Subject: [Discussion]<Dong Chen> reply to Liu Cheng (1/2)

From: [email-masked] (priv=-10 D.C.)
Date: Sun, 16 Jan 94 00:29:10 -0500

Mr. Chair,

	First, I appreciate the hard work of Finance Committee. Due to
this we will have probably the most comprehensive finance auditing in
the IFCSS history. But, nevertheless, there are many things wrong in
the process.

	Here is my reply to Mr. Liu Cheng's article.

	For Liu Cheng's criticism of the current Treasurer, I am not
sure how much I can agree or disagree, because I did not go through the
account myself. But surely the Finance Committee and Mr.  Liu does not
appreciate how complicated the IFCSS finance account can be.

	I know one small company here with only 3 persons. They even
keep an half time treasurer. Certainly the IFCSS's finance situation,
transactions are much more complicated.

	Also, from talking to the Treasurer of the 1st term, also to Gen
Xiao who tried to do the accounting in his term, I know the IFCSS's
account is very complicated. In fact, lacking sole duty treasurer is
part of the reason that we have messy accounting situation for the first
three terms.  Gen Xiao hired Ms. Jiang, our current Treasurer because he
felt it was beyond what he could handle and he wanted to professionize
our accounting system.

	Later, Mr. Liu claimed "three months of her work can be done by
two layperson in 4 hours". Do you really believe that ? Do you know the
different between organizing a file and glancing through the file ? I
can read a novel in two hours, but can I then claim that writers should
be able to write books in a few hours ? I know this is not a very good
example, but the point is there. Think about it, if you two, non
professional, have no background in accounting, can do accounts in a
few hours, why CPA need to spend time studying accounting for more than
two year? Also, I have to point out that the better an account is
maintained, the easier and lesser time it takes for reviewing. So from
what you said, I might conclude that our account is very well
maintained.

	BTW, when later he claimed that the reputable CPA will do the
accounting for us for "A LITTLE OVER TWO THOUSAND A YEAR", that is
totally wrong! What the firm proposed is (read the proposal again
please!) that they will charge $2300 for the year end compiling of our
account, and under the condition that we have an accountant do the
everyday accounting the right way.

	Saying that the to-be-hired CPA will do what Treasurer
supposedly should do is inconceivable.  Suppose we had so called
"qualified" accountant, then don't the CPA need to do anything for the
proposed job ?  If you read the proposal of "Cohen, Rutherford,
Blum&Schott, PC", the job of our treasurer include at least "typing of
select confirmations if deemed appropriate, retrieval of all required
financial and tax information, preparation of all bank reconciliations
and requested workpapers, and conformance to our standard client
assistance schedule", etc. And the CPA's job is just "compilation of
the accrual basis financial statements", "annual tax returns" and other
"accounting and consulting services"

	Actually, the simplest way for us to evaluate how well Ms. Jiang
performed is to talk to some accounting firm. Just to see how much they
would charge for them to do the everyday accounting for us. Also, we
will have our opportunity to ask the CPA at the D.C.  Working Meeting
after he/she evaluates the whole finance situation of IFCSS.

	The second big part of the article is his insisting the missing
$230K.  For this, I would blame more to the Finance Committee than
anybody else right now. Why ? Because Finance Committee did not do
their home work, or not enough before they reached their conclusion.
Have you ever see how a professional do inspection ? You first have to
try to work out the difference with HQ, ask them questions, talk to
them for several rounds; then you state what you have known and what
you still not know with solid facts, numbers. But what we see here is
that Finance Committee just claimed there are 230K missing with such a
poor writing and supporting facts, even before trying to get an
explanation from HQ.  Here, I am not even try to work out the possible
overlap as pointed out by the "open letter", nor try to figure out if
IFCSS can afford to have 230K missing without notice (see Anzhi's
article in the ifcssvc net, if you want, I can forward to you).  Even
further assume what FC claimed is the case, have we, the council member
ever been informed ?  Why didn't FC bring such a serious SERIOUS
finding out in the 2nd teleconference ?  It is irresponsible and
irrespective to other council members for the FC to post such an open
accusation without informing us. I know the FC will blame HQ for not
cooperative. But is uncooperative the same as confirmation of missing
230K ? If FC is really serious about the reputation of IFCSS and of
itself's, just state the fact (e.g.  complaining about HQ's bad
attitude or something like that), do not present your wildest guess as
the truth. And most importantly, respect other council member.

	The last part is for CPA bidding. What I want see is an
objectively comparison of these for proposal. but after reading why HQ
recommend Jeff Lin, the only thing I can say is Finance Committee has
lost basic trust with HQ. Further cooperation between FC and HQ is not
possible now.

	I will post my analysis of bidding CPA in next mail.

In conclusion, my points are,

=> I will judge our Treasurer's work only after consulting the the CPA
   who has evaluate our whole finance situation

=> The finance committee's claim is not well supported

=> The Finance Committee's "open letter" is irresponsible

=> Even though I do not know as much accounting as our FC colleagues, I
   can still see many obvious misleading/wrong point of articles/letters
   of FC.

Dong Chen

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