NSPE Board of Directors

Item 10.2 Attachment

NICET REPORT December 7, 2007

NSPE Board of Directors 2008 Winter Meeting San Juan, PR

Leonel Saenz, Jr., SET NICET Observer

The audited NICET Financial Statement for FY 2007 reported a year-end balance of $313,574. This positive year-end balance, combined with the positive carry-over from FY 2006, provided NICET with an Ending Fund Balance for FY 2007 of $374,679. Additionally, the NICET Reserve Fund ended the year at $271,810. At its October 2007 meeting, the NICET Board of Governors voted to transfer $250,000 of the FY 2007 Ending Fund Balance to the NICET Reserve Fund.

The NICET staff expanded again in FY 2008 to 30 full-time positions and one part-time position in order to handle the increasing work load and to bring greater efficiencies to headquarters operations. Currently all but three positions are filled, and the search continues to fill these remaining positions.

NICET was awarded a $49,140 research contract on February 1, 2007 through Auburn University for the Federal Aviation Administration’s Airfield Asphalt Pavement Technology Program. Work on this research contract is now completed, and we are awaiting acceptance of the final report by the FAA. It is hoped that a contract for the next phase of this project – to actually develop a training/certification program for Airfield Asphalt Pavement Technicians – will be awarded in the near future; and that NICET can win that contract as well.

Testing volume for FY 2008 is proceeding as projected toward the 13,500 tests budgeted, with an increasing number of those being administered via Computer Based Testing (CBT). October 2007 numbers indicate that testing volume for this fiscal year is exceeding FY 2007 volume by 10.5% -- which exactly on-target with budget projections.

In early October 2007, it was discovered that a Fire Alarm Industry training manual had compromised the integrity of at least one NICET examination by publishing current NICET test questions within the manual. Legal efforts are underway to remove the offending materials from the marketplace and to recover damages from the authors of this manual based on violation of NSPE/NICET held copyrights. In the meantime, use of the compromised NICET examination has been discontinued, and tighter restrictions have been implemented on reference materials allowed into NICET testing sessions. Investigations into other compromised examinations are ongoing. NICET December 7, 2007 Report – continued Page 2

Certification program development activities continue in the areas of Automatic Sprinkler System Layout, Construction Materials Testing, Fire Alarm Systems, Highway Maintenance and Renovation, Roadway Design, Stormwater and Wastewater System Inspection, Transportation Systems Construction, and Electronic Security Systems. Industry Partnerships are expected to help this effort with contributions of $100,000 or more annually.

The NICET Marketing Plan for FY 2008 is concentrating on increased communications with all stakeholders through electronic and print medium, participation in more Industry events to showcase NICET certification, gaining additional media coverage in “engineering industry” publications through low-cost articles, editorials, press releases, etc., and continued efforts to update/improve the NICET website to be even more customer friendly.

At its October 2007 meeting, the NICET Board of Governors approved three proposals for IT Capital Improvements in FY 2007 that were not previously budgeted. The first proposal was for the purchase and configuration of an Item Banking and Test Publishing System and a new Candidate Management System at a total cost of about $300,000. The second proposal was for a new File Imaging System at a total cost of about $35,000. The third proposal was for a new VoIP Telephone System at a total cost of about $40,000. It was agreed to amortize the $375,000 investment in these three Capital Improvements over three years, for an annual cost of $125,000.

A joint Task Group with the NSPE Licensure & Qualifications to Practice Committee has prepared a joint NSPE/NICET Position Statement on the roles and responsibilities of engineering technicians and engineers regarding “design” and “layout” of fire protection systems. A preliminary final draft has been approved “in concept” by the NSPE Board of Directors, the SFPE Board of Directors and most recently by the NICET Board of Governors. It is expected that a consensus final draft can be prepared for presentation to all three groups in early 2008.

Respectfully Submitted,

NICET Board of Governors Leonel Saenz, Jr., SET, Chair James H. Wathen, PE, PLS, Vice Chair Philip L. Gaughan, SET, Recording Secretary Danada McMurtry, Public Member William J. Aaron, Jr., SET Arthur B. deWit, PE Rudolph Henry, CT Wayne D. Moore, PE NICET BOARD OF GOVERNORS Recommendation for NSPE Board of Directors Action January 5, 2008 Meeting San Juan, PR

Recommendation #1: Addition to NICET Reserve Fund

Background on Recommendation — The Final Audited June 2007 Financial Statement for NICET reports an Ending Fund Balance of $374,679, and a Reserve Fund balance of $271,810.

Actual Recommendation for Board Action — In view of the surplus revenue realized for FY 2007, the NICET Board of Governors recommends that $250,000 of the final NICET Ending Fund Balance be transferred into the NICET Reserve Fund.

Estimated Impact on Budget for FY 2008 — There is no impact on the NSPE Budget for FY 2008 with approval of this action, and the impact on the NICET Budget is a positive $124,679.

NICET Board of Governors: Leonel Saenz, Jr., SET, Chair James H. Wathen, PE, PLS, Vice Chair Philip L. Gaughan, SET, Recording Secretary Danada McMurtry, Public Member William J. Aaron, Jr., SET Arthur B. deWit, PE Rudolph Henry, CT Wayne D. Moore, PE NICET BOARD OF GOVERNORS Recommendation for NSPE Board of Directors Action January 5, 2008 Meeting San Juan, PR

Recommendation #2: Additions to NICET Budgeted Expenses for FY 2008

Background on Recommendation — The Final Audited June 2007 Financial Statement for NICET reports an Ending Fund Balance of $374,679, and a Reserve Fund balance of $271,810. With approval of NICET Recommendation #1 dated January 5, 2008, NICET would have an additional $124,679 in its operating revenue for FY 2008, and a Reserve Fund in excess of $521,000. Additionally, NICET had $1,203,000 in Set-Aside Renewal and Examination Fees as of October 31, 2007 Three needed IT Capital Improvements were not budgeted in FY 2008 due to insufficient operating revenues. These Capital Improvements include an Item Banking and Test Publishing System as well as a new Candidate Management Systems to adequately handle Computer Based Testing candidates; a new File Imaging System to digitally capture paper records; and a new digital VoIP Telephone System. The total projected cost of these three Capital Improvements is about $375,000 – but when amortized over three years, equals about $125,000 annually.

Actual Recommendation for Board Action — In view of the surplus revenue realized from FY 2007, the NICET Board of Governors recommends that the NICET Budget for FY 2008 be amended to include the $125,000 amortized expense for the three IT Capital Improvements noted above.

Estimated Impact on Budget for FY 2008 — There is no impact on the NSPE Budget for FY 2008 with approval of this action, the impact on the NICET Budget for FY 2008 is a negative $125,000 (which is almost completely offset by the positive $124,679 impact of Recommendation #1) and the additional cash expense for these three IT Capital Improvements can be easily covered by NICET Set-Aside and/or Reserve Funds if necessary.

NICET Board of Governors: Leonel Saenz, Jr., SET, Chair James H. Wathen, PE, PLS, Vice Chair Philip L. Gaughan, SET, Recording Secretary Danada McMurtry, Public Member William J. Aaron, Jr., SET Arthur B. deWit, PE Rudolph Henry, CT Wayne D. Moore, PE