PROFESSIONAL STAFF CONGRESS OF THE CITY UNIVERSITY OF NEW YORK
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1 PROFESSIONAL STAFF CONGRESS OF THE CITY UNIVERSITY OF NEW YORK STATEMENT OF TOTAL EXPENSES AND ALLOCATION OF EXPENSES BETWEEN CHARGEABLE EXPENSES AND NON-CHARGEABLE EXPENSES AND INDEPENDENT AUDITOR S REPORT YEAR ENDED AUGUST 31, 2017
2 PROFESSIONAL STAFF CONGRESS OF THE CITY UNIVERSITY OF NEW YORK STATEMENT OF TOTAL EXPENSES AND ALLOCATION OF EXPENSES BETWEEN CHARGEABLE EXPENSES AND NON-CHARGEABLE EXPENSES YEAR ENDED AUGUST 31, 2017 CONTENTS Independent Auditor s Report 1 Statement of Total Expenses and Allocation of Expenses Between Chargeable Expenses and Non-Chargeable Expenses 3 Notes to Statement 4 PAGE
3 INDEPENDENT AUDITOR S REPORT To the Executive Board of Professional Staff Congress of the City of New York We have audited the allocation of expenses of Professional Staff Congress of the City University of New York (PSC/CUNY) for the year ended August 31, 2017, as shown on the accompanying statement of total expenses and allocation of expenses between chargeable expenses and nonchargeable expenses and related notes to the statement. Management s Responsibility for the Statement Management is responsible for the preparation and fair presentation of the statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of statement that is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on the statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statement. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to PSC/CUNY s preparation and fair presentation of the statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of PSC/CUNY s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the statement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
4 Opinion In our opinion, the statement referred to above presents fairly, in all material respects, the allocation of expenses of Professional Staff Congress of the City University of New York for the year ended August 31, 2017, on the basis of the definitions and significant factors and assumptions described in Notes 3 and 4. Other Matter The total expenses reflected in Column A of the statement agree to the expenses in the audited statement of Professional Staff Congress of the City University of New York for the year ended August 31, 2017, as described in Note 5. The allocation of expenses between chargeable (column B) and non-chargeable (column C) is based on the definitions and significant factors and assumptions described in Notes 3 and 4. The accompanying statement was prepared for the purpose of determining the fair share cost of services rendered by PSC/CUNY for employees represented by, but not members of PSC/CUNY. The accompanying statement is not intended to be a complete presentation of PSC/CUNY s financial statements. This report is intended solely for the information and use of Professional Staff Congress of the City University of New York and its agency fee payers and is not intended to be and should not be used by any other parties. New York, New York April 25,
5 Professional Staff Congress of the City University of New York Statement of Total Expenses and Allocation of Expenses Between Chargeable Expenses and Non-Chargeable Expenses Year Ended August 31, 2017 Column A Column B Column C Non- Total Chargeable Chargeable Expenses Expenses Expenses Notes Expenses Affiliation fees $ 11,140,664 $ 9,636,974 $ 1,503,690 4a Salaries, employee benefits and payroll taxes 5,759,791 4,817, ,263 4b Governance 288, ,512 87,697 4c Public relations 250, , ,956 4d Building expenses 1,360,576 1,129, ,298 4e Administrative expenses 285, ,920 35,310 4f Professional fees 403, , ,963 4g Contract and budget campaigns 180,293 5, ,505 4h Stipends and reassigned time 464, ,150 38,015 4i Depreciation expense 92,831 77,050 15,781 4j Total expenses 20,225,596 16,976,118 3,249,478 Less: NYSUT and AFT per capita expense 10,856,038 9,503,508 1,352,530 $ 9,369,558 $ 7,472,610 $ 1,896,948 Percentages 100% 79.75% 20.25% See accompanying notes to financial statements
6 PROFESSIONAL STAFF CONGRESS OF THE CITY UNIVERSITY OF NEW YORK NOTES TO STATEMENT OF TOTAL EXPENSES AND ALLOCATION OF EXPENSES BETWEEN CHARGEABLE EXPENSES AND NON-CHARGEABLE EXPENSES YEAR ENDED AUGUST 31, 2017 NOTE 1. ORGANIZATION AND TAX STATUS Professional Staff Congress/CUNY (PSC/CUNY) represents faculty and professional staff at The City University of New York and The CUNY Research Foundation. The purpose and objectives of PSC/CUNY are to negotiate and administer collective bargaining agreements; to advocate for the improved quality of education, research and scholarships at The City University; to serve as the public representative of the instructional staff of the City University and other members of the bargaining units of the Professional Staff Congress; and to cooperate with other City University employee and academic organizations and student bodies in order to advance the interests of the faculty, staff and students of The City University and the community it serves; to cooperate with other educational, professional and economic interests and the welfare of all workers. PSC/CUNY is exempt from Federal income taxes under Section 501(c)(5) of the Internal Revenue Code under a blanket exemption of the AFT. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Purpose of Statement - The accompanying statement was prepared for the purpose of determining the fair share cost of services rendered by PSC/CUNY for instructional staff employees represented by, but not members of Professional Staff Congress/CUNY. The accompanying statement is not intended to be a complete presentation of PSC/CUNY s financial statements. Method of accounting - The statement of total expenses and allocation of expenses between chargeable and non-chargeable expenses is presented on the accrual basis of accounting. Depreciation - Depreciation expense is computed over the assets estimated useful lives, three to thirty years, by the straight line method. Management Estimates and Assumptions - The preparation of the statement of expenses and allocation of expenses between chargeable expenses and non-chargeable expenses requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates
7 NOTE 3. DESCRIPTION OF THE BASIS FOR CLASSIFYING CHARGEABLE EXPENSES AND NON-CHARGEABLE EXPENSES The following descriptions of chargeable and non-chargeable expenses were used for this audit. They are based on PSC/CUNY s interpretation. a. Chargeable Expenses - The following descriptions of chargeable expenses were used for this audit. Chargeable expenses are those expenses incurred by PSC/CUNY for representational activities, which benefit all employees represented by PSC/CUNY regardless of membership status. Representational activities are those duties that PSC/CUNY performs, as the representative of the employees in relations with their employers, including collective bargaining, contract administration, grievance arbitration, organizing and other activities germane to the collective bargaining process. Activities that are classified as chargeable include, but are not limited to, the following: preparation for and negotiation of collective bargaining agreements; contract administration including grievance activities; representational efforts to enhance and maintain a united front, allegiance and commitment among bargaining unit employees; arbitration proceedings, preparation and associated costs; research and agreement analysis and other information retrieval processes to support representational activities; services and other activities ancillary to collective bargaining that are principally designed to strengthen PSC/CUNY as a cohesive and effective bargaining agent including social and human relations; retiree programs, which are related to collective bargaining and are not political; representational activities that initiate and implement PSC/CUNY as a representative of the employees in the bargaining process, including educational programs; legislative activities which are related to collective bargaining; communications, publications and public relations efforts directed to represented employees concerning representational matters and related germane activities; governance of PSC/CUNY, including conventions, general executive board meetings and expenses, and judicial administration of the constitution and bylaws; internal administration of PSC/CUNY including formulating policy, financial administration, and representational matters; education and training for PSC/CUNY s officers and employees concerning collective bargaining and representational matters; and litigation costs and professional fees incurred to support internal governance, collective bargaining and representational matters and the other germane activities described above
8 NOTE 3. DESCRIPTION OF THE BASIS FOR CLASSIFYING CHARGEABLE EXPENSES AND NON-CHARGEABLE EXPENSES (continued) b. Non-Chargeable Expenses - The following descriptions of non-chargeable expenses were used for this audit. Non-chargeable expenses are those expenses incurred by PSC/CUNY for the benefit and advancement of the members which are not considered representational activities for non-members. Non-chargeable activities are those services that are ideological or political in nature and not related to collective bargaining or the employment-related interests of members; those that are exclusively for the benefit of members; and those that otherwise are not considered germane to representing non-members in the collective bargaining process. Activities that are considered as non-chargeable include, but are not limited to, the following: legislative, political and government activities other than those that are chargeable as related to collective bargaining and job preservation; political activity expenses which include support at the federal, state or local level; public relations and other efforts directed toward functional activities that are not considered germane to representing non-members in the collective bargaining process; and PSC/CUNY publications to the extent they report on non-administrative or non-representational activities. Other non-chargeable examples include charitable contributions, per capita tax or fees paid to a labor organization to the extent they are spent on non-chargeable items if known; expenses related to non-chargeable items; and the cost of benefits that are not available to non-members. NOTE 4. SIGNIFICANT FACTORS AND ASSUMPTIONS USED IN THE ALLOCATION OF EXPENSES BETWEEN CHARGEABLE EXPENSES AND NON-CHARGEABLE EXPENSES The following descriptions of chargeable and non-chargeable expenses were used for this audit. They are based on PSC/CUNY s interpretation. a. Affiliation fees - Affiliation fees paid to the New York State United Teachers, American Federation of Teachers and other affiliated organizations are allocated between chargeable and non-chargeable expense based on those organizations' calculation of chargeable/non-chargeable expense percentages as provided. b. Salaries, employee benefits and payroll taxes - Payroll expenses have been allocated to chargeable and non-chargeable based upon all work activities of each employee for the year ended August 31, 2017 based on the descriptions in Note 3. Employee benefits and payroll taxes were allocated based on the overall salary allocation percentages. c. Governance - Conferences and meetings are considered chargeable, except for items of a political or ideological nature on meeting agendas. Governance expenses related to elections are chargeable, and committee expenses are treated as non-chargeable. Expenses for chapter budgets and health and safety activities are 85% and 99% chargeable, respectively
9 NOTE 4. SIGNIFICANT FACTORS AND ASSUMPTIONS USED IN THE ALLOCATION OF EXPENSES BETWEEN CHARGEABLE EXPENSES AND NON-CHARGEABLE EXPENSES (continued) d. Public relations - Expenses for organizing are largely chargeable, related to new member organizing and contract implementation outreach. Expenses and contributions for community relations and cultural activities are not directly related to the function of representation and are considered to be fully non-chargeable. Public relations and advertising expenses related to the contract campaign are chargeable; those related to the budget campaign are non-chargeable. Expenses for publishing of the Clarion newspaper were allocated based on the content of articles using the descriptions in Note 3. Articles considered political or ideological in nature are non-chargeable. e. Building expenses - Building expenses (rent, utilities, real estate taxes and machine rental) were allocated based on the overall salary allocation percentages described in 4b above. f. Administrative expenses - Office, insurance and other administrative expenses were allocated based on the overall salary allocation percentages described in 4b above. Dues processing expenses relate to all bargaining unit members and are considered 100% chargeable. Postage and delivery expenses were allocated based on review of the printed and delivered materials using the descriptions in Note 3. g. Professional fees - Expenses are allocated between chargeable and non-chargeable based on the service of the providers using the descriptions in Note 3. h. Contract and budget campaigns - Contract campaign expenses benefit all employees in the collective bargaining unit and, therefore, are largely chargeable. Budget campaign expenses also benefit all employees in the bargaining unit, but, because they occur primarily in the legislative arena, are treated as non-chargeable. i. Stipends and reassigned time - Most of the work activities of each individual who received a stipend or reassigned time for year ended August 31, 2017 involved contract administration or union administration and, therefore, most of these expenses are chargeable. A small percentage of some individuals activities were deemed nonchargeable based on the descriptions in Note 3. j. Depreciation expense - Depreciation of furniture, equipment and leasehold improvements was allocated based on the overall salary allocation percentages described in 4b above
10 NOTE 5. BASIS OF EXPENSE CLASSIFICATION The expenses included in this statement are based on the total expenses of the Professional Staff Congress of the City University of New York totaling approximately $20,225,596 in its audited financial statements for the year ended August 31, 2017, net of deductions made to NYSUT and AFT per capita expenses of $10,856,
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