As I completed my Conference financial report, our investments were up 6.3% with 29% of our monies in fixed income/bonds. The S&P for the same period is up 6.6%, which means our accounts are doing very well. Since Mark Sikorski and I began managing these accounts, our reserves have increased from $2.05 million to $5.09 million.
The auditing firm identified areas of our financial practices that may be of concern. One pertains to an individual’s ability to defraud the organization. Based on our size, it is very difficult to get rid of this issue because we have one person predominantly dealing with all of the financial transactions, but the goal is to be aware and take steps to mitigate risk. We always heed the auditors’ warnings, and have numerous checks and balances established to minimize opportunities for wrongdoing.
This year the auditors were also concerned about the amount of money being held by PORAC chapters with varied methods of oversight for disbursement, so the Fiscal Management Committee tasked Kim and me with establishing guidelines for chapters on how to properly use their funds. In addition, during last year’s audit, the auditors were concerned about chapters potentially stockpiling money. This year, based on diligent work by Kim and the various chapter treasurers, we were able to provide supporting evidence as to how chapters were using their funds. This helped alleviate some of the auditors’ concerns, and they suggested PORAC continue monitoring the use of chapter funds. Please keep in mind that the intent of the chapter reimbursements is to help chapters run their local business and benefit their members. Chapter funds should be spent on furthering the goals of PORAC and its members.
PORAC’s Budget Committee has been very busy, looking at areas where the budget could be streamlined to increase efficiency and reduce unnecessary expenditures. Rest assured that PORAC’s budgetary decisions are never made out of ill will or retribution, but instead to ensure that we are being responsible with members’ monies. Such minor adjustments may seem insignificant, but over time they add up to significant amounts that can be used to strengthen the organization’s financial footing or be applied toward other projects.
That brings us to next year’s budget. Over the past few years, I have presented the members with an unbalanced budget. As a private business, we are under no legal requirement to have a balanced budget. Our budget is a road map of where we plan to navigate throughout the year, with a calculated financial ending point. Sometimes things change — some roads become longer than we thought, while on others we find shortcuts or realize we don’t have to travel in that direction. Last year, we found several opportunities to save money, but there were also a few longer treks than expected. Unfortunately, once we tallied the entire trip, we were a bit overextended on our projected income; however, we are going to stick with this road map, make the necessary adjustments along the way and curtail costs whenever possible.
Fiscal Management Committee
Your Fiscal Management Committee (FMC), composed of Board members from each region, met in May to review PORAC’s vouchers from last year’s Conference through April 2016, and in August to discuss the results of the audit and how to address them. The FMC did not find any discrepancies in how PORAC is reimbursing its directors. In addition, they reviewed the contracts and other information from the past Conference. Aside from realizing that the cost of a gallon of coffee at hotels is outrageous, all other matters were consistent with providing the best training venue for our members while keeping our finances in mind.
The PORAC building is continuing to show its age, and we have had to invest in a few fixes. Unfortunately, due to the current sentiment toward law enforcement throughout the nation, we felt the building needed additional security on both the exterior and the interior. The Board authorized an extensive capital improvement project to purchase a state-of-the-art camera system that provides excellent video security, which we are able to access remotely. We also had to conduct some significant repairs on the PORAC house’s foundation, which was shifting more than it should. We researched the possibility of legal action against the builder, but learned the builder had claimed bankruptcy. We selected a very reputable company with a track record of success to conduct the repairs, which were completed in September.
As we move toward the new year, I remain fully committed to being the fiscal watchdog of PORAC’s financial operations. I wish you and your family a safe and wonderful holiday season.