers, 301 E. North Water St., Chicago.

Making early plans to attend will save you time and money later. Register online at AGA CGFM and save $25. Fees are $800 for members and $1,000 for nonmembers before May 30. After that date, fees go up by $100. Make your reservations at the Sheraton Chicago Hotel & Towers by calling 312.464.1000, or toll free at 877.242.2558. Visit the hotel’s website at Sheraton Chicago. The per diem rate is $155 per night, plus tax, for single and double rooms. Mention the AGA PDC when making your reservations to ensure you receive the per diem rate.

There has never been a more critical time to become a better-educated government financial manager. Each year, the PDC gives professionals the tools they need to become more effective employees. We look forward to seeing you in Chicago!

SAS 99: The AICPA’s response to recent high-profile business failures

By Jennifer Harper, Newsletter Editor

The Kentucky Auditor of Public Accounts held an audio training session on SAS 99, “Consideration of Fraud in a Financial Statement Audit”, led by Frank and Mike Crawford of Crawford & Associates, P.C., located in Oklahoma City, Oklahoma. Crawford & Associates provides auditing, consulting and accounting services to state and local government entities.

SAS 99, which supersedes SAS No. 82, was issued as part of the AICPA’s anti-fraud program that was developed in response to recent high-profile business failures. This critical new standard establishes standards and provides guidance for auditors in fulfilling their responsibility, as it relates to fraud, in financial statement audits, conducted in accordance with GAAS. SAS 99 also establishes new standards for management and boards in preventing and detecting fraud within an organization.

Under the new standard, auditors still have a responsibility to plan and perform the audit to provide reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. However, there are significant changes in auditing procedures and documentation requirements.

While there is no change in management’s responsibility to establish controls to prevent and detect fraud, there is new guidance on management antifraud programs and controls. Management should also expect additional inquiries about risks and the presence of fraud within the organization. The key provisions of the new standard include:

¨ Emphasis on professional skepticism;

¨ Increased communications with employees, with varying levels of authority, about fraud risk;

¨ Tests should be unpredictable and unexpected; and,

¨ Tests should be developed to detect management override of controls on every audit.

To significantly reduce fraud risk, all organizations should implement the following preventive measures:

¨ Maintain high standards of honesty and ethical values within the organization;

¨ Evaluate fraud risk regularly and implement systems and controls to reduce the risk; and,

¨ Develop an independent oversight process to monitor management activities to ensure that management is upholding its responsibilities to the organization.

Central Kentucky Chapter

scholarship award

The Central Kentucky Chapter of the Association of Government Accountants will award a $500 scholarship to a Kentucky resident with a declared major in Accounting. Scholarship money may be used at an out of state college or university and eligible expenses include tuition, books and fees. Applicants must meet the following eligibility requirements:

¨ Kentucky resident;

¨ Declared major or specialization in accounting;

¨ Junior standing;

¨ Completed Principles of Accounting and completed or currently enrolled in Intermediate Accounting I; and,

¨ Overall GPA of at least 2.75 and a GPA of at least 3.0 in accounting courses.

In addition to the above requirements, consideration will be given to the applicant’s career goals and financial needs. Candidates must submit the following information:

¨ An official application form (photocopies will be accepted);

¨ College transcript(s);

¨ Two letters of recommendation, one of which must be from an accounting faculty member; and,

¨ All applications must be postmarked by March 17, 2003.

All applications should be mailed to:

Lee Ann Watters, Chair

Scholarship Committee

AGA Central Kentucky Chapter

P.O. Box 576

Frankfort, KY 40602

The Scholarship Committee of the Central Kentucky Chapter of the Association of Government Accountants will review the applications. The decision of the Scholarship Committee will be final and the winner will be notified by April 7, 2003. The application and scholarship requirements are posted on the Central Kentucky AGA Website at CKY AGA. Good luck!!!

New scholarship opportunity available for AGA members

Rutgers University has created a scholarship program for AGA members interested in earning the CGFM certification and an advanced degree in government financial management, which is now completely available online. Rutgers will commit $25,000 over a two-year period, with five students receiving $2,000 each in the first year. For more information, contact AGA Director of Education Linda Martin- Latham, MA, at 800.AGA.7211 x 209, or at llatham@agacgfm.org. Check Gov-MACCY-Rutgers for additional information about admission, curriculum, program requirements and faculty.

The Treasurer’s Report

Of the Central Kentucky Chapter

For the month ended January 31, 2003

By Rick Waddle, Treasurer

Central Account			Education Account
Beginning Bank Balance		$2,478.17	Beginning Bank Balance	$3,571.13
Revenue:			Revenue:
Interest	2.11
Total Revenue	2.11
Expenses:			Expense:
Service Charge	10.00
Total Expenses	10.00
Ending Bank Balance		$2,470.28	Ending Bank Balance	$3,571.13

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 Hudson	mhudson@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
Early Careers Director	Sharon Parrish	Sparrish@gwmail.kysu.edu	(502) 564-6910
Education & Training Coordinator	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 Coordinator	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
Central Kentucky AGA Website	http://www.ckyaga.com/