Subject: FWD: another comment on ifcss budget

From: [email-masked]
Date: Sat, 21 Aug 1993 18:04:02 -0500 (CDT)

From:	IN%"[email-masked]" 20-AUG-1993 23:21:40.64
To:	IN%"[email-masked]"  "Multiple recipients of list CCNL"
CC:	
Subj:	Suggestions for IFCSS's Proposed Budget

Date: Fri, 20 Aug 1993 23:21:22 -0600
From: [email-masked]
Subject: Suggestions for IFCSS's Proposed Budget
Sender: Newsletter on Chinese Community
 <[email-masked]>
To: Multiple recipients of list CCNL <[email-masked]>
Reply-to: [email-masked]
Comments: To: [email-masked]

Dear Readers:

        After reading Zheng-Ping Chen's comments and the attached IFCSS
Budget Proposal, I would like to put foward a few suggestions as listed
below.

                              I. Revenues

1) Presumably, "donation from society" and "grant from foundations" are
credited solely for routine operations rather than any specifically designated
purposes, namely, flood or the human rights activity.  Otherwise, the
expenditures must be debited accordingly for those specific purposes.  If
not, it violates the "double entry" principle of accounting.
        Somehow, it doesn't feel sure that $250,000 can be projected from
donations and grants to cover the operating costs.  It would be much better
if the sources of donations and grants be recorded accessable to the public
so that the concerned people may make better judgments with the knowledge of
not only where money goes but where it comes from.

2) It looks that IFCSS does finance the services with user charges (besides
donation/grant) to the primary recipients of the services.  It would be then
interesting to know what kind of the services are being provided that can be
quantified and monetarized for the non-profit organization like IFCSS.

3) IFCSS is nationwide, but so loosely organized to the extent of making it
impossible to charge membership fees.  Certainly, there are other reasons
working  to enhance the impossibility, including that of the "free rider"
(it is irrational to pay for something that can be obtained for free) and
the fear of political repurcussion (registering name in the account book, just
like phone book, will inflict insecurity).  A remedy for it is to charge
membership fees by college/university and require reserves from each sub-
organization.
        Looking at the composition of revenues, own sources (service charges,
user fees, and membership fees) only accounts for 40%.  Due to the increasing
fiscal stress everywhere, the significant decline of relative contribution of
donations and grants are readily apparent, which means that IFCSS will have to
be more reliant on revenue from its own sources.

4) Since budgeting is a continuous process, relevant information on the actual
budget and variances should also be prepared and passed on.  Without knowing
the previous year's spending, it is difficult to estimate the current year's
allocation.
        It is amazing that IFCSS turned out to have a surplus of $69,500 from
the last fiscal year, when almost everybody can still recall IFCSS's refusal to
phone calls and outcry for manpower help during the heyday of CSPA.  Obviously,
this huge amount of dollars failed to be utilized timely to alleviate the
pressure when they were badly needed.

                              II. Expenditures

1) Various degree of appropriation control might be exercised by
manipulating "control point."  A great degree of public control will be
typified if expenditures are stated in the most detailed level.  For example,
compensation is in terms of each full time staff member's monthly amount of
$2,000, as opposed to a mere total sum of annual amount.  Incidentally, the
part time accountant gets no compensation when $96,000 is divided up among the
four full time.
        Alternatively, a lesser amount of control would result if expenditures
are stated by such vague categories as "Working Committees" and "Round-Table
Meeting," as Chen already noticed.  Almost none of control could be exercised
by the public when salaries as one object-of-expenditure are surprisingly
nowhere to be found for the IFCSS president and vice president.  The President
of the United States earns $200,000 a year.  What about ours? Or, are they
voluntary or disguised as staff members?  Questions posed this way are not
meant to make fuss or fun of it, but to make sense of budget in its genuine
meaning of transparency.  Although the control point is at the budget makers'
discretion, at any event, the donors, the public, the council members, and
the accountant must be able to capture data in sufficient detail to permit
budgetary control and accountability.

2) Another way to improve budgetary control and accountability is to make
CAFR (Comprehensive Annual Financial Report) and various explanatory notes
available for public scrutiny so as to let it known how budget is executed, or
how money is used/abused.

                              III. Budget Format

        A couple of format problems merit attention simply for the purpose of
making the budget look right.
1) The last year's remaining fund balance should be put at the last section of
the budget, given that it is not counted as revenue but transfer.  A modified
version should look like this:

A.      Estimated Revenue
          Donation                              $120,000
          Service                                100,000
          Grant                                   30,000
                                                ---------
                                                 250,000

B.      Expenditures
          ......                                  ......
                                                ---------
                                                 300,700

C.      Excess of Estimated Revenues
        under Expenditures                       -50,700
        Estimated Fund Balance-Beginning
        of FY 1993-94                             69,500
        Estimated Fund Balance-End              ---------
        of FY 1993-94                           $ 18,800

2) Expenditures should be stated in a consistent manner and in the sequence of:
a. organization units
b. programs, functions, and activities
c. object of expenditure
As can be seen, the proposed budget is not so well organized in this order of
coherence

        Finally, since my suggestions are forced out from instinct entirely
stimulated from nothing more than the attached budget itself, I am open for
any other opinion and insight.

Bai Yan
8/20/93