Preparations are underway as the American Institute of CPAs begins relocating nearly 400 positions about 500 miles south - from Jersey City, N.J., to Durham, N.C.Within a month of the Governing Council approving the move at its Fall Meeting of Council, institute employees considering relocation will begin to visit the Durham area.
A professional project management firm to oversee the details of the move has been hired, and the lease for the new site will be finalized by January 2006. Staff decisions on whether they will accompany the membership association south will be due by Jan. 31.
The roomful of CPAs at the Council meeting, held here, appeared to be swayed by the financials of the project. The decision seemed like a near-certainty when, after the first day of the Council's question-and-answer session on the issue, the session ended with questions petering out about an hour into the allotted 90-minute time slot.
Only a few attendees took a turn at the microphone to voice their thoughts during the confab's second day's discussion.
The reasons presented by the AICPA for the move were mostly cost-centered, and members' questions largely related to the estimates contained within the proposal. According to the presented financials, the move will come with a first-year loss of about $49 million, but should provide the AICPA with net present-value savings of approximately $100 million over the next 15 years.
While there was a scattering of naysayers in the crowd, the move passed by an overwhelming voice vote. "The proposal was weighed on its strong economic merit," said Anthony Pugliese, senior vice president of finance and administration. Pugliese will be among the relocated employees and will oversee coordination of the move.
The primary concern voiced by members was over the calculation of the 25 percent average labor savings that would be achieved over the next 15 years. Both Pugliese and AICPA president and chief executive Barry Melancon said those figures were conservative.
The move will leave about 60 employees at the institute's headquarters in Manhattan, with most of those working in either the communications or standards-setting departments. The institute's other offices in Washington and Texas will be unaffected by the move.
Among the affected departments will be finance and accounting; professional publications; the Private Companies Practice Section; membership marketing; peer review and ethics; conferences, meetings and travel; service center operations; academic and career development; information technology; and human resources. About half of the institute's senior vice presidents and vice presidents, six or seven employees, will be relocated.
The proposal includes a retention rate of roughly 20 percent of the affected workers, though the institute heard estimates ranging from as little as 5 to as much as 50 percent.
"I'm not going to tell you there won't be some disruptions," Melancon said, in response to questions about the impact of anticipated staff turnover on member services and volunteer committee projects. "But we're in a very competitive labor market right now. What I will tell you is we're going to do everything we can to convince key people to make this move."
The Durham facility's target date for occupancy is August 2006. Over the following year, the moving of personnel will be completed in phases.
A new chair
In other business, Leslie Murphy assumed the post of chairwoman of the AICPA. A partner with the Midwest regional firm of Plante & Moran, Murphy referred to future shortages of CPAs as a central challenge facing the profession and announced a new initiative, the Young CPA Network, directed exclusively at young professionals, in a speech to Council.
"Our profession encompasses many people at different stages of life and with different life goals," said Murphy, an advocate for firms providing better work/life balance. "For CPAs, just as with any service or product you buy in American today, there is one certainty - one size does not fit all; one size fits one," she said.
In a unanimous vote, Council agreed to refocus the mission of its Center for Public Company Audit Firms. The voluntary membership center has been renamed the Public Company Auditors' Forum and will concentrate on influencing public policy as an independent operation. The forum will remain affiliated with the institute and comply with its protocols, but will hire an executive director and create a new 12-member governing board. The CEOs of each of the Big Four firms, as well as those from Grant Thornton and BDO Seidman, all of which audit more than 300 issuers, will each have a seat on the board. The remaining six seats will be filled by the AICPA CEO, two chief executives from firms that audit less than 300 issuers, and three at-large public members.
Also, former AICPA chair James G. Castellano received the institute's 2005 Gold Medal for Distinguished Service. Castellano, chairman of the board of St. Louis-based RubinBrown and the board of directors for Baker Tilly International, is presently chairman of the AICPA Private Company Financial Reporting Task Force, and has led work on developing generally accepted accounting principles for private companies.
In lieu of fancier fare, the Council elected to serve hot dogs and hamburgers at its traditional opening night reception, donating the $25,000 in savings to its CPAs in Support of America Fund in support of hurricane victims.
