From @UBVM.CC.BUFFALO.EDU:owner-china-nt@UGA.CC.UGA.EDU Wed Dec 8 12:03:55 1993 Reply-To: yaxin wang Sender: China-Net Subject: CCF #9325, 12/8/93, IFCSS Activity Report. Comments: To: china-nt@uga.cc.uga.edu To: Multiple recipients of list CHINA-NT ==+==+==+== C h i n e s e C o m m u n i t y F o r u m ==+==+==+=== Wednesday, December 8, 1993 (Issue No. 9325) +=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+= Chinese Community Forum (CCF) is a journal published on China-Net. CCF is dedicated to the discussion and debate on the issues related to the Chinese community. The opinions expressed here do not necessarily represent the views of the Editorial Board of CCF. Contributions to the discussions and suggestions of new topics are very much appreciated. +=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+= Table of Contents Author | # of Lines ============================================================================ 1. A Debate among IFCSS Activists on CSPA......................Luo Ning 110 --- A recollection of an IFCSS activist 2. Response to the Accounting Inspection of Council Finance Sub-Committee .............................................................IFCSS HQ 45 3. On Implementing the Council Resolution on Financial Inspection of IFCSS HQ .......................................................IFCSS Council 112 4. Treasurer's response to the memo from Inspection Team ...............................Jiang Zuihong, the IFCSS HQ Treasurer 121 5. A Note on Our Memo......................IFCSS Council Inspection Team 93 6. Reader's Response: Comment on Financial Report................Qing Lu 30 ============================================================================ ===========***==========***==========**==========***==========***=========== From The Editor +--------------------------------------------------------------------------+ This issue of Chinese Community Forum is focusing on IFCSS activities. We carry a short historical memory of IFCSS. And five articles regarding to the financial inspection report of IFCSS Council's inspection team, which was carried in the CCF issue 9320. We hope through these articles we bring you a better picutre of the financial situation of IFCSS and the operation of IFCSS head quarter. +--------------------------------------------------------------------------+ ===========***==========***==========**==========***==========***=========== 1. A Debate among IFCSS Activists on CSPA......................Luo Ning 110 --- A recollection of an IFCSS activist +--------------------------------------------------------------------------+ Some netter pointed out that IFCSS is now probably best known for its lobbying on CSPA which has eventually provided tens of thousands of CSS the permanent residency in the US. In the issue of CCF on Oct 6 (#9307), Lai Anzhi reflected on the lessons learned from this successful story which belongs not only to IFCSS, but also to the entire CSS community. What I would like to present here is an "insider's" story little known outside, which I believe will add more dimensions and "colors" to this part of history and will help us to understand better the mechanisms of IFCSS and collective actions. Before the Fourth Annual Convention of IFCSS in the summer of 1992, there was a "Round Table Meeting" in early June. The officers and some staff of IFCSS and some guests were invited together to discuss the preparation for the coming convention and the future direction of IFCSS. During the meeting, a fierce debate broke out among the participants on whether or not IFCSS should actively engage itself into the CSPA lobbying. Contrary to the "common impression" that IFCSS activists only cared about their own green card prospect, the strong objections among the participants to IFCSS's active lobbying CSPA included all those arguments seen on public nets which challenged the moral value of this action. What was more was the frustration experienced by many IFCSS activists during the so-called "J-1 Lobbying" in 1989. One of the speech during the meeting characterized typically this feeling (I paraphrased the speech in the following): "During the J-1 Lobbying in 1989, many of us spent a lot of effort. Some of us sent thousands of dollars from our own pockets to fly to DC and stayed there for months for lobbying. We had not only to overcome the apathy of the CSS public and learn our way, but also to face the risk of political persecution if the lobby failed and we had to return to China, since some people were making reports to the Chinese consulates about our activities. Some even openly debunk us as 'traitors' of our country. However, when the Executive Order to protect Chinese students was eventually signed by President Bush, such 'reporters' in my local school were among the first ones went to the Immigration Office to replace their J-1 visas. "Why do we have to work for these kind of people who benefit from us but stab us from behind?! If we need protection, we could go for political asylum easily. We don't need such a blanket protection." Some of the participants also suggested that the IFCSS should lobby for a modified bill by which only those individuals who signed a letter openly expressing the fear of being persecuted would be allowed to give a PR. However, there were also strong supporters of the CSPA lobbying. The argument was not only based on the expectation that such an action would win wide support from CSS, but also based on the principle, since what CSPA was based upon was rights in general, not needs of specific group of individuals. A case by case admission would entirely negate the original legitimacy of the bill. What had been decided then is well-known now. However, I am not quite sure if the decision to fully support one of the bills proposed in the US Congress, which is now known as CSPA, was mainly as the outcome of that debate, or because that IFCSS had little influence on what could be proposed or modified in the Congress. This I leave to better knowledged participants or historians to answer. However, the interesting part of this story has not finished here. The transition of IFCSS leadership took place about a month later during the Fourth Annual Convention of IFCSS. The newly elected president, Mr Geng Xiao, asked the retiring president, Dr Zhao Haiqing, to stay as the Chairman of the Working Committee coordinating the lobbying effort. Zhao Haiqing agreed. Little happened after that for about a month, when many local people were very anxious to know what to do about the lobbying. Then something happened between the HQ and the Committee led by Zhao Haiqing --- they started to fight with each other. The conflict between the two branches was humorously called "the fight between HQ and ZHQ". It was triggered by the dispute on the transition of money between the two terms. The details of the dispute are not clear even today, and are not of interest to this story. However, a by-product of this dispute which no one had anticipated was that there formed a competition of "HQ vs. ZHQ" on the CSPA lobbying. Those who had been involved in the CSPA campaign would not forget the anxiety and the feeling of helplessness in watching the fight between the two camps, which finally led to the breaking up of the ZHQ camp from IFCSS. To certain extent, even the "LAD vs. LASS" controversy today is affected by this dispute. What is interesting is that, looking with hindersight, the overall effect of this dispute to the CSPA lobbying effort is not negative as many had been afraid of, but positive. First, neither the HQ nor the Committe led by ZHQ was active after the annual convention in 1992 on the CSPA until they started to fight each other; second, many strong supporters of the HQ were doubters of the CSPA lobbying at the beginning, but turned to become enthusiastic because they didn't want to see that CSS community's support to IFCSS was "stolen" away from it; third, and I think this is the most important, the general CSPA beneficiary public were forced to develop their own independent judgment as what direction to pursue. The mentality of totally relying on a single "savior" and at the same time burdening him/her with too much expectation and responsibility had to be abandoned, even though this was very painful for many. What lessons could the CSS community learn from this episode? (1) IFCSS is not a monolithic "castle" (Kafka) which can not be reached. You just have to push it at the right spot and at the right time. (2) However, IFCSS has be criticized in many occasions to be very insensitive to the public opinion. In this case, it was the competition between two comparable rivalries forced both of them to appeal for the public support. Not only IFCSS HQ overcame the internal dissenting view to push for an all-out campaign, but also the ZHQ camp had also become fully mobilized, a strong contrast to its previous negligence to the various public opinions on the MFN issue. (3) This one is not so obvious: It was the competition within a framework accepted by all the parties in the contest that benefited the public from which all the rivalries were seaking support. Although ZHQ camp broke up away from IFCSS before the end of CSPA campaign, the objectives had been set and the most lobbying work done. The issue of CSPA was already the focus. Therefore, the split did not harm the campaign very much. After CSPA, if there is going to be competitions between IFCSS and the National Council of ZHQ, the CSS public will not get as much benefit from it as in the CSPA campaign. The reason is simple: Different organizations play different games and they have different rules of game. Unless they enter a game with common rules, which has not happened so far within the CSS community, it is hard to judge the relative excellence of their work. A competition without common rule is more like the Darwinian survival game. I would not say it does not have positive contribution to the community development. It could help to fill the "unoccupied niches". However, if there is no sports-like game, where all rivalries accept a common rule, when the competitors meet on the same niche, what they usually do is not to show their own excellence in order to be favored by the "audience", but to use all possible means, "quick and dirty", to eliminate the opponents, since that is often the most effective and efficient way to win a Darwinian survival game in a short run. Well, if only one survives the game in a short run, what he/she has to worry about the long run? Unfortunately, it is also what we often see among Chinese rivalries. We Chinese have been perceived as adhere to unity, but we also accept the ancient "wisdom": "Dao4 bu dong2 ze2 bu4 zu2 wei2 mou2" (do not try to cooperate with those who don't have the same vision). Can we get out of the deadlock between these two extremes? We could really learn something from the Amerian sports fans. (Received 10/20/93) ===========***==========***==========**==========***==========***=========== 2. Response to the Accounting Inspection of Council Finance Sub-Committee .............................................................IFCSS HQ 45 +--------------------------------------------------------------------------+ Date: October 28, 1993 From: IFCSS HQ To: Council Members and Supervisory Committee Members Subj: Accounting Inspection of Council Finance Sub-Committee The HQ is pleased with the enthusiasm and sense of responsibility of the Council's Finance Sub-Committee to cooperate with the HQ to accomplish the IFCSS internal accounting inspection. To this date, the HQ has sent out upon request the following documents respectively to the three inspection team members: A. General Journal for every IFCSS account for the period from 7/1/92 to 6/30/93 and 7/1/93 to 9/17/93: 1) IFCSS Foundation General Operating Account; 2) IFCSS INC Account; 3) CSS-Protection Account; 4) NED Account; 5) Insurance Return Account; 6) June 4th Foundation Account. B. Bank Statements for all the aforementioned accounts for the period from July 1992 to September 1993. C. Financial Report: 1) Quarterly Report for the Fiscal Year 92-93; 2) Annual Report for the Fiscal Year 92-93; 3) Financial Report for IFCSS Newsletter; 4) Financial Report for the IFCSS 5th Congress; 5) Financial Report for CSPA Center; 6) Financial Report for CSS-Protection Account; 7) Financial Report for NED Grant; 8) Financial Report for Insurance Return; 9) Financial Report for June 4th Foundation. Among these reports, the reports for CSS-Protection, NED Grant, Insurance Return and June 4th Foundation cover both Fiscal Year 92-93 and First Quarter of the Fiscal Year 93-94. The HQ is unable however to respond to the request (memo dated October 26) by Zhou Hongguang (Inspection Team Coordinator) that three copies of all registered checks be sent to the team. As these checks would reveal the names of the numerous June 4th victims we have helped, it is inappropriate for the HQ to distribute their copies. The Inspection Team is well advised to examine the original checks along with proper invoices and documents here at the HQ. The Form 990 for 1992-3 is due on November 15, 1993 according to the US law, and therefore has not been made. We will furnish you a copy once we have prepared such Tax Form for 1992-3. The HQ considers that the aforementioned documents are adequate and thorough, and have met the need for the Inspection Team to accomplish the task of internal accounting. The HQ therefore urges the Team to proceed with the inspection without further delay. ===========***==========***==========**==========***==========***=========== 3. On Implementing the Council Resolution on Financial Inspection of IFCSS HQ .......................................................IFCSS Council 112 +--------------------------------------------------------------------------+ Memo: On Implementing the Council Resolution on Financial Inspection of IFCSS HQ Status: Urgent Date: October 28, 1993 To: IFCSS HQ Cc: IFCSS Supervisory Committee, council-l net From: IFCSS Council Signed by: Dong Liqun, Chair; Ding Yungui, Co-Chair Zhou Hongguang, Coordinator of the Inspection Team Subj: RE: Accounting Inspection of Council Finance Committee While the HQ is pleased with the enthusiasm and sense of responsibility of the Council Finance Committee, it is pitiful that this Committee is not equally pleased with the response of the HQ to the Committee's request. 1. Delay of Documents and Date of Site Examination 1.1 The documents mentioned in the HQ's list has yet to be completed by this week. We feel we would have appreciated more if the HQ had responded to our request more promptly so that we could have progressed faster. 1.2 The Inspection Team will be in Washington, DC on November 5-7, 1993. 2. Financial Report 2.1 The Inspection Team has received the Financial Reports only for the following: 1) Quarterly Report for the Fiscal Year 92-93; 2) Annual Report for IFCSS Foundation, Inc. and IFCSS, Inc Fiscal Year 92-93 However, regarding the following, the HQ has claimed that the Financial Reports have been furnished to the Inspection Team, which is not consistent with the fact: 4) IFCSS Newsletter; 5) the IFCSS 5th Congress; 6) CSPA Center; 7) CSS-Protection Account; 8) NED Grant; 9) Insurance Return; 10) June 4th Foundation. The so-called Financial Reports the Inspection Team has received are merely Summary Sheet. A Financial Report, in the professional practice of accounting, must consist of three parts: Operation Statement, Balance Sheet and Cash Flow Statement. We would like to ask the HQ to carefully check the records before claiming that the Financial Reports for 1) CSS-Protection Account; 2) NED Account; 3) Insurance Return Account; 4) June 4th Foundation Account. have been sent to the Inspection Team. 2.2 Because the Inspection is scheduled to arrive at the HQ in Washington, DC, the time is of essence. The Council requires the HQ provide the Financial Reports for 1) CSS-Protection Account; 2) NED Account; 3) Insurance Return Account; 4) June 4th Foundation Account. and mail out by express mail by Saturday, October 30, 1993. 3. Checks and Tax Forms 3.1 We appreciate the cooperation the HQ has demonstrated regarding this matter. The coordinator of the project, Mr. Zhou Hongguang, has been in closed contact with the IFCSS treasurer, Ms Jiang Zuihong, regarding several technical issues including the copy of registered checks. Due to the fact that some technical considerations and sensitivities are involved, we believe more communications between the Council Finance Committee and the HQ will be helpful and crucial to the inspection and IFCSS' operation. 3.2 The registered checks the Inspection Team requests are ONLY those for two accounts of IFCSS Foundation, Inc and IFCSS, Inc.. This point was failed to be clarified in the communication with the HQ. We are sorry for the confusion about that. This also eliminates the concerns over the confidentiality of 6.4 Foundation account. 3.3 The Council requires the HQ to make a copy of all checks cleared for the operation of the IFCSS Foundation, Inc and IFCSS, Inc. accounts, NOT including the checks related to the 6.4 Foundation Account and mail out by express mail by Saturday, October 30,1993 only to Zhou Hongguang. 3.4 The Tax Form The inspection Team can wait for the copy of Form 990 (92-93). However, the Council requires copies for the previous years, as the Team previously mentioned "each year" rather than only this year, be mailed out by Saturday, October 30, 1993. 4. Responsibility 4.1 It is VERY inappropriate and irresponsible for the HQ to bring the issue to the public before ever having any communications with the inspection team coordinator Mr. Zhou Hongguang, or other members. We hope the HQ can have more direct communications with the inspection team,and restrain yourself from using indirect channels. Again, the appointed coordinator is Mr. Zhou Hongguang, who can be reached through phone, fax, or email. 5. Volunteerism 5.1 It has been not an easy task for the Council members in the inspection team to receive the needed documents and to examine them. They have been spending many hours of their precious volunteer time and working hard on it. The timetable of their work and the details of their progress will be provided to the Council in a report later. Again, your cooperation will be highly appreciated for the sake of the credibility and the future of IFCSS. ===========***==========***==========**==========***==========***=========== 4. Treasurer's response to the memo from Inspection Team ...............................Jiang Zuihong, the IFCSS HQ Treasurer 121 +--------------------------------------------------------------------------+ Thank you for your input and suggestions concerning my work. Last time I tried to answer your concerns while you were in here in the HQ office. Because of the technical nature of the matter and limited time, I may not have made things clearer to you. Now I am taking time to write them down for your reference. For the convenience of clarity, I will quote each of your questions, and then provide my answers to it in the order of your memo. Please let me know if you have further questions. YOUR MEMO BEGINS WITH THE PARAGRAPH: "Our opinion of the financial statements for FY92-93 and FY93-94(First Quarter) submitted for inspection team is presented below for your consideration and cooperation. In order to complete a whole set of financial statements for further examination, the listed information as follows is needed. Certainly we assume that you are familiar with the components of the financial statements--income statement, balance sheet, and cash flow." MEMO QUESTION 1: Cash flow statements for each account. ANSWER: There are no such things as "cash flow statements for each account. You may be confused by the concept of business entity. Financial accounting is concerned with recording and reporting the economic activity. Consequently financial records and reports are prepared for each separate entity. IFCSS as a whole is one such reporting entity, but for those IFCSS accounts (sometimes referred as cash accounts) are only asset accounts of IFCSS. We may have different reports for different programs such as NED or CSPA program for our internal reporting purpose, however IFCSS is the only reporting entity concerning the external financial reports. After talking to Zhou Hongguang, he indicated that Council wants the external reporting format for those reports submitted to Council instead of the existing format which was formally adopted by the Fourth-term Council. Let me explain why some companies need to have cash flow statement. The major purpose of the statement of cash flow is to provide a detailed presentation of results of financial management, as distinguished from operating management. The statement summarize the financing and investing activities of the enterprises. The financing activities means those activities such as sales of the company's own stock, borrowing or lending money. The investing activities means those activities such as purchasing of other company's stock or building or equipment. As you may probably see, IFCSS is entirely different from those economic entities in nature. We have no such activities in our operating management, though we did purchases some equipments. But since these expenditures are very limited, there is no point that we need the cash flow statement to supplement the income statement and balance sheet. We always prepare the statement of cash flow for IFCSS 's final external annual report, but cash flow statements for each account for periodic reports are certainly inapplicable. MEMO QUESTION 2: Standard balance sheet and income statement. Balance sheets and income statements should be prepared strictly according to generally acceptable accounting principles, which means all of the necessary and routine categories ought to be included. For example, Liabilities should include long term and short term liabilities such as A/P, N/P; Income statement should also contain Beginning and End Balance. ANSWER: What you have here are a list of necessary and routine categories which ought to be included in such as A/P (Account payable), N/P (Note's payable). However, many routine items do not exist because of IFCSS's typical type and size of the business. We don't need include those zero value item in the financial statement. But I was told by one member of the inspection team that even we don't have those items such as N/P and I still had to include those items and put zero value in the financial statements. This is not accepted way to present-day financial statements. According to the memo, income statement should also contain beginning and ending balance. Income statement itself has no beginning and ending balance. The bottom line item in income statement is net income. What they real mean here is adding beginning and ending fund balance after the net income line. MEMO QUESTION 3: Agreed fund balance (both Beginning and end) for each account. Note fund balance in the statement must be agreed in accordance with time period assumption. ANSWER: We do present the fund balance in balance sheet (external reports), but not for "each account". Again here, there is the confusion over the basic concept of reporting entity. MEMO QUESTION 4: A complete list of fixed assets and other noncurrent assets. The list should also be added as a part of Liabilities in Balance Sheet. In the same manner, a depreciation plan (including depreciation method) should also be made along with it. ANSWER: A complete list of fixed assets is available at IFCSS HQ. IFCSS has no other non-current asset. The memo said that the list of fixed assets should be added as a part of liabilities in balance. This is a unforgiven error for those who want to express an opinion about the financial statement. Fixed assets only belong to asset section not liabilities section in balance sheet. (Over this and most of your requests---allow me to say fairly and please don't be offended by my frankness---you really need to seek professional advice on the "ABCs" in accounting). MEMO QUESTION 5: Explanatory Notes. These notes are desired for any entry that may cause difficulty and/or confusion in understanding the contents of the entries. For example, miscellaneous revenues and expenses. ANSWER: Explanatory notes will be provided where they are appropriate according to general accepted accounting practices. MEMO QUESTION 6: Copies for each Form 990. It is understood well that Form 990 for the current year won't be released till 15th of this month. Your prompt cooperation is appreciated. ANSWER: Form 990 (Information return for non-profit organization) for the year 1990, 1991 and 1992 are available at IFCSS HQ. Form 990 for 1993 has not been filed yet. MEMO QUESTION 7: A copy of registration document under Maryland Laws pertaining to Nonprofit Organization. ANSWER: Registration document under Maryland Laws is available at IFCSS HQ. MEMO QUESTION 8: A complete report especially for CSPA and 5th Congress with every orginal invoice and receipt. ANSWER: The original report for CSPA and 5th Congress have been submitted to the inspection team. Any suggestion concerning the format and line item are welcome since those report are only for internal purpose, there is much more flexibility. The original invoices and receipts are available at IFCSS HQ. MEMO QUESTION 9: Copies of leased assets such as office, equipments. ANSWER: IFCSS has no leased asset. MEMO QUESTION 10: Total equity (both tangible and intangible) of IFCSS. Note this doesn't refer to cash only. ANSWER: Here is another confusion. In financial statements equity section includes primarily capital stock and retained earnings but not cash account. Cash account is presented in asset section of balance sheet. I don't understand how equity could refer to cash as mentioned in the memo, and what is the meaning of "tangible and intangible" equity. Currently, I am working on the preparation of the information for Form 990 return and compilation of external financial reports. Those reports should be available within two month. We all appreciate the effort and enthusiasm inspection team put in this auditing. It is also recognized that Council financial committee's internal control function is important. Internal control function includes those things such as if certain expense is appropriately approved in the budget or by designated authority, if the procedure for reimbursement complied with financial regulations, if there is any unlawful or illegal activity existing, etc. However, To express opinion or to make a judgement on whether financial statement is presented fairly according to genernally acceptable accounting principles is really a professional job which should be done by the certified public accountant. Only their opinion is publicly recognized and legitimate. This is the normal practice in the business world. One point has to be made is that there are some universal principles every business has to follow. Since IFCSS is operating in such business environment, It should also follow those laws. I think that is one aspect of perfection and professionalization of IFCSS's operation in the future. (Received 11/16/93) ===========***==========***==========**==========***==========***=========== 5. A Note on Our Memo......................IFCSS Council Inspection Team 93 +--------------------------------------------------------------------------+ On the last day of the on-site inspection at the Headquarter of IFCSS (11/6-11/7/1993), the inspection team left a memo intended to give more time for the treasurer to prepare a completed reporting to the Council. Thus far the Council has not received any further reports but a note from the treasurer as shown above. As can be seen, the note shows a sign of refusal to the call of the inspection team and poses some technical questions about accounting. In order to quicken the whole proceedings, we think it is necessary to review with the treasurer some ABCs in accounting and nonprofit accounting in particular (please see the note below). We wish that when the treasurer becomes enlightened, some progress be made instantly in the treasurer's reporting of an accurate picture of the financial situation. 1. The various activities of a nonprofit organization are not only typically considered to form a whole--one entity, but considered to comprise a number of separate fiscal and accounting entities known as funds. Such funds are established to segregate specific activities in accordance with special regulation and restrictions. IFCSS has five funds of such kind with five accounts respectively for the June 4th Fund, NED Fund, Insurance Fund, IFCSS Foundation, Fund, and IFCSS, Inc. Fund. IFCSS's accounting system is actually organized and operated on the funds/accounts basis. Therefore, it should be reported both as a comprehensive entity and separate self-balancing entities. The best format for that is known as CAFR (Comprehensive Annual Financial Report). 2. Statement of Cash Flows is nothing but a statement of cash position--amount of cash earned from operating and financial activities and the availability of them for cash payment. There is not only such thing for the nonprofit organizations, but such thing is required by GASB (Governmental Accounting Standards Board that makes regulations for governments and non- profit organizations) as a part of reporting. 3. The fundamentals of accounting also requires that an income statement reports the revenues and expenses for a specified period in the past. Expenses represents the dollar amount of resources already used up. However, in the Income Statement of Fiscal Year 1992-93, a big portion of expenses (called "estimated") were not even incurred but already deducted as actual expenses from the realized revenues. This resulted in an exaggerated expenses and a lesser amount of surplus for the following term. Even worse, these estimated expenses never became actual in the Income Statement for the FY93-94 (1st Quarter), let alone a violation of the common sense of accounting. 4. The basic accounting principle further requires a reporting of the residual fund balance of the previous fiscal period, be it surplus or deficit, in the financial statements for the following period. In other words, the yearend fund balance of last year will be automatically transferred to the beginning fund of next year. For example, IFCSS earned $472,289 in the revenues for the last fiscal year and left $74,530 at the yearend, which should be documented in the year that follows. But this sum of surplus is not reported in the statements (both Income Statement & Balance Sheet) of this year. As time goes, how many of us can keep track of $74,530? And for how long, if there is no record? If there is no record and we cann't remember, who will use this sum of money at the end? It must be borne in mind that the treasurer is responsible for full disclosure of the financial situation at any point of time. 5. The treasurer must demonstrate compliane with budget and other financial-related legal provisions. Up to now no financial statements have ever been made by the treasurer to compare the actual revenues and expenses with what have been budgeted. Thus, there is no way of knowing whether IFCSS' annual budget has been financially implemented. For example, each term of IFCSS budgets revenue(fees) and appropriation for the Annual Conference within its own fiscal year but never fully pays for the bills of the Conference. Rather, each term leaves the obligation of payment to the next term. This is partially caused by the unusual way of accounting for two different fiscal periods wherein budgets and actuals are divided, not combined. This creates a mismatching between the budget and the actuals, hence imbalancing the annual budget. Budget, if not paralleled with its actuals in the same fiscal period, is of no use at all. The combination of budgeted and actual expenditures means that the expenses for each Conference must be realized for the year period covered by previous budget. Payments for any accrued liabilities of the Conference, as always the case, should be therefore treated as adjusting entries. 6. Also in accordance with the ABCs in the accounting profession, the stewardship responsibilities must be assumed by and prevail in a certain organization. The treasurer is defined as doing the collection and processing of financial data and the reporting of the information to decision makers. The treasurer should be fully aware of his or her duties of following the requirements set forth by the decision makers such as the Council and its Financial Committee. Though it take pains to realize the importance of this, the treasurer is expected to act as quickly as possible as the memo specified. An attitude of indifference will do nothing but further hindering the normal procedures of the inspection team. Note: Sources of information on nonprofit accounting are derived from Robert Freeman's GOVERNMENTAL & NONPROFIT ACCOUNTING and Leon Hay's ACCOUNTING FOR GOVERNMENTAL AND NONPROFIT ENTITIES. The discussion in this essay is intended to boost the general financial improvement of IFCSS as a nonprofit entity. It is highly hoped that none of this discussion be taken as personal by whoever is involved. (Received 11/28/93) ===========***==========***==========**==========***==========***=========== 6. Reader's Response: Comment on Financial Report................Qing Lu 30 +--------------------------------------------------------------------------+ It is very disgusting that Mr. Lin Changsheng resisting the audit of a professional accountant. It makes us very suspicious his motives. Professionalism including advises of lawyers, accountants is exactly what IFCSS needs. The IFCSS have to come under the supervision of the people. the most important thing is the financial situation. Tha annual financial report should be prepared by professional accountant, and an independent audit should be done annually. This is the basic rule of any small business not mention any organization. This information has to be provided properly without misleading the public to ensure the credibility of IFCSS. Anyone trying to block this should be kicked out of the office. I wonder whether he has anything to hide such as 200 dollar hotel bills or several thousands dollars of fancy parties. IFCSS HQ has to be brought under the scrutiny of the public. The president and vice president seems to be above the people and do not response to the public accusation or any questioning. It is sickening. We can not let this happen. One problem with IFCSS is one year term. It is good for preventing dictatorship. But it created one shot mentality. They can do whatever they want after the election since they can not seek reelection. I propose maximum two terms one year each. So it will give them some insensitive for working hard for one more term. I call for all Chinese public, professional or nonprofessional to increase monitoring the activities of IFCSS. Make sure they behave properly. We do not want to see that they mess up and let IRS raid the HQ for tax evasion. Do we? This could happen if these power hunger and money seeking people get their way. (Received 11/23/93) +=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=++ + Executive Editor: Yaxin Wang Executive Moderator: Yan Bai + +--------------------------------------------------------------------------+ + For subscription: mail "SUB CHINA-NT Your-First-Name Your-Last-Name" + + to LISTSERV@UGA (bitnet) or listserv@uga.cc.uga.edu (internet) + + For back issues of CCF: + + anonymous ftp to cnd.org[132.249.229.100]:pub/community/CCF + + For Contribution and inquery write to ccf-editor@ifcss.org + +=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=++