March 2006
of the
- Attachment E -
The audit of the Society’s books for the 2004–05 Fiscal Year was completed at the end of November 2005. The Society received a good report from the auditor. It might be noted that, though discussed at the July Board meeting, an Audit Committee has not yet been designated.
Those of the staff who had dealings with the auditor generally thought well of him and his work.
The Society’s tax return, form 990, was timely filed.
This is the last fiscal year that will end on April 30. As a result of the bylaws change made at the fall meeting, the next fiscal year will only be eleven months long, beginning May 1 and ending on March 31, 2007. This will give the Society a chance of completing the audit and filing the tax return by the end of September. Most non-profit organizations end their fiscal year on December 31st and have their financials ready for publication by the end of May and this is what donor organizations generally have come to expect.
A budget for the 2006–07 fiscal year was approved by Executive Committee. It is a fairly lean budget though it calls for revenues and expenses of $529,000. It was a bit more difficult than some budgets because it could project only eleven months of revenue, but many of the expenses are not reduced from the current twelve month budget; the News will have only 11 issues, but the Members Manual and the Journal will have the same number of issues.
The Society has the funds to carry out all of its programs. This sounds like a good thing, but it may be a reflection on the absence of new initiatives.
The Society is negotiating to obtain a new general liability policy at a reasonable cost. There is reason to believe that the current insurance carrier will issue a new policy with only a nominal premium increase (no more than 5%.) The current policy will lapse on March 31.
A binder for an inland marine policy has been obtained for the NCRC trailer that carries their equipment, which they value at $70,000. The NCRC requested this, as the trailer will be transported to Puerto Rico to support training there this spring. The cost, projected at $1,500, will be reimbursed to the Society by the NCRC.
The Society’s bookkeeping software continues to function adequately. The program is idiosyncratic and appears to require excessive staff time to input data and resolve glitches. This is not the greatest problem that the Society faces, but the need and high cost to replace it at some point in the future surely should be on the list. It would be prudent to develop solid requirements for a replacement program well ahead of the need (While the Society has personnel with the historical background and necessary experience.)
The Board approved, by an e-mail vote, the disbursement of funds to the Western Cave Conservancy for the purchase of Rippled Cave from the Pacific Slope Cave Acquisition Fund. That fund held only donor restricted funds; no NSS operating funds were involved. The Western Cave Conservancy complied with the donor’s restrictions. This is a good example of the Society facilitating the purchase of a cave by a conservancy and is among the sort of services the Society can provide to the caving/conservation community.
Primarily through the efforts of Scott Fee, an application has been filed with the Combined Federal Campaign (CFC.) In the past when the NSS has submitted an application to the CFC, the application has been rejected for one reason or another before the end of February. This year the audit numbers matched the tax return numbers and the application appears to be working its way through the system. If the NSS is approved, it will be very important to notify all those members who are in the military service or employed by the federal government that they have another giving option when it comes time to donate to the CFC.
An adjunct to preparing the CFC application was the creation of an Annual Report that has been posted on the website. The CFC requires an Annual Report and no longer requires that it be published in hard copy, except that a paper copy must accompany the application. The Biennial report was attractive and moderately expensive, but did not satisfy the CFC requirement. Now the NSS has an Annual Report that cost next to nothing, but the time of the volunteers.
If the Society continues with the CFC, it will need a new annual report next year. This report should focus on the many volunteer services provided by the Society and its internal organizations. The Combined Federal Campaign requires that the Society show, with specific examples, that it is providing services to people in at least 15 states. This would be an ideal vehicle for highlighting the IOs’ activities.
The Society has many costs that are essentially fixed, such as the News, Journal, office and staff expenses, and insurance, though their costs tend to increase each year. If the Society cannot significantly reduce expenses, as it appears it cannot, then it is obligated to increase income. No one wants to increase dues. The two things that would go the furthest toward increasing the Society’s revenue would be to increase membership and to publish more books. Are those areas being given sufficient emphasis?
The Foundation has been requested to provide each director with a copy of the Foundation’s Treasurer’s Report.
The Secretary-Treasurer Elect, Peri Frantz, assisted with the budget process and has been delving into various aspects of the position. She will become the Secretary-Treasurer on May 1, 2006.
Peri and I will engage an auditor for the 2005–06 fiscal year before I leave office. If there is an Audit Committee in place, then they will be directly involved in the selection of the auditor and of course it will be the Audit Committee to whom the auditor will eventually report.
This will be last report as Secretary-Treasurer. It is an honor to have served in this position and it could not have been done without the help of Dave Irving, the Chief Accounting Officer.
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Secretary-Treasurer – Ted Kayes
Secretary-Treasurer Elect – Peri Frantz
Chief Accounting Officer - David Irving (Finance Committee)
NSS Budget – vacant (Finance Committee)
NSS Audit and Tax Return Consultant – Kevin Smith (Finance Committee)
NSS Restricted Funds Accounting – vacant (Finance Committee)
NSS Operations Manger – Stephanie Searles
Insurance Committee - Ted Kayes (Chairman)
Personal Property Committee – vacant
NSS Grants Administrator – Ted Kayes
2006 NSS Convention Treasurer
– Marla A. Pelowski
2007 NSS Convention Treasurer – Jo Ellen Kimmel
NSS Convention Bank Account Reconciler – Peggy Kesner
Engaging an auditor for the 2005–06 fiscal year
Closing the Society’s books in May.
Reactivating the Personal Property Committee
Ted Kayes
NSS Secretary/Treasurer
2/26/06