REPORT
of the
NSS SECRETARY/TREASURER

- Attachment E -

OVERVIEW

Since the March 99 Board of Governors meeting we’ve:

• Transferred our accounting system from DacEasy to LedgerMaster
• Completed the FY98/99 Statement of NSS Revenue & Expenses
• Completed the FY98/99 Statement of NSS Restricted Fund Activity
• Completed the April 30, 1999 NSS Balance Sheet
• Hired a professional payroll company for our office staff salaries

ENCLOSURES (separately provided)

E-1) Final Report, FY98/99 Revenue and Expenses
E-2) FY98/99 NSS Restricted Fund Activity
E-3) April 30, 1999 NSS Balance Sheet
E-4) National Speleological Foundation Financial Statement for NSS Trust Funds – April 30, 1999
E-5) Graph of NSS Membership Totals over Time

DETAILS

FY98/99 Fiscal Report

Dave Irving and Camille Mueller spent the week ending May 28th at the NSS office completing the accounting for FY98/99. The Final Statement of FY98/99 Revenue and Expenses, NSS Restricted Fund Activity, and Balance Sheet as of April 30, 1999 are provided as enclosures (1), (2) and (3).

We ended FY98/99 with an operating surplus of $12K, an anomaly caused by the $15K we received by selling our interest in oil wells and $5K we received from the 1997 NSS convention. Bookstore net income ($50K) was $36K below what we budgeted. Revenue from dues ($297K) was $12K higher than budget. The deficit in operating income compared to our budget was offset by office expenses ($147K) which was $17K less than budgeted.

Financial Statement for NSS Trust Funds

Attached (#E-4) is the National Speleological Foundation’s report on the NSS Trust Funds as of the end of April 1999. In summary:

The balance in each fund is adequate to meet the purpose for which they were established.

Note that the NSF transferred $25K from the Life Membership Fund to the NSS Endowment Fund as we requested.

At their board meeting on March 20th the NSF approved the NSS Library/Museum Fund contract change as proposed by the NSS.

FY99/00 Budget

The FY99/00 NSS operating budget approved by the Board of Governors is posted on the NSS www site. Based upon the results of the last six months of FY98/99 it appears we should adjust FY99/00 operating revenue as follows:

Our new estimate for dues revenue assumes a small increase in membership based upon the monthly membership totals from December 97 through May 99, see Enclosure (5). Our new estimate for net bookstore income assumes we can improve revenue by 12% over FY98/99 and earn an additional $6K by aggressive marketing.

The approved FY99/00 operating budget projects a $11K operating deficit. If we adjust it to reflect our latest revenue estimate the FY99/00 operating deficit would be $16K. The Society has sufficient reserves to absorb a short-term deficit budget, but cannot do so for long. We’ll continue to monitor FY99/00 revenue and expenses and if necessary recommend changes to the budget at the October 99 Board meeting.

Accounting Operations at the NSS Office & Improvements in Our Process

All NSS office deposits and payments are now being entered in LedgerMaster. We log purchase orders into LedgerMaster accounts receivable when companies buy books from us on credit. For NSS office orders we match bills with purchase orders and log the match in LedgerMaster before payment. We use email and purchase orders to assure officer and committee chairman oversight and verify services are delivered in response to appropriate orders by authorized individuals. We use LedgerMaster to print all NSS checks except those related to the Mammoth Cave Restoration Project, NSS conventions & NCRC. The software automatically logs these payments into our accounting system against accounts payable. We maintain a file of all bills, vouchers and NSS committee requests for reimbursement by the month to back up the payment record in LedgerMaster We send invoices for accounts receivable with the transaction logged automatically into our LedgerMaster accounting records and use it to provide monthly statements. This process significantly reduces our risk of double or missed payments and fraudulent checks, increases the overall accuracy of our accounting and our ability to manage our cash flow and bookstore inventory for transactions processed through the NSS office. It does not cover our Mammoth Cave Restoration Project, NSS Convention and NCRC transactions except in aggregate since they are currently conducted outside of our central LedgerMaster-based accounting system.

We’ve used a purchase order system for NSS office purchases for some time and will extend it to our NSS publications by the fall. The NSS publication editors will order goods and services using a uniquely identified purchase order for each transaction. We do not plan to pay any publication bills in the future without there being a matching unique purchase order signed by our publication editors. Such a system will allow the editors better control over their expenses and make it much easier for Camille to attribute each expense to the proper account.

Professional Payroll Service

At the beginning of May we hired ADP, a professional payroll service, to:

• calculate NSS employee salaries for each pay period and provide NSS funds to each employee by NSS check or electronic transfer
  
• calculate NSS employee FICA, Medicare, medical benefits, pensions, workman's compensation, federal & state taxes deductions for each pay period
  
• periodically forward NSS funds for employee FICA, Medicare, medical benefits, pensions, workman's compensation, federal and state taxes deductions to the proper accounts in external organizations (mostly government)
  
• periodically file the proper reports to federal & state governments.

Dave Irving maintains oversight over the ADP service.

National Cave Rescue Finances

I continue to seek a consensus with NCRC on how to integrate those NCRC financial transactions conducted through NSS bank accounts into the Society’s accounting system.

NSS EC Administrative Policies

I’m working with Jim Wilson, the 1996 NSS Convention treasurer, to codify a set of business and financial policies and procedures to be used by future NSS convention treasurers. Once we have a good draft we’ll circulate it for review to develop a consensus.

Collection of Outstanding Debt

We have yet to be reimbursed by the NSS life member for the $376 check he wrote at the 1995 convention that was not paid by his bank due to insufficient funds in his account. Repeated attempts to collect have been made. His behavior leads me to conclude that he does not intend to pay his dept to the Society.

Current S/T Department Members and Agents of the Treasurer

Dave Irving’s and Cheryl Jones’ roles continue to evolve. Dave is working with our CPA to prepare our federal tax submission. He continues to monitor NSS office bank accounts and LedgerMaster reports. Cheryl is responsible for the NSS budget and works directly with EC members on most NSS business and finance issues.

Secretary-Treasurer - Paul Stevens
Chief Accounting Officer - David Irving (Finance Committee)
NSS Budget & Business/Finance Issues - Cheryl Jones (Finance Committee)
NSS Operations Manger - Camille Mueller
Insurance Committee - Ted Kayes (Chairman)
Personal Property Committee - Mike Gunderloy (Chairman)

1998 NSS Convention Treasurer - Bill Stringfellow
1999 NSS Convention Treasurer - Peggy Kesner
2000 NSS Convention Treasurer - Nick Schaer
NSS Convention Bank Account Reconciler - Scott Fee
NSS Convention Business & Fiscal Policies - Jim Wilson

MCNP Cooperative Agreement Treasurer - Karen Dennis
MCNP Cooperative Agreement Bank Account Reconciler - Marilyn Walker
NCRC Financial Officer – Butch Fieldhaus
NCRC Northeast Region – John Evans
NCRC Eastern Region – Barbara Ritts
NCRC Central Region – Michael Summers
NCRC Pacific Northwest Region – John W. Punches
NCRC California Region– Peri Frantz
NCRC 1999 Seminar – Peri Frantz

NSS News Ad Accounting - Bert Ashbrook

FUTURE ACTIVITIES

Our priority between now and the October 1999 Board meeting will be to continue to process our financial transactions in a timely manner and to provide timely reports. Other tasks include:

• File our FY98/99 federal income tax report
• Adopt a purchase order process for NSS publications and codify it in the Board of Governors Manual
• Enter the FY99/00 budget into our LedgerMaster accounting software
• Develop a LedgerMaster template for our periodic financial reports
• Make substantial progress on integrating NCRC into the Society’s financial system.

Paul Stevens
NSS Secretary/Treasurer