| EXECUTIVE
SUMMARY |  Every good meeting
has three elements: an agenda,
a site that’s conducive to the meeting
objectives and a contract that guarantees
you get what you need on the budget you
expect.
If you are planning
many meetings in the same
city or have a large transient travel
budget, it may pay to negotiate with a
national hotel chain for one flat rate
for all your meetings. But otherwise
it’s more economical to negotiate a
price for each individually.
Conference centers
may seem expensive because of
their all-inclusive pricing, but they
often end up costing the same as a
meeting in a hotel. And they’re more
comfortable and conducive to sitting for
long periods.
Watch out for
cancellation and attrition
clauses. Even if you are positive your
meeting will not be canceled, bad things
can happen.
Make sure employees
understand what they may accept
from suppliers. Have a clear written
policy about accepting gifts from
outside vendors, and make sure your
meeting planners understand whether it
applies to frequent-traveler points.
Will Tate,
CPA, is vice-president of Management
Alternatives, a travel consulting firm
based in Norwalk, Conn.
Joan Eisenstodt
is founder and chief strategist of
Eisenstodt Associates, a Washington,
D.C.-based conference consulting,
facilitation and training company.
Their e-mails are
willtate@comcast.net
and
eisenstodt@aol.com
, respectively.
Cheryl Rosen
is managing editor of the JofA
and former executive editor of
Business Travel News. Her views, as
expressed in this article, do not
necessarily reflect the views of the
AICPA. Official positions are
determined through specific
procedures, due process and
deliberation.
|
 ave you heard the one
about the Wall Street meeting planner who bought
tens of thousands of dollars worth of silver at
Tiffany and charged it all to her boss’s meetings
budget? How about the planner who paid himself
$3.5 million for choosing a site? Or, more likely,
the secretary who accepted a free week in Vegas in
return for bringing her firm’s business to one
national hotel chain? Ask the people who plan your
off-site meetings and you’re likely to find they
accept frequent-traveler points from hotels—even
though they would never consider accepting an
expensive gift from any other supplier.
|
The T&E Tab
The meetings budget line of
American companies totaled $122.31
billion in 2004—making up more than
36% of the hotel industry’s operating
revenue and 17% of the airline
industry’s operating income.
Source: Convention
Industry Council,
www.conventionindustry.org .
| Meetings are
purchased for and by every executive under every
department and budget line, from marketing to
sales to travel—and they add up to a huge budget
item that’s exceptionally difficult to control and
track. In keeping with the “what you can’t count,
you can’t manage” theory, meetings also are
exceptionally vulnerable to waste, mismanagement
and out-and-out fraud. With travel and
entertainment making up the third-largest budget
item at most businesses, meetings are an arena
where CPAs who institute processes and oversight
can boost the bottom line in a big way. In
this article we’ll begin by outlining the steps
for planning a great meeting and getting the best
return on your budget. Then we’ll offer best
practices for dealing with the ethical issues that
can get a planner and a business into trouble.
CPAs can use the ideas to plan meetings and
institute meetings policies for their own firms,
or share them with clients to keep budgets and
processes in line with the changing times.
| | A Sample
Meetings Policy
 Unless prior
approval is obtained from a
vice-president or more senior
company official, an employee
may not accept payments of any
amount or any single gift,
entertainment or favor valued in
excess of $200 or entertainment
that is unreasonably lavish from
customers, vendors or any other
person or entity with which the
company conducts or is
considering conducting business.
Employees may not
solicit gifts, entertainment
or favors of any value from
persons or firms with which
the company actually or
potentially does business.
Under no
circumstances may employees
place vendors, customers,
suppliers or business partners
in a position where they may
feel compelled to make a gift,
provide entertainment or
provide personal favors in
order to do business with the
business. Employees may
request something of value for
their own personal benefit
from a vendor or customer only
if the cost is incurred by the
employee. Source:
Meeting Professionals
International,
www.mpiweb.org .
| |
KEEP YOUR EYE ON THE PRIZE
Whether the point is to gather partners or
prospects, customers or trainees, every good
meeting is made up of three basic elements: an
agenda to serve as a framework for useful
discussion and sharing of information, a site
that’s conducive to the business at hand and a
contract that guarantees you get what you need on
the budget you expect. The best way to start is by
thinking about what you or the meeting sponsor
wants to achieve and working your way backward.
End every meeting with an action plan of
measurable steps for which someone is accountable.
Often people start planning a meeting with
one objective in mind and then add more and more
as the date gets closer. “As long as we’re getting
together,” five different people say, “let’s also
do this and this and this”—until the agenda gets
so overcrowded that the original goal is buried in
trivial issues. Put your goals in priority order,
set your agenda and don’t let clutter get in the
way.
| | A Sample
Procurement Policy
Purpose
This document offers
guidelines to reinforce
consistency and efficiency in
expense policies for the
company, with the goal of
ensuring compliance with company
policies as well as reducing the
growth rate of expenses.
Compliant and cost-conscious
employees have a business impact
on the company and its
shareholders. By following these
policies, the company will be
able to more effectively meet
its business goals and deliver
greater benefits to
shareholders, the company and
employees.
Using This Policy
All employees are
responsible for being familiar
with and adhering to these
policies.
The guidelines in
this document take precedence
over any other expense
policies unless the business
unit has stricter policies.
All managers must
exercise diligence and
scrutinize all reimbursable
expenses.
Purchase Orders
Purchase orders
(POs) are required for all
purchases of more than X
dollars.
All POs must be
issued and approved in
accordance with policy before
any work is performed by the
vendor.
All managers must
exercise diligence and
scrutinize all reimbursable
expenses.
POs for X dollars
or more can be issued only
against vendors who are under
contract with the company.
POs should be for
the entire contract; splitting
POs to circumvent
authorization levels is
prohibited.
No work without a
PO; no PO without a contract.
Competitive Bid
Competitive bids
are required for all purchases
greater than X dollars.
Competitive bids
are recommended for all
purchases greater than X
dollars.
Contract Policy
Legal must be involved
with all contracts. Contracts
are required for
All purchases
greater than X dollars.
Vendors on-site.
Projects that
will last longer than three
years. Source: Meeting
Professionals International,
www.mpiweb.org .
| |
PICK THE RIGHT PLACE
The locale of a meeting sets the tone, so
choosing a site is the biggest and most complex
decision you’ll have to make. As with every good
business decision, start by considering the needs
of your customer. Think about who will be
attending and why. First consider the type
of venue. Do you want a small and intimate hotel
in which to cozy up to customers or a midtown
locale that’s easily accessible to salespeople
coming from out of town? Will you stay in one room
the whole time, or do you need to break into small
groups? Will your partners be expecting a
high-quality hot lunch or will sandwiches and
cookies suffice? A serene executive conference
center 25 miles out of town may work fine for an
executive retreat, but if families are invited,
are there things for their spouses and children to
do and easy access to the activities? Over
the past few years, many firms and companies have
tried to consolidate their travel with a small
number of preferred hotel chains. Whether trying
to get everyone to book their meetings in a
Sheraton is worth the trouble depends on how many
meetings you hold each year and how much transient
travel your firm does. If you’re planning 60
seminars in your hometown, or if your firm already
has a preferred hotel program, it may make sense
to negotiate one flat rate. But usually it will
cost less if you get the best available rate at
the time each meeting is being held.
| | A Sample
Conflict-of-Interest Policy
As an employee, you are
expected to act at all times in
the company’s best interests and
to exercise sound judgment
unclouded by personal interests
or divided loyalties.
Avoid the appearance
as well as the reality of a
conflict of interest.
A conflict of interest
exists if your circumstances
would lead a reasonable person
to question whether your
motivations are aligned with the
business’ best interests. Here
are some of the most common
conflict-of-interest situations:
Use of company
information for private gain.
Friends and
family stock.
Outside
activities—nonprofit and civic
organizations whose goals
compete or conflict with those
of the business.
Moonlighting.
Service on a
board of directors or
technical advisory board whose
goals compete or conflict with
those of the business.
Spouses, domestic
partners or relatives as
suppliers, vendors or business
partners.
Kickbacks and
rebates by suppliers or
vendors.
Gifts from
vendors, suppliers or
customers.
Honorariums.
Outside
Activities—Nonprofit and
Civic Organizations
The business may
encourage its employees to be
active in their communities
and to volunteer their time to
bona fide charitable,
educational, civic and trade
organizations. Participation
in these types of activities
does not generally require
prior approval, but you should
guard against possible
conflicts of interest or the
appearance of such conflicts.
If participation in an outside
activity has the potential to
cloud your judgment, prevent
you from acting in the
company’s best interests or
create an appearance that you
will not act objectively, you
must obtain prior written
approval. Source:
Meeting Professionals
International,
www.mpiweb.org .
| |
The very lowest price, of course, will be at
that little limited-service motel on the highway
where the facilities add up to one meeting room
and an ice machine. The management will be
thrilled to have you and boy, will it be cheap.
But what you really need is a place that’s
conducive to fulfilling your objectives and making
people comfortable—and if it costs a little more,
you’ll likely get a better return on your
investment. For meetings involving
partners, executives and customers, consider
executive conference centers and unusual venues.
The price quoted by conference centers may at
first sound high compared with that of hotels, but
their all-inclusive pricing—for meeting room,
snacks, meals and audio-visual equipment—makes
planning simple and often is not in the end any
more costly than a similar package at a hotel.
Note that you should never hold a staff retreat in
your own building; that makes it too easy for
people to slip back into their offices,
undermining the dynamics that are the reason for
getting together in the first place.
| |
 If you plan a
number of meetings each year,
have a lawyer draw up a standard
contract for you to give the
entities with which you
negotiate.
Write an ethics
policy that spells out what
meeting planners may accept
and what they may not.
| |
MAKE YOUR DEAL
One of the biggest but most common mistakes
unsophisticated meeting planners make is to think
that every meeting contract is standard and they
can just sign on the dotted line. Make sure any
contract you sign covers all the things you need
to hold a successful event. Include all the
details on the meeting space, the hours, the
number and details of sleeping rooms and meals,
and most important, the cancellation and attrition
clauses that will apply if you have to cut back on
the number of attendees. Just as you’d expect a
client to ask a CPA for tax advice, ask an
attorney or other expert to review the contract
for any large meeting. If you sponsor a
lot of meetings and conferences, have a contract
of your own drawn up, so you can give your
contract to the hotel rather than vice versa. Even
if the hotel balks at some of the finer points, it
will be a useful starting point for negotiations.
Unlike a usual hotel reservation that you
can change until the day before your arrival,
meeting contracts can have stiff cancellation
penalties. This is where most newly minted meeting
planners go astray. Even if you believe there is
no question that the firm will hold its annual
customer conference in April, consider what
happened when Hurricane Katrina hit New Orleans.
Consider also the reverse: What would happen if
the hotel canceled? Natural and man-made disasters
can ripple through the hotel industry, bumping
meetings across the country. We saw a lot of that
after Katrina, when hotels from Las Vegas to New
York canceled smaller groups to accommodate larger
ones that were displaced. Think carefully about
the number of attendees to which you commit, and
about what the hotel might do to make things right
if it cannot accommodate you at the last minute.
Get everything in writing. | |
| AICPA RESOURCES
AICPA Antifraud
& Corporate Responsibility
Resource Center, http://antifraud.aicpa.org/
.
Ethics and Fraud
in Business: Cases and
Commentary, http://antifraud.aicpa.org/Resources/
Tools+and+Aids/Case+Studies/Ethics+and+Fraud+in+Business+Cases+and+Commentary.htm
. Cases involving ethical
dilemmas in management.
Conference
AICPA Controllers
Workshop
Las Vegas, Nev.
July 20–21, 2006
CPE
Fraud in the Governmental
and Not-For-Profit
Environments: What a Steal!
by Linda M. Dennis (#
731921JA, text; # 180922JA,
DVD).
OTHER RESOURCES
Web sites
Meeting
Professionals International,
www.mpiweb.org .
Networking, training,
conferences and a Global
Corporate Circle of Excellence
toolkit.
Convention
Industry Council,
www.conventionindustry.org
. Information, resources
and a Certified Meeting
Professional certificate
program.
| |
THE POINT ABOUT POINTS
No meetings discussion is complete without
considering the issue of frequent-traveler points.
Hotels besiege planners with offerings—gifts, free
stays, site visits—and make it easy for your
employees to rationalize accepting them. The perks
can add up quickly to free vacations in exotic
locales. Many small firms consider
frequent-traveler points a way to reward partners
or their assistants, and that’s fine if it’s a
conscious decision. But businesses that hold more
than one or two off-site meetings a
year—especially publicly traded companies—should
have an ethics policy that spells out how
employees should handle perks being offered by
potential suppliers (see “
Opportunity and Responsibility ”).
“The whole point of Sarbanes-Oxley is that
people should not make business decisions based on
what they gain personally,” says Christine Duffy,
chairwoman of Meeting Professionals International
and president and CEO of Maritz Travel Co. in St.
Louis. “You don’t want anyone in your organization
basing decisions on getting a free vacation. But
you can’t hold people accountable unless you have
made your policy crystal-clear.” Another
increasingly common issue involves meeting
planners’ setting up side companies to accept
commissions on the meetings they’re planning
instead of negotiating the best deal for the firm.
In our opinion, this practice is outright fraud.
To prevent it, make sure that a disinterested
party reviews every meeting contract.
WRAPPING UP THE AGENDA
The “travel and entertainment” budget is a
huge expense item at most companies—wide enough to
leave plenty of room for waste and abuse. A little
forethought can help you sidestep even the hint of
wrongdoing and at the same time transform an
ordinary meeting into one that gives you a return
on your investment for months and years to come.
| |
Opportunity and
Responsibility by Christine
Duffy
 n
today’s post-Sarbanes-Oxley
environment, corporate finance
organizations have to focus on
the broad implications of how
meetings are run and
documented. Meetings are a
fragmented budget line, and
often the expenses and costs
aren’t broken out. So they
don’t have the kind of
transparency that’s required.
At the end of the day, the
finance department has the
line of sight into what’s
happening across the
organization and is
responsible for minimizing the
company’s risks. The
first responsibility of
management and auditors is to
really understand how much the
company is spending on this
category. You’d be surprised
how many companies don’t have
this information readily
available. The opportunity,
then, is to look at the big
picture across divisions,
rather than letting each group
make its own purchasing
decisions. We’ve often seen
businesses where one division
is paying a hefty cancellation
fee while another area of the
same company is booking a
meeting at the same hotel. If
there was a centralized
process for booking meetings,
the second group could simply
replace the first. The answer
is to centralize at least the
collection of meetings and
travel spending data, and for
someone in the finance
department to document how
meetings are planned, put some
guidelines in place and
leverage the company’s
meetings volume. A
couple of years ago the point
of having a formal meetings
management program was to save
costs, but now it’s also a
matter of risk management and
Sarbanes-Oxley compliance. You
need to ensure that the
business is operating meetings
and events consistently and
documenting what it is
spending. In the Tyco trial,
for example, one issue was a
big event held in Sardinia;
another was the fact that
Dennis Kozlowski’s wife was
paid for planning the
company’s meetings. Management
needs to be aware of what the
company is spending money on
and whether there are
appropriate business
objectives and documentation
around what’s charged to the
company.
Christine Duffy
is chairwoman of Meeting
Professionals International
and president and CEO of
Maritz Travel Co. in St.
Louis. | | |
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