Attachment E

REPORT
of the
NSS SECRETARY/TREASURER

June 2004

OVERVIEW

Since the March 04 Board of Governors meeting we’ve:

1. Posted on the NSS Financial Information page for down-load:

a. NSS FY02-03 fiscal report
b. NSS FY03-04 Operating Fund fiscal report
c. NSS FY04-05 budget
d. Summary of Total NSS Finances Over Time
e. Summary of NSS Operating Finances Over Time.
f. Detail of NSS Operating Expenses Over Time
g. Analysis of NSS Fixed and Incremental Costs
h. NSS Membership Dues Revenue Over Time
i. NSS Bookstore Sales Over Time
j. Recent detailed monthly expense reports

 

DISCUSSION

FY03-04 Operating Fund Fiscal Report
Essentially we spent $15K more than our income last year. Our income was way below budget, both in membership dues and bookstore sales. A one-time $20,000 windfall that came with the release of excess encumbered ACA funds basically saved us. The bottom line for the year showed a surplus of $5,060.83. We cannot remain solvent if this continues. We must increase our revenue or decrease the cost of our publications and services, or both.

NSS Dues & Membership Trends
Both Regular membership and Associate membership have been steadily decreasing since the General dues category was initiated. In their place General membership is increasing.

See the NSS Financial Information page for more detailed membership trends.

NSS Bookstore Sales
NSS Bookstore sales have been less in recent years than they have been in the past, and sales for the last fiscal year were the lowest for 10 years.

See the NSS Financial Information page for a more detailed report of bookstore sales revenue over time.

Liability Insurance
The cost of liability insurance for NSS general liability, property, NSS conventions and NCRC training courses has increased

Rate of Inflation
The NSS dues structure has been the same (with the exception of adding a "General Membership" class) since May 1, 2001. At the U.S. Consumer Price Index rate of inflation since we adopted our $33 rate our dues should now be $38.

FY 04/05 Operating Budget
The FY 04/05 operating budget does not fully fund our current program of our publications and services. On the agenda for our summer meeting is a series of motions to adjust our operating budget to fully fund our current publications and services. Our projected operating income is not adequate to cover these additional expenses. The source of funds to pay for these adjustments must be the NSS restricted funds that are free of contract obligations or donor restrictions.

AV Library Fund
Building Repair Fund
Equipment Fund
Salons Fund
News Restricted Fund
Journal Restricted Fund
Convention Surplus Fund
Operating Surplus Fund
Guide to Responsible Caving Fund
Web Site Restricted Fund

There's $16,000 in income from the Convention Surplus and Operating Surplus Funds in the FY 04/05 operating budget The other funds also provide income in the FY 04/05 operating budget. Taking more money from these funds reduces the amount available for future years. It does not solve the long-term structural problem of decreasing income (membership dues and bookstore sales) and increasing expenses (insurance and general economic inflation). It merely postpones dealing with the issue for a year and makes the situation worse by robbing future years of the Convention Surplus and Operating Surplus Funds income.

The FY04-05 budget is based on an assumption of an agreement with NCKRI in which they pay the NSS $22,500 to cover one-half of the expected cost of publishing the JCKS. However it is not certain if an agreement will be reached, nor if the necessary funding will be available to NCKRI. The budget should reflect true expected cost of providing the Journal until such time we have entered into a contract with NCKRI. Basing the budget on unproven and unsecured income results in an artificially low figure for budgeted expenses, and an inaccurate financial picture of the Society. Therefore it is important to approve the motion on the agenda that will amend the budget to reflect the true expected cost to the NSS of producing the Journal.

FY 05/06 Operating Budget
Let us now make policy decisions upon which to base our FY05/06 operating budget. Hence the motion on the agenda to begin the process of deciding what part a dues increase should play in resolving this problem.

Great Expectation Donations
The rate of donations to cover the Great Expectations mortgage has slowed.

FY 2003 - $29,643.00
FY 2004 (up to Jan 2004) - $74,394.13
Feb 2004 -         $5,267.00
March 2004 -     $452.00
April 2004 -       $1,239.00
May 2004 – $527.30

AUDIT

Jerry Mercer Inc. visited the NSS office in April pursuing their audit of our FY02-03 fiscal report

We are waiting for fiscal reports from the NSF and NCRC so we can complete the final FY03/04 NSS fiscal report and audit.

CURRENT S/T DEPARTMENT MEMBERS AND AGENTS OF THE TREASURER

Stephanie Searles works almost full time performing NSS accounting and fiscal functions. Dave Irving helps Stephanie reconcile LedgerMaster accounting at the end of each month and develops fiscal reports. Ted Kayes prepares the NSS budget, working with the officers. Kevin Smith serves as a consultant for our audit and tax return preparation effort. I lead all of the Department’s efforts and participate in all of the above activities and more.

Secretary-Treasurer - Paul Stevens
Chief Accounting Officer - David Irving (Finance Committee)
NSS Budget - Ted Kayes (Finance Committee)
NSS Audit and Tax Return Consultant – Kevin Smith (Finance Committee)
NSS Restricted Funds Accounting – Nancie Carrigan (Finance Committee)
NSS Operations Manger – Stephanie Searles
Insurance Committee - Ted Kayes (Chairman)
Personal Property Committee - Vacant
2004 NSS Convention Treasurer – Martina Golden
2005 NSS Convention Treasurer – Scott Fee
NSS Convention Bank Account Reconciler – Peggy Kesner
MCNP Cooperative Agreement Treasurer - Rick Williams
MCNP Cooperative Agreement Bank Account Reconciler - Marilyn Walker
Caves & Karst Education Program Treasurer – Peggy Kesner
Caves & Karst Education Program Bank Account Reconciler – Cheryl Jones
NCRC Financial Officer – Berta Kirchman [Bank Account Reconciler]
NCRC Northeast Region Financial Officer – John Evans
NCRC Eastern Region Financial Officer – Steve Myers
NCRC Central Region Financial Officer – Anmar Mirza
NCRC Pacific Northwest Region Financial Officer – John W. Punches
NCRC Southwestern Region Financial Officer – Bob Rogers
NCRC Western Region Financial Officer – Mark Bowers
NCRC 2004 Seminar Financial Officer– Kathy Welling
NSS News Advertising Treasurer - Bert Ashbrook
NSS News Advertising Bank Account Reconciler – Nancie Carrigan
Fine Arts Salon Treasurer – Wm Shrewberry
Fine Arts Salon Bank Account Reconciler – Marian McConnell
Junior Speleological Society Treasurer – Rick Bowersox
Junior Speleological Society Bank Account Reconciler – Ted Kayes
Corporate Bank Account Reconciler – Dave Irving
NSS Office Bank Account Reconciler – Nancie Carrigan
Credit Card Account Reconciler – Ted Kayes
Payroll Bank Account Reconciler – Nancie Carrigan
Restricted Fund Accounts Reconciler – Nancie Carrigan

FUTURE ACTIVITIES

Our priority between now and the next Board meeting will be to continue to process our financial transactions in a timely manner and provide timely reports. Other tasks include:

Obtain independent professional certification that our FY02-04 accounting records conform to Generally Accepted Accounting Practices and properly state our finances.

Paul Stevens
NSS Secretary/Treasurer

6/21/04