Boston Public Library
Trustees' Finance and Audit Committee

Board of Trustees
September 23, 2010


  • Agenda
  • Minutes

  • Agenda for Trustees Finance and Audit Committee Meeting
    September 23, 2010 Johnson Trustees Room 8am to 9am
    Chairman Evelyn Arana-Ortiz

    • Welcome/Introductions
    Chairman Evelyn Arana-Ortiz

    • Review and Approval of Minutes from August 26, 2010
    Chairman Evelyn Arana-Ortiz

    • Review and Approval of the FY10 Draft Financials
    O’Connor and Drew

    • BPL Fiscal Updates
    Sean Nelson, Chief Financial Officer

    • Annual Audit/Form 990
    • Investments/Investment Policy
    • Contracts
    • Budget

    • Approved Schedule for 2010 and 2011
    Chairman Evelyn Arana-Ortiz

    • Thursday, Oct 28, 2010
    • Thursday, Jan 6, 2011
    • Thursday, Feb 24, 2011
    • Thursday, Mar 24, 2011
    • Thursday, Apr 28, 2011

    • Other Business
    Chairman, Evelyn Arana-Ortiz

    • Adjournment
    Chairman, Evelyn Arana-Ortiz

    Future Agenda items: Form 990 Policies, Private Events (fundraising)

    Documents to be presented at the meeting are available to the public at: Boston Public Library, Office of the Clerk, Room 503, McKim Building, Copley Square, Boston, MA. The Johnson Trustees Room is located at the Boston Public Library, 700 Boylston Street, 3 rd. floor, Boston, MA.


    Minutes of Meeting
    Trustees’ Finance and Audit Committee Thursday, September 23, 2009

    A meeting of the Trustees Finance and Audit Committee was held at the Boston Public Library, Trustees Room, Johnson Building, on Thursday, September 23, 2010 at 8:00 a.m.          

    Present at the meeting were:  Chairman Evelyn Arana-Ortiz; Trustee Zamawa Arenas; Ray Sullivan, Board of Directors, Boston Public Library Foundation; Jean Capizzi, City of Boston, Office of Budget Management; Sean Nelson, Chief Financial Officer; Ed Maheigan, Budget and Procurement Manager; Sean Monahan, Supervisor of Accounting; and Jamie McGlone, Clerk of the Board.  The Chairman noted that she received apologies from Trustee Donna M. DePrisco who was unable to attend. 

    Also attending were:  David DiIulis, Partner, Steven Cohen, Partner, and Sean Huxley, Manager, O’Connor & Drew, P.C., auditors for the Boston Public Library and the Boston Public Library Foundation.

    Chairman Evelyn Arana-Oritz presiding. 

    The Chairman reviewed the agenda and addressed the first item on the order of business pertaining to the review and approval of Minutes for the Trustees Finance and Audit Committee Meeting held on August 26, 2010.  Following discussion, on a motion duly made and seconded, the Minutes of the Trustees Finance and Audit Committee Meeting held on August 26, 2010 were approved.

    The auditors from O’Connor & Drew, P.C., presented a review of the draft “Trustees of the Public Library of the City of Boston, Basic Financial Statements and Management Discussion and Analysis, June 30, 2010”. 

    The auditors conveyed required communications under auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards.  The auditors reported an unqualified opinion on the Boston Public Library’s financial statements has been issued reflecting the respective financial position of the Library as of June 30, 2010.

    The auditors noted that there were no changes in significant accounting policies, no audit differences between management and the auditors, no uncorrected misstatements, and no pervasive financial statement fraud risks that were identified which are all required to be communicated to the Committee. 

    The auditors reported there were no difficulties in conducting the audit that progressed very smoothly as a result of beginning the audit review early this year and a management letter report will be forthcoming based on severity of priorities. 

    The auditors provided an overview of the draft Boston Public Library, Basic Financial Statements, Management’s Discussion and Analysis, and Notes to the Basic Financial Statements as of and for the year ended June 30, 2010.   

    The Chair suggested a revision to the Basic Financial Statements, Note 5, Page
    24 pertaining to the description of the Library of Last Recourse (LLR) program toward clarity around the definition of the LLR program. 

    Mr. Ray Sullivan suggested a review of the Basic Financial Statements, Note 15, Page 29, pertaining to the reference of the Boston Public Library Foundation as the primary fundraising arm of the Boston Public Library noting there are other affiliates that raise money for the library that perhaps should also be recognized. 

    The committee also discussed the desirability for the library and the auditors to explore ways of aggregating and quantifying all the different ways that the library receives major support for its programs. 

    The CFO noted that the Trustees of the Public Library of the City of Boston voted on September 16, 2009 to delegate approval of the Boston Public Library’s Final Audit to the Trustees Finance and Audit Committee. 

    Following discussion, on a motion duly made and seconded, and subject to a rewording of Notes 5 and 15, it was

    VOTED    “unanimously to approve the “Trustees of the Public Library of the City of Boston, Basic Financial Statements, June 30, 2010”.  

    The CFO reported on the status of the Annual Audit/Form 990 which is in progress relative to identifying what policies are necessary to be in place for the tax returns that will be shared with the committee in draft form at the next meeting. 

    The CFO recalled the Trustees voted on September 14, 2010 approval of the revision to the “Trustees of the Public Library of the City of Boston, Statement of Investment Policy & Objectives, May 2002, Investment Guidelines”to include “Investments in Index or Mutual Funds that derive over 15% of their revenue for tobacco, alcohol, and gambling are prohibited” as recommended by the Trustees Finance and Audit Committee.

    The CFO noted that there was some discussion at the Trustees Meeting regarding the need for additional information on moving to index fund that would allow significant savings on investment management fees.  Further, the Chairman asked that New England Pension Consultants (NEPC) be invited to the next Board meeting for a presentation on the benefits between actively managed funds vs. index funds. 

    Chairman Evelyn Arana-Ortiz requested that NEPC be invited to the next Finance Committee Meeting on October 28, 2010 for an overview of their presentation on investments that will be given to the Board. 

    On a related topic, Mr. Ray Sullivan suggested a clarification to and revision of the Minutes of August 26, 2010, Page 1, Paragraph 7 pertaining to the discussion on the investment policy guidelines regarding “investments in companies that derive a majority of their revenues for tobacco, alcohol, and gambling are prohibited” which would equate to 20 – 30% of the endowment not being socially screened.  

    Subsequently, the Minutes of August 26, 2010, Page 1, Paragraph 7 were revised as following:  As written in the investment policy guidelines, “investments in companies that derive a majority of their revenues for tobacco, alcohol, and gambling are prohibited.”   These social restrictions in the investment policy pose an issue when dealing with commingled or mutual funds.  Implementing steps to integrate mutual funds into the policy would equate to 20 – 30 % of the endowment not being socially screened. The City of Boston does not currently have any social screens in their investment policy.
               
    The Chairman reviewed the approved Schedule of Trustees Finance and Audit Committee Meetings for 2010 and 2011 as follows: 

    There being no other business, the Trustees Finance and Audit Committee meeting adjourned at 8:45 a.m. 

    Respectfully submitted,

    Jamie McGlone
    Clerk of the Board