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Financial Status of Club

Rick_P

During the first part of August, I posted a couple of questions in the forum titled, “Allowing Converted 182’s into Club”,  and Robert Warner, the previous president of the club answered one of my questions with the following comment:  “The first newsletter after our annual conventions will have the highlights of the board meeting which will include our financials.”

 

 (The following information was provided in Newsletter #234)

Treasurer’s Report (Fiscal Year 6/1/2013 through 5/31/2014)

Gross Profit (sic)………………………………………………… $24,170.36

Total Expense…………………………………………………… $37,843.52

New Income (Loss)…………………………………………… . ( $13,504.74 )

 

(I believe this should have been Gross INCOME, not Gross PROFIT)

 

I looked back for any kind of Treasurer’s Report from previous years, and found nothing for

2012-2013,  or 2011-2012, 

 

I found the following for the 2010-2011 Budget:

 

Estimated Gross Income $29,550

Budgeted Expense $38,809

Estimated Net Income ($9,295)

(There was no mention of why this was “estimated” income.)

 

And this report from August of 2009:

Treasurer’s Report (Fiscal Year 6/1/2008 - 5/31/2009)

Gross Profit (sic).................................................................................................$30,325.16

Total Expense......................................................................................................$35,754.76

Net Income.......................................................................................................... -$5,737.60

Total Current Assets (5/31/2009)......................................................................$101,584.02

 

And this report from 2008:

Treasurers Report (6/1/2007 – 5/31/2008):

Total Income ................................................................$35,837.

Total Expenses .............................................................$24,047.

Net Income...................................................................$11,790.

 

All this information brings up several questions and suggestions:

 

The financial “report” provides very little information about the financial state of the club.  It appears that the club has been losing a significant amount of money each year for the past few years, and year 2008 was the only year that it had any positive net income.   Where is all that money going?   If it is to the convention and to other fly-ins, why don’t those fly-in’s charge more to the few members that actually attend, rather than have the entire club cover the costs?   And so what is the club’s current Net Assets ?   If it was over $100,000 in 2009, what is it today?

 

I believe that a decent “Treasurer’s report”  should include two basic documents:   An Income and Expenses statement, and an Assets and Liabilities statement.   Each statement would have sufficient detail to understand where the money is coming from, and where it is going.  For example, the expenses statement would show the costs for each fly-in, the cost of the web site, the cost of the newsletters, insurance for the club, legal fees, and any other costs.   The income statement should show income from member dues, income from the fly-ins, and interest from any investments (the $100,000 must be invested somewhere.)

 

Similarly the Assets/liabilities statement would show total Asset values and where the assets are kept, and any liabilities such as outstanding bills at the end of the fiscal year.

 

If these documents are only going to be provided at the end of the fiscal year (many clubs do this monthly, or quarterly), then someone independent of the treasurer should audit the reports.  

 

And finally, while a summary would be nice in the newsletter, I believe it would be appropriate for this information to be on the web in a section that is visible only to members.  It is not easy to search through a series of old newsletters to find the financial information.

 

So, my suggestion to the board, is that a complete financial report be published for this past year at least (and how about the prior year as well, since there was no information published for 2012-2013), including an Income and Expenses statement, and an Assets and Liabilities statement, and that this information be posted on the “Club Related Issues and Questions” forum.