Ag. Item # 14 – Discussion Only of Motion 2010 – 10 – Role of the Treasure ( amending

In this thread, we will debate this motion. But we will not vote on it at this meeting, since in the GL it is only up now for “ first discussion “. The voting on it will take place at the July AGM. But we should debate it now, as the first discussion.

Here is the motion/commentary ( without notes ):

Motion # 2010-10 – Amending Section 8 of Bylaw 3 – Treasurer

Revision # 3, Dec. 22, 2009

Moved: Robert Armstrong Seconded: Paul Leblanc

That Bylaw 3, Duties of Officers, Section 8 – Treasurer - be deleted and that the following replace it:

“ Treasurer

8. ( a ) The Treasurer will be responsible for reviewing the financial records maintained by the Executive Director, or his/her equivalent, who shall:
i) keep the general books of the account of the Federation, in which shall be recorded all receipts and disbursements. He shall have the custody of such books of account and all bank books, cancelled cheques, vouchers, statements, and other documents pertaining to the general bank account or bank accounts of the Federation, other than banking resolutions touching the authority of signing officers, which shall be entered in the Minute Book, and retained by the Secretary.
ii ) from time to time, as may be requested by the President, furnish him with such information as to the financial affairs of the Federation, as he may desire.
iii ) Annually, as of the last day of the fiscal year, shall close the accounts, and shall prepare a Financial Statement of the Affairs of the Federation as at that date, showing all receipts and disbursements, under such groupings and classifications as he may deem desirable, together with a Balance Sheet showing the assets and liabilities of the Federation as of that date, and shall file a copy of these statements with the Secretary, over his signature.
iv ) file a copy of these statements also with the Auditor to the Federation, and shall submit for his examination, such books and records as the Auditor may require to effect an appropriate examination, and issue a Certificate in connection therewith.

( b ) The Treasurer will also be responsible for developing, in conjunction with the President, an annual budget, to be presented by the President for approval to the Assembly of Governors within 1 month of the start of a new CFC administration. ”

Commentary:

The section proposed in Motion 2010-01 telescoped the financial duties so much, that the specifics of what records are to be kept, as set out in the current section, is being lost. There needs to be a statement somewhere of what financial records must be kept, and this section is the place to do that. For this reason we wish to keep the current section, in a slightly amended form. The amendment is that for years the Treasurer has not prepared and maintained the financial records of the corporation – this has been done by the Executive Director. The duty of the Treasurer has been merely to oversee this process. So we have amended the section to make this clear.
Also, the CFC has never operated on a formal budget system. The reason for a budget is to guide spending during the fiscal year, to make certain that spending does not exceed revenue, and the Corporation end up with a deficit. The CFC has just come off 5 consecutive years of deficits averaging $ 30,000 per year. If any corporation is in need of a budget, it is the CFC. We have decided that such budget should be prepared by the new Executive. The proposed motion states that it is to be prepared 1 month before the end of the fiscal year, but this leads to the problem we have seen this year. The old administration prepares a budget for the coming fiscal year, by the end of March, but then the new administration is elected in July, and they have different priorities, and so they then go and “ revise “ the budget. We think it is better to delay the budget to the end of July or start of August, so that a budget with new administration priorities will be presented. As well, it may be that in future, the CFC AGM may be advanced to earlier than July, in which case this would assist in the budget coming in earlier in the new fiscal year. Finally, we have made it clear that the budget by the President, prepared in consultation with the Treasurer, is presented for the approval of the Assembly of Governors.

Again, this motion is off the mark because of its misplaced obsession with having the Governors "run" the corporation.
It is not required, nor is it considered good or common practice, for the budget of a not-for-profit corporation to be approved by the assembly of governors. The budget should be prepared by the newly elected executive, presented for information to the Governors, and the actual results reported to the next general assembly as part of the accountability process requiring audited financial statements.
I will vote against this well intentioned but misguided motion.

On this item I lean towards supporting the proposal. The budget is such a major foundation for the executive's plan of action that it needs close scrutiny and buy in from the governors.

a i, a iii, a iv are all currently done by the office - is there any reason that this should be offloaded from the paid professionals onto an elected (or acclaimed!) volunteer??

b - I think we really need to get into the habit of having the budgets actually be for the fiscal year, none of this voting on a budget 9 months in crap. It should be presented no later than 1 month prior to the start of the fiscal year for discussion and approval.

Hi Chris:

The new section shows that the ED actually is doing the bookkeeping. But the Treasurer, as executive, and though a volunteer, must take responsiblity for assuring that the records are correct. I don't think that responsibility can be shuffled off to an " employee ".

The 2010-11 budget was presented ( and passed?? ) one month before the start of the new fiscal year - congratulations to Maurice.

Bob

OK I missed the part about the ED. So you are basically defining the role of the ED in the paragraph for the treasurer. Not really a good idea.

Yes the 2010-11 budget being early was nice. Why don't we require that, instead of requiring a budget by mid-August?

Hi Chris:

Paul Leblanc and I considered this alternative. There are downsides to both alternatives.

What is good about what we have done with the 2010-11 budget, is that we now have it BEFORE the actual start of the fiscal year on May 1. The problem with this, and we may face it again, is that it is a budget prepared by the " outgoing " administration. David Lavin presented in advance of the July 2009 Edmonton AGM, the 2009-10 budget. What happened? The " new " administration said they had other priorities, and they ( we were already 2 1/2 months into the fiscal year when they got elected ) wanted to revise the budget. In GL # 1, Eric stated:

" it is my goal to have it distributed to the governors the week ending 28 August 2009."

- It was not presented 'til December 2009 ( 7 months into the fiscal year ). Then it was rejected " in principle " by the governors because of lack of executive answering of governors' budget questions before the voting deadline. And then it was too late to bring back a new budget, since it was too late into the current fiscal year. And so we never did have a 2009-10 budget of the new administration ( and the Lavin one had not been approved at the AGM in the light of Eric revising it ). So --- no budget.

In the light of this experience, we thought it better to have the new administration make the budget, despite the fact we'd already be 2 1/2 months into the fiscal year. But we did not want a repeat of what happened this year. So we made it mandatory that the new administration present the buget in August, one month after being elected.

The only other consideration is to change the dates of the fiscal year, and move it to something like Sept. 1 - August 31. That way the new administration budget would be BEFORE the start of the fiscal year. With all the changes being proposed already on many fronts, we did not want to get into proposing this change as well. It is possibly one for another day.

Bob

I don't see the problem with having an APPROVED budget and then the new exec can request modifications if they wish.

Hi Chris:

I agree that is a reasonable alternative. That is the situation we will be in with the 2010-11 budget.

But Paul and I leaned toward an August budget by the new Administration as having the least risk of derailment.

Bob

And I am still of that opinion. Let the new executive get set up, have a look at the books and then formulate a budget.