More Transparency Needed

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  • #1

    More Transparency Needed

    Referring to the CFC's 2012 financial statements (specifically, the Statement of Revenue and Expenditure and note 3 to the statements - see link below), in fiscal 2011 and 2012 revenues from 'other programs' represented approximately half of the CFC's total revenues. Note 3 to the 2012 financial statements indicates that nearly all of these revenues from 'other programs' were derived from the CYCC. Further, the text in note 3 (see below) suggests that all of the CYCC-related revenues were used to send players to the WYCC.

    It seems unlikely to me that the CFC spent nearly $112,000 during fiscal 2012 to send players/family members to the WYCC. Given the significant portion of the CFC's revenues represented by these monies, surely more transparency is required in the CFC's financial reporting, as to both the source(s) of the monies and how they were expended. (I won't be holding my breath, though :) )


    http://chess.ca/sites/default/files/fiscals_2012.pdf

    Olympic donations are designated to provide financial support for participation of Canadian representatives in the International Chess Olympiads. The Canadian Youth Chess Championships (CYCC) entry fees cover the cost of sending players to the World Youth Chess Championships (WYCC). The Kalev Pugi Fund was established as a bequest in the
    Chess Foundation of Canada. Each year interest earned by this fund is transferred from the Foundation to the Federation to provide travel assistance for junior players. Contributions to these programs are recognized as revenue in the year in which the related expenditures are incurred.
    "We hang the petty thieves and appoint the great ones to public office." - Aesop
    "Only the dead have seen the end of war." - Plato
    "If once a man indulges himself in murder, very soon he comes to think little of robbing; and from robbing he comes next to drinking and Sabbath-breaking, and from that to incivility and procrastination." - Thomas De Quincey
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  • #2
    Re: More Transparency Needed

    Originally posted by Peter McKillop View Post
    It seems unlikely to me that the CFC spent nearly $112,000 during fiscal 2012 to send players/family members to the WYCC. Given the significant portion of the CFC's revenues represented by these monies, surely more transparency is required in the CFC's financial reporting, as to both the source(s) of the monies and how they were expended. (I won't be holding my breath, though :) )
    The youth financial report was presented during Governors online meeting. You may ask the secretary for the minutes or a copy. Maybe it is even online at the cfc board.

    Comment

    • #3
      Re: More Transparency Needed

      Originally posted by Peter McKillop View Post
      Referring to the CFC's 2012 financial statements (specifically, the Statement of Revenue and Expenditure and note 3 to the statements - see link below), in fiscal 2011 and 2012 revenues from 'other programs' represented approximately half of the CFC's total revenues. Note 3 to the 2012 financial statements indicates that nearly all of these revenues from 'other programs' were derived from the CYCC. Further, the text in note 3 (see below) suggests that all of the CYCC-related revenues were used to send players to the WYCC.

      It seems unlikely to me that the CFC spent nearly $112,000 during fiscal 2012 to send players/family members to the WYCC. Given the significant portion of the CFC's revenues represented by these monies, surely more transparency is required in the CFC's financial reporting, as to both the source(s) of the monies and how they were expended. (I won't be holding my breath, though :) )


      http://chess.ca/sites/default/files/fiscals_2012.pdf
      This is simply a pass through. The "revenue" contains the contribution from the 2011 CYCC and all of the accomodation/food contribution of the families going to the WYCC. Perhaps as many as 50 people.

      Comment

      • #4
        Re: More Transparency Needed

        It would help understanding if both income and expenses explicitly named the large pass-through.

        Comment

        • #5
          Re: More Transparency Needed

          Originally posted by Fred McKim View Post
          This is simply a pass through. The "revenue" contains the contribution from the 2011 CYCC and all of the accomodation/food contribution of the families going to the WYCC. Perhaps as many as 50 people.
          Fred, I think Alan Baljeu has it right and is in basic agreement with me (feel free to correct me if I've misunderstood your comments, Alan). I believe what Alan is saying is that there is more detail, more 'granularity', required in the CFC's financial reporting in order to create more transparency. There will always be a difference of opinion on the question, how much transparency is enough (or too much)? But generally speaking, more transparency will facilitate a better understanding of the CFC's financial circumstances by the membership, which would then hopefully (!!) result in more intelligent discussion ( :o ) of the challenges facing the organization and solutions with a higher probability of working. Better transparency should also, hopefully, foster an increased awareness of accountability and stewardship by the people directly responsible for running the organization: if the membership knows where the money is coming from and how it's being spent, all sorts of good things could happen!!!

          The information already exists. How much trouble would it really be for Gerry L., or an accountant, to add a half dozen or so lines of information to the present financial statement format?
          "We hang the petty thieves and appoint the great ones to public office." - Aesop
          "Only the dead have seen the end of war." - Plato
          "If once a man indulges himself in murder, very soon he comes to think little of robbing; and from robbing he comes next to drinking and Sabbath-breaking, and from that to incivility and procrastination." - Thomas De Quincey

          Comment

          • #6
            Re: More Transparency Needed

            Originally posted by Egidijus Zeromskis View Post
            The youth financial report was presented during Governors online meeting. You may ask the secretary for the minutes or a copy. Maybe it is even online at the cfc board.
            I didn't see any mention of a youth financial report in Patrick's report at the 2012 online, outgoing governors' meeting. I'll email Lyle Craver to request that he send me a copy. Thanks.
            "We hang the petty thieves and appoint the great ones to public office." - Aesop
            "Only the dead have seen the end of war." - Plato
            "If once a man indulges himself in murder, very soon he comes to think little of robbing; and from robbing he comes next to drinking and Sabbath-breaking, and from that to incivility and procrastination." - Thomas De Quincey

            Comment

            • #7
              P.S. A Different Angle

              Originally posted by Fred McKim View Post
              This is simply a pass through. The "revenue" contains the contribution from the 2011 CYCC and all of the accomodation/food contribution of the families going to the WYCC. Perhaps as many as 50 people.
              Fred, in the CFC's fiscal 2012 financial statements, office expenses, which represented about 7% of total expenses, were broken down in detail (see below - sorry, don't know how to copy a table into Chesstalk). Why shouldn't the 'other programs' expense, which represented about 49% of total expenses, receive the same level of disclosure?

              Also, I'm curious as to why the CFC would have over $2,000 in credit card charges? Are these fees charged by your bank for issuing the CFC a commercial credit card (in which case you should commence shopping for a new bank right away), or are these interest charges for carrying an outstanding balance from month to month? If the latter, isn't that rather an expensive way for the CFC to borrow?

              What could be more fun for a retired banker than digging into some organization's financial statements!!! :D


              8. OFFICE EXPENSES 2012
              (a) Storage $ 3,538
              (b) Credit Card charges 2,104
              (c) Amortization 3,981
              (d) Professional fees 1,200
              (e) Travel 1,382
              (f) Advertising 599
              (g) Bank charges 605
              (h) Other 1,441
              TOTAL $ 14,850
              "We hang the petty thieves and appoint the great ones to public office." - Aesop
              "Only the dead have seen the end of war." - Plato
              "If once a man indulges himself in murder, very soon he comes to think little of robbing; and from robbing he comes next to drinking and Sabbath-breaking, and from that to incivility and procrastination." - Thomas De Quincey

              Comment

              • #8
                Re: P.S. A Different Angle

                Originally posted by Peter McKillop View Post
                Fred, in the CFC's fiscal 2012 financial statements, office expenses, which represented about 7% of total expenses, were broken down in detail (see below - sorry, don't know how to copy a table into Chesstalk). Why shouldn't the 'other programs' expense, which represented about 49% of total expenses, receive the same level of disclosure?
                Peter, as Fred has already said, most of the "other programs" expense is merely a flow thru of funds received from the families attending the WYCC to the WYCC organizers. So they aren't expenses in that sense.

                The governors were given a detailed report for the 2011 CYCC/WYCC revenues and expenditures at the April Governors meeting. I do agree with you and Alan that some of this detail should be included in the financial statements. I will speak with Fred and Gerry about making that happen.

                Comment

                • #9
                  Re: P.S. A Different Angle

                  Originally posted by Peter McKillop View Post
                  Also, I'm curious as to why the CFC would have over $2,000 in credit card charges? Are these fees charged by your bank for issuing the CFC a commercial credit card (in which case you should commence shopping for a new bank right away), or are these interest charges for carrying an outstanding balance from month to month? If the latter, isn't that rather an expensive way for the CFC to borrow?
                  Neither!

                  This is the fee charged us whenever our customers/members pay the CFC with their credit cards.
                  The banks pound of flesh!

                  Comment

                  • #10
                    Re: P.S. A Different Angle

                    Originally posted by Bob Gillanders View Post
                    Neither!

                    This is the fee charged us whenever our customers/members pay the CFC with their credit cards.
                    The banks pound of flesh!
                    I believe this is the so-called 'merchant fee' (perhaps that is a term I just think I recall...) but it is rumoured to be around 3% for Visa and MC - higher for AMEX (the reason many merchants either don't take Amex or discourage it in favour of the other two biggies).

                    Doesn't Paypal also take a pound of flesh for paypal purchases too? Perhaps the quoted amount also includes some of that too?
                    ...Mike Pence: the Lord of the fly.

                    Comment

                    • #11
                      Re: P.S. A Different Angle

                      Originally posted by Bob Gillanders View Post
                      Peter, as Fred has already said, most of the "other programs" expense is merely a flow thru of funds received from the families attending the WYCC to the WYCC organizers. So they aren't expenses in that sense.

                      The governors were given a detailed report for the 2011 CYCC/WYCC revenues and expenditures at the April Governors meeting. I do agree with you and Alan that some of this detail should be included in the financial statements. I will speak with Fred and Gerry about making that happen.
                      Well, if they aren't the CFC's expenses, then who's expenses are they and why has the CFC chosen to record them in the CFC financial statements? Do I infer correctly from your comments that the CFC did indeed spend nearly $112,000 for travel and accommodation to send 12 kids and some parents to the 2011 WYCC? Wow!! It appears that the Olympiads are a major bargain in comparison. Maybe the CFC should just send the kids to the Olympiads every two years and save itself a ton of money (that's 'tonne' for all you kids under age 40). :)
                      "We hang the petty thieves and appoint the great ones to public office." - Aesop
                      "Only the dead have seen the end of war." - Plato
                      "If once a man indulges himself in murder, very soon he comes to think little of robbing; and from robbing he comes next to drinking and Sabbath-breaking, and from that to incivility and procrastination." - Thomas De Quincey

                      Comment

                      • #12
                        Re: P.S. A Different Angle

                        Originally posted by Peter McKillop View Post
                        Well, if they aren't the CFC's expenses, then who's expenses are they and why has the CFC chosen to record them in the CFC financial statements? Do I infer correctly from your comments that the CFC did indeed spend nearly $112,000 for travel and accommodation to send 12 kids and some parents to the 2011 WYCC? Wow!! It appears that the Olympiads are a major bargain in comparison. Maybe the CFC should just send the kids to the Olympiads every two years and save itself a ton of money (that's 'tonne' for all you kids under age 40). :)
                        My guess (tm) would be that the CFC paid for travel and expenses with money given to the CFC by the players and parents and coaches and klingons that were going... (minus of course, the expenses etc for the player(s) that the CFC said they would pay for directly). That would be a curious way to lump all that together - curious and not useful.
                        ...Mike Pence: the Lord of the fly.

                        Comment

                        • #13
                          Re: P.S. A Different Angle

                          Originally posted by Kerry Liles View Post
                          My guess (tm) would be that the CFC paid for travel and expenses with money given to the CFC by the players and parents and coaches and klingons that were going... (minus of course, the expenses etc for the player(s) that the CFC said they would pay for directly). That would be a curious way to lump all that together - curious and not useful.
                          "Curious and not useful": a good way to characterize the CFC's lack of disclosure on this large $$ item. You seem to be implying that the CFC has a little WYCC travel agency running here. If that is the case, doesn't it represent a potential risk to the CFC's mainline business? What is the CFC doing to mitigate this risk (e.g. are they carrying appropriate insurance for potential travel-related liabilities caused by delays, cancellations or, heaven forbid, injury or death?)? How do we members determine what's happening with the national federation if they're burying large expenses under the heading of 'flow through'?
                          "We hang the petty thieves and appoint the great ones to public office." - Aesop
                          "Only the dead have seen the end of war." - Plato
                          "If once a man indulges himself in murder, very soon he comes to think little of robbing; and from robbing he comes next to drinking and Sabbath-breaking, and from that to incivility and procrastination." - Thomas De Quincey

                          Comment

                          • #14
                            2011 WYCC Statement

                            Originally posted by Peter McKillop View Post
                            Well, if they aren't the CFC's expenses, then who's expenses are they and why has the CFC chosen to record them in the CFC financial statements? Do I infer correctly from your comments that the CFC did indeed spend nearly $112,000 for travel and accommodation to send 12 kids and some parents to the 2011 WYCC? Wow!! It appears that the Olympiads are a major bargain in comparison. Maybe the CFC should just send the kids to the Olympiads every two years and save itself a ton of money (that's 'tonne' for all you kids under age 40). :)
                            Thanks to Bob Gillanders who took the time out to compile this (presumably with the help of Gerry).

                            I notice the deficit shown here is slightly smaller than that shown on the CFC Financial Statement (page 6). I think this discrepancy is due to accommodations for two of the coaches not being accounted for in the disbursements as shown in this table.

                            Not very pretty formatting on my part - but here it is:

                            Financial report on 2011 CYCC / WYCC

                            Receipts

                            Contributions from parents/players Euros Cdn $ @ 1.40
                            Hotels 36,532.71 51,145.80
                            Organizer fee 7,000.00 9,800.00
                            Entry fee (FIDE) 4,760.00 6,664.00
                            48,292.71 67,609.80 67,609.80
                            Currency adjustment 553.87

                            CYCC Basic contribution 20,000.00
                            CYCC Surplus 18,200.00
                            YCC qualifiers & donations 1,900.76
                            Additional player fees 750.00

                            109,014.43

                            Disbursements

                            Euros Cdn $
                            Payments to WYCC organizers
                            Sept 20, 2011 41,376.00 57,053.37
                            Oct 31, 2011 5,569.00 7,905.20
                            46,945.00 64,958.57 64,958.57

                            Champions - Prize fund from CYCC 12,000.00

                            Distribution of CYCC surplus
                            30% to CYCC winners 5,460.00
                            70% to WYCC participan 12,740.00
                            18,200.00 18,200.00

                            Entry fees to FIDE Euros
                            Champions (70 Euros each) x 12 840.00
                            Additional players (140 Euros each) x 28 3,920.00
                            Total paid at 1.4 Cdn 4,760.00 6,664.00

                            Head of Delegation - Andrew Giblon 1,000.00
                            Assistant HOD - Gary Gladstone 500.00
                            Coaches - Noritsyn, Peredun, Egorov $350 each 1,050.00
                            Coaches - Airline tickets 3,832.00
                            Team T shirts 604.55

                            Credit card costs 1,098.82
                            Miscellaneous fees & costs 150.12

                            CYCC
                            Tournament memberships 70.00
                            CFC rating fees 133.91
                            FIDE rating fees 183.96

                            110,445.93

                            Net deficit 1,431.50

                            Comment

                            • #15
                              Re: P.S. A Different Angle

                              Originally posted by Kerry Liles View Post
                              I believe this is the so-called 'merchant fee' (perhaps that is a term I just think I recall...) but it is rumoured to be around 3% for Visa and MC - higher for AMEX (the reason many merchants either don't take Amex or discourage it in favour of the other two biggies).

                              Doesn't Paypal also take a pound of flesh for paypal purchases too? Perhaps the quoted amount also includes some of that too?
                              Anytime we accept memberships, rating fees, equipment purchases, etc by credit card there is a cost to us involved.

                              When I was involved in a small retail business, 2-3% was normal.

                              I don't know how it works with PayPal.

                              Comment

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