BUILDING EXPANSION TOTAL RESERVE FUNDS

TOTAL ALL FUNDS (NfT ASSETS)

405,691 105,872

35,123- ..

836,965

l , 3.13 .,.40~

497,237

1 , 566,711 465,037 11101,674

58,500 · 58, 500

1,598,911

391,036 l 96, 746 587,782

2 9 186 '693

t!.

.---1979---:

313,656 62

s, oro

419,831 30,000- 356,612

a

49,505

. o.

72,472 32,100 1 , 839,176

184-, 780 103,374 18,976 831,728 1,158,85~

680,318 1,3061:)32 3g5, 748 910,284

51,000 51,000

351t, 358 270,232 624,59C

2,215,192

t;Xhib 1 t ^{{,t l l} REPORT QF BOARD COMMITTEE ON FINANCE AND PERSONNEL TO THE MEETING OF THE

INTERNATIONAL BOARD OF TRUSTEES June

19-20

and

26, 1980

Date of Committee Meeting: June 19,1980

Place of Committee Meeting:· Disneyland Hotel, Anaheim, California

Members present: Merald T. Enstad, Raymond W. Lansford,. Drew M. Petersen, M. D.

Chairman -

E.

B. "Mac" McKitrick

Staff members:

R.

P. Merridew, Robert M. Detloff, William H. Jepson, Jeffery McNary

The Committee received the report on the status of the 1980-81 budget pro- posal. The 1980-81 proposed budget showed a

$67,666

surplus position without taking into consideration any adjustments for salaries. During

the April Board meeting, the.Reserve Fund for salary adjustments was estab- lished at

$206,483,

providing a $138,817 deficit. Reductions through Board Committee activity during the April Board Meeting amounted to

$49,151,

thus the budget reflected a

$89,666

deficit. Further review indicated a line item be completely eliminated; that being 01-110-04, Charter Presentation for District Governors. This amounted to

$31,740.

Line item 04-158-05 was increased to $5,000 for Presidential gifts, pro- viding a budget deficit position of $62,926.

Since that time staff has re-evaluated the budget proposal

for the

budget

~epartments of Board Administration and Structure, B6ard Leadership and Council, and Convention. During this review, staff found an additional

$11,400

duplication of e.xpense items within the bu.dget

pre'1iously

mentioned (See

Exhibit_

A). The curren~ deficit posit-ion would be

$51,526.

Further proposed adjustments include:

A.

Utilize Ray Jeanes as one of the two men to provide field service in South America, saving $4000 in travel.

$4000 B. Reduce proposed increase of $2000. in magazine budget 08-180-01 $1000

to

$1000 (

purchase

of

articles).

C. Reduce #03-123--- leased items (Provision for equipment) $1500 by

$1500.

D. Projected savings on outside printing (several accounts must be adjusted)

E. Reduce amount allocated for education of staff by $2000.

F. Reduce amount approved for gifts for Heads of State by

$2500.

G. Establish budget for Courier Service for Finance Department.

H. Establish budget for photo brochure for Governor-elect Conference.

$10,000

$2000

$2500 ($1750) ($1050)

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I. Establish budget for Kit request labels for the President's ($1100) Package by $1100.

J. Increase budget for envelopes for the President's Package ($800) by $800 (18-161-10)

K. Increase budget for Manual for District Officers by $1000. ($1000) TOTAL ($36,226) Recommendation #1:

The Committee recommends 1980-81 budget proposal, with the afore- mentioned adjustments included; be tentatively apprnved wi.th fina_l

adopti:on to ·be. effectL1ated during the Pre-Cou·nc i.l meeting i 11 Sep- tember of

1980.

I move that recommendation 1 be adopted.

(Adopted)

During the past three months, we have reviewed current manual procedures used in the posting of General Ledger information, and recommended alter- native automated methods. During the next few months we will be adjusting the current accounting system to include reports that will improve the accuracy and timeliness of the accounting system. These reports will in- clude a) the distribution of the departmental payroll expenses b) the posting of incoming cash, supplies sales, and accounts receiveable adjust- ments c) the posting of month-end inventories d) cash demand requir- ments e) fixed assets and f) unexpired insurance.

At the present time, we are anticipating a mid-August completion schedule for implementing the new automation procedures for the General Ledger Account- ing system.

The Committee received the report as information.

Financial Investments Report U. S. Investments

Short Term Assets Management Account

Effective June 11, 1980

Name Percent of Interest Amount

CINB Time Investment Deposit 8.12 % $60,000.00

Montgomery Ward 8.12 % 74,000.00

International Harvester 8.84 % 100,000.00

Ford Motor Company 7.84 % 15,00Q.00

General Motors A C 8.11 % 172,000.00

Sears Roebuck 8.72 % 82,000.00

Ford Motor Co. (90 day paper) 10.75 % 300,000.00 (due Aug.

4)

TOTAL 803,000.00

Investments held at the Lake Shore Bank

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General Electric Credit Corp.

(due Aug. 1) General Motors A.C~

(due Aug. 1)

Foreign

Cash: Bank of Montreal Toronto Dominion

Investments:

Time Deposit Receipts due:

Toronto Dominion Bank 7/16/80 Bank of Montreal 8/15/80 Bank of Montreal 8/11/80

The Committee received this report as

10.75 % 10.75

%

TOTAL Investments

$150,000.00 150,000.00 300,000.00

Canadian dollars

$ 593.08 14258.84 TOTAL 14851. 92

12.75 % $150,000.00 13. 25 % 75,000.00 13. 00 % 25,000.00 TOTAL 250,000.00 information.

Effective May 31, 1980, 543 clubs owed Kiwanis International a total of

$69,298.32 which represents accounts receivable which are aged over 120 days. Of this total, 63 clubs had accounts receivable owed to Kiwanis International which were aged by over 120 days and in amounts greater than

$100.00. Thirteen of these clubs received a first-time notification that they were being placed upon suspended service status. Forty-six of these clubs had received a first-time notice previously and as a consequence re- ceived a second notice noting that they were now being recommended to be placed on non-meeting status. Four of the clubs have received a second notice; however, these clubs had correspondence pending at the General Office concerning an accounts receivable owed to Kiwanis International.

(See Exhibit B for listing of Clubs which have received a letter notify- ing them of possible Board action placing them on non-meeting status.) Staff believes the performance of the Finance Department is improving.

As has been noted in previous reports, many of the employees in the Fin- ance Department have been recently hired. As a consequence, much time has been devoted to the training of these new employees as to proper procedures which should be utilized in the performance of their assigned responsibilities.

Some headway has been made in effectively responding to the correspon- dence associated with our Accounts Receivable Management program. There

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continues to be a backlog of required correspondence, however we are currently within the framework of correspondence dating back approxi- mately one month. Staff fully expects this backlog of correspondence to be reduced in the upcoming months. Staff also believes with the advent of cash or credit sales only which is to be implemented in October, that such correspondence should be minimal.

Exhibit C reflects the success of the accounts receivable management program.

Staff has been requested to provide the Committee a report which re- flects the dollar amount of credit memos issued for ·pi sca.1 Year 1973.,. 79

and Flscal Year 1979-80.

Exhibit D depicts the amount of aged accounts receivable for o~erseas Kiwanis Districts. Staff has been requested to provide the same infor- mation in future reports for Kiwanis Clubs in the United States and Canada.

Staff requested the Committee to clarify which policy in the "F" section of policies is being changed by the action taken in Recommendation# 2 of the Report of the Board Committee on Finance and P ersonn.e 1 to the Jan- uary 26-30, 1980 meeting of the Board.

The statement adopted at the January 26, 1980 Board Meeting appears to be in conflict with Finance Policy 17C on page "F-14" of Policies. There- fore, staff respectfully requests. clariftcation·on t.l'i'rs~

As a matter of information, Recommendation 2 adopted at the January 26-30, 1980 Board mee.ting reads: ¹¹1n countries where monetary policies

mak.e. it difftcult to d.irectly remit dues to Kiwanis _lnternati'onal, tfieDistrict Governor shall be responsible for the collection and transmittal of these

dues to Kiwanis International. In non-districted areas, the ranking Kiwanis official, as appointed by Kiwanis International!' shall assume

this responsibility." Finance Policy l 7C reads as fo 11 ows : ¹ rwhe re a bank account cannot be opened in the riame of Kiwanis International, an indi- vidual of local choosing be designated to open an account in trust for Kiwanis International and that he be authorized under contractual agree- ment to collect all Kiwanis International financial obligations."

Recommendation# 2:

The Committee recommends that Recommendation# 2 of the Report of the Board Committee on Finance and Personnel to the January 26-30, 1980, meeting of the Board of Trustees be rp~~rred to the Laws and Polici·es ComnHttee for implementation

as

offi'cial~po1 i'cy

i.n

1 i_-eu of

current finance~Policy 17C. · ·

The Committee received the following proposals from accounting firms de- siring to obtain Kiwanis International as a client. Secretary Reg, in a memorandum to Treasurer McKitrick, has reviewed these proposals. (See Exhibit E).

- 5 -

The Committee requested staff to seek a couple of additional proposals from accounting firms with expe~ience with association type clients.

Recommendatfon

# 3:

The Comm1ttee recommends that the Committee be authorized to engage an auditing firm to provide auditing serv.ices for Kiwanis lnterna- t i ona 1.

I move that recommendation

3

be adopted.

(Adopted)

The Committee received a request for payment of

$3750.75

representing the amount due the EC & C District from. Kiwanis International as coverage for part of the expenses for their work with Clubs in the Caribbean area for the first half of

1979-80.

This was determined through the use of the formula agreed to in May,

1976.

Recommendation#

4:

The Committee recommends that payment of

$3750.75

be made to the

EC

& C District and that the District be informed that since Board pol icy has recently changed whereby all Non-districted Clubs are now attached to Districts, Kiwanis International will discontinue the practice of providing subsidies to the District after the end of Fiscal Year

1979-80.

'R, c. pcflrrli])

4 ( ~••FA_i~D_

I move that recommendation be adopted. ^{µ v} A l / \ )

fo s V() ,'tlvG iv'-'

(Adopted)

Secretary Reg commented on the need for editorial work being done on the Kiwanis History which was written by Associate Secretary Emeritus,

L.

A.

Hapgood. tt was determined that this work should be done with a view toward producing a paperback book in large quantities. Since this wi'l 1 be a supplies i'tem, ft was referred to the Property and Supplies Committee.

The cost is to be accrued and written off against the first printing of the oook.

Staff was requested ~o provide the Committee actual cost figures for ex- penses by the Board for the Toronto and Anaheim Conventions. This infor- mation should be provided to the Committee during the Fall Council meeting of

1980.

Secretary Reg indicated that he had received the appraisal for real estate tax purposes on the Kiwanis International building from McKey and Poague,

Inc. Approval was requested for the payment of

$800.00

for this necessary expense.

The Committee received the report as tnformation and approved this expen- diture.

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