P'IELD SERVICE REPRESENTATIVE
16. Circle K Matching Scholarship program and two international scholarships
17. Reprinting of the "Choicu About Drugs and Drinking"
teaching packet
18. Printing of new service materials for use by clubs 19. Key Club Matching Scholarship Program
20. ''What
If
They Cali. Me Chicken" ProgramPriorities are listed as 1 being most needed and 20 being least.
$32,910 18,587 10,000 15,125 3,500 1,050 1,000 1,029 15,000 2,205 28,652 12,800 15,600 12,800 17,708 18,~00 9,100 9,500 16,000 10,000
$250,566
EXHIBIT #24
REPORT OF BOARD COMMITTEE ON EDUCATION AND LEADERSHIP DEVELOPMENT TO THE MEETING OF THE INTERNATIONAL BOARD OF TRUSTEES
June 3O-July 4 and 9, 1987
Date of Committee Meeting:
Place of Committee Meeting:
Present: Members Chairman Staff
July 2, 1987
J. W. Marriott Hotel, Washington, D.C.
- Morton 0. Alper, C. A. Dillon, Jr., John D. Morton, Sr.
- J. Donovan Jackson - John Johnson
The Committee reviewed and discussed the Action Strategies for Operating Objective #15 for Education. It was determined that the Action Strategies through 1988-1989 could be accomplished without financial impact.
Recommendation #1:
The Committee recommends that the Action Strategies for Operating Objective #15 (Education) be approved.
I move that recommendation #1 be adopted.
(Adopted)
Finance: No impact Procedure: In Compliance EDUCATION DEPARTMENT
A. Leadership Training Program
Since March, 1987, programs have been completed in the Ohio, Pennsylvania, Indiana, Rocky Mountain, Florida, Kansas, New England, New Jersey,
Nebraska-Iowa, and Georgia districts. Participant evaluation averages have ranged from 8.8 to 9.5 on a 10 point scale. In addition to
strong positive endorsement from the leadership in the above-named districts, leaders who observed the program from the Alabama, Capital, Carolinas, Montana, and Texas-Oklahoma districts have also strongly endorsed the program.
Five additional districts will receive the program prior to August 30, 1987 (New Zealand, Philippine Luzon, Western Canada, Pacific Northwest, and Illinois-Eastern Iowa). Should an emergency arise
for any of the remaining programs, Larry Horney and Jeff DeWitt are prepared to serve as backup instructors.
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The "Have an Impact: Become a Certified Kiwanis Trainer" brochure will be available during the current International Convention. These will also be distributed to districts and individual clubs. The training of trainers for 20 districts will begin in January 1988 and be completed by the end of the fiscal year.
B. Manuals
Club officer's materials (English versions) were distributed to clubs by May 15. Lieutenant Governor's manuals were distributed to districts by June 1. These distributions were approximately two months ahead of previous years. Club presidents-elect who have called Kiwanis International Headquarters are unanimous in their positive response to the Guidebook for Club Presidents.
C. Bulletin for Kiwanis Officers
Beginning in October, the Education Department will contribute a column on leadership for each edition of the Bulletin for Kiwanis Officers.
The Committee discussed educational opportunities which could be developed for the International staff and urged that preliminary planning should be done by the International Secretary and the Department of Education.
In-house seminars could include presentations on management skills, communication style, motivation, long range planning, and budgeting. It is hoped that
this program could be solidly in place by 1990.
Respectfully submitted,
MORTON 0. ALPER C. A. DILLON, JR.
JOHN D. MORTON, SR.
J. DONOVAN JACKSON, Chairman
EXHIBIT 4/:25
ACTION STRATEGIES IN SUPPORT OF OPERATING OBJECTIVE 15
COMMUNICATIONS AND EDUCATION DIVISION EDUCATION DEPARTMENT
OPERATING OBJECTIVE 15
Provide comprehensive worldwide Kiwanis education and leadership training program.
Action Strategy
I:
The Leadership Training Program for Club Presidents-elect and their respec- tive Lieutenant Governors-elect will be offered by certified Kiwanis
trainers in 42 Kiwanis districts by 1989.
Action Strategy
II:
A revised manual for club officers will be developed and distributed in May 1987 (completed).
Action Strategy
III:
A revised manual for lieutenant governors will be developed and distributed by May 1988.
Action Strategy IV:
In November 1989, regional conferences for certified Kiwanis trainers will begin. The purpose will be to upgrade the Leadership Training Program for club piesidents-elect, to provide continuing education for trainers, and to examine quality approaches to traditional district education and training efforts.
Action Strategy V:
By 1989-90, a model program for training lieutenant governors-elect will be distributed at the Governors-elect Training Conferences.
Action Strategy VI:
By 1990, the Education Department will devise a mechanism for providing edu- cation and training consu~ting services to the districts and to other
Kiwanis International departments and divisions.
Place and Date:
EXHIBIT #26
REPORT OF THE BOARD COMMITTEE ON FINANCE
TO THE MEETING OF THE INTERNATIONAL BOARD OF TRUSTEES June 11-13, 1987, and July 1-4, 1987
International Office, June 11-13, 1987
J. W. Marriott, Washington, D.C., July 1-4, 1987
Present: Members - W. J. "Wil" Blechman, M.D., William L.
Chairman Staff
Lieber, and Gene R. Overholt - Noris A. Lusche
- Kevin W. Krepinevich, Donald R.
Collins, Robert Scroggin and Kathy Cadwell
The Committee continued the review of the Preliminary 1987/88 departmental operating budgets for the Unrestricted Fund, Magazine Fund, International Convention Fund, Circle K International and Key Club International which had begun in May.
Unrestricted Fund - Expenses
The operating fund expense department's budgets 01, 02, 03, 04, 05, 06, 07, 10, 11, 13, 16, 17, 18, 20, 21, 23, 28, 30, 31, 32, and 50 were reviewed and approved with the following exceptions:
Legal Fees (02-126-02) - $90,000 budgeted for 1987 /88 will be reviewed after the Washington, D.C. convention.
Korea Field Service Representative (05-106-05) - $18,000 budgeted for 1987/88 is contingent upon the Provisional District of Korea meeting its agreement to build a specified number of clubs by 10/1/87. If the agreement is not met, the budgeted $18,000 wi 11 be withdrawn. ·
The Committee reviewed the subsidized expenses for the Kiwanis International Foundation in Department 50. Of the $82,191 estimated for 1987/88, $38,562 represents wage benefit expense (payroll taxes, medical insurance, pension, and other employee-related insurance) which are directly related to Foundation salaries. The other subsidized items include telephone, building occupancy, printing and photocopy expense, and labor costs from other Kiwanis departments.
Kiwanis International has no control over these expenses.
The subsidized Key Club (Department 25) and Circle K (Department 24) expenses were discussed in conjunction with the Key Club and Circle K budgets. Comments will appear later in this report.
Unrestricted Fund - Income
Kiwanis International General Income, Department 90, was reviewed.
Grant Income (90-930-XX) may need modification after the 1987/88 grant requests are approved.
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Supplies Income, Department 92, was reviewed along with the Supplies Expense, Department 10. The supplies budget for 1987/88 includes an estimate of $61,000 for charging customer shipping charges to help defray expenses.
Overall unrestricted fund surplus for 1987/88 is estimated at $228,876, with items noted in this report.
Magazine Fund
discussed the Magazine Department 08 expense budget the Advertising Expense Department 09 expense budget and the Magazine and Advertising Income Department 91 The Committee
for 1987/88, for 1987 /88 for 1987/88.
The Committee noted the gap between advertising income and advertising expenses since 1983/84. Expenses have increased proportionally higher than advertising income, with a substantial increase in budgeted promotional expenses. The Committee requested that staff review advertising rates to make sure the rates are keeping pace with expenses . .
. The Magazine Fund projects a surplus of in excess of $254,000 for 1986/87 and has budgeted a surplus of $178,955 for 1987/88. The increase of $2. 00 in the subscription rate is responsible in large part for this surplus.
International Convention Fund
The Convention budgets for projected 1986/87, 1987/88, and 1988/89 were reviewed by the Committee with emphasis on 1986/87 and 1987/88.
The Convention Department staff presented numerous changes to the Committee for 1986/87 and 1987 /88. The Convention Department staff is projecting a deficit of $36,879 for the Washington, D.C. Convention, which is a result of increased expenses and lower than expected revenues. If ·registrations increase, the current year deficit will be less.
The Convention Department requested that ways of enhancing convention income be explored for 1987 /88 as an alternative to additional cost reductions.
The Convention budget for 1987/88 was deferred until the October 1987 meeting pending additional information from staff.
Sponsored Youth - Circle K International and Key Club International Discussion was given to the 1987 /88 budgets, subsidized and non-subsidized, for Circle K International and Key Club International.
The Committee noted that the subsidy to the Sponsored Youth groups had been impacted in 1986/87 by the charges from other departments
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( interdepartmental charges) as required by the new accounting procedures approved in April, 1986. Prior to 10/1/86, these costs had been absorbed by Kiwanis departments or only shown in part as subsidies.
The budgets for Circle K International and Key Club International for 1987 /88 were reviewed per the following procedures for Sponsored Youth:
885 - Finances
885.1 - Subsidies
Kiwanis International shall subsidize the following costs for sponsored youth organizations, which shall be included as income and expense on the sponsored youth organization's financial statements: (4/25-29/86) a. The salaries of the employees of
youth organization departments and personnel employee benefit costs.
the sponsored their related (4/25-29/86) b. International Office building occupancy expenses, including furniture and equipment ( sponsored youth departments). (4/25-29/86)
c. Accounting costs to maintain financial records, excluding the audit costs. (4/25-29/86)
d. Any amounts (4/25-29/86) 885.3 - Other Costs
approved under Section 885.3.
All other costs incurred by or on behalf of the operation of a sponsored youth organization shall be its responsibility, unless such costs are assumed by specific action of the Kiwanis International Board. (4/25-29/86) 886 - Fund Balances (Reserves)
886.1 - Purpose
The sponsored youth organizations shall be permitted to maintain fund balances (reserves) for the purpose of sustaining operations in fµture years. Surplus cash shall be invested at the direction of the Kiwanis International Board. (4/25-29/86)
886.2 - Permitted Fund Balances
The maximum fund balances permitted for a sponsored youth organization shall be 50% of the annual dues of its members or $50,000, whichever is greater. Any additional fund balances shall be used to reduce the sponsored youth organization's dues and/or convention registration fees. (4/25-29/86)
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Circle K International
The Circle K non-subsidized budget for 1987/88, as modified is:
Circle K Income (Department 94) Circle K Expenses (Department 14)
= $236,255
= 233,955 Circle K Non-subsidized 1987/88 Budgeted Surplus=$ 2.300
(The 1987/88 Circle K Convention Budget will be submitted at a later date and not included above.)
Recommendation #1:
The Finance Committee recommends that the subsidy to Circle K for 1987 /88 be as shown on the attached Department 24 printout (Exhibit A). The total amount of the budgeted subsidy for 1987/88 is $192,423 and includes pursuant to Procedures 885.1 and 885.3:
Pursuant to Procedure 885.1 (a):
Direct Salary Costs
Pursuant to Procedure 885.1 (b):
Building Occupancy
Pursuant to Procedure 885.1 (c):
Accounting Costs (excluding au<lit)
Pursuant to Procedure 885.1 (d) and 885.3:
Inter.departmental Charges from Kiwanis Int.
[except for Finance which is covered under 885.l(c)]
Editorial Services from Magazine Additional Subsidy
Total Sudsidy Budgeted for Circle K International
I move that Recommendation #1 be adopted.
Finance: Included in 1987/88 Budget Procedure: In Compliance
Key Club International
$ 71,347
$ 11,231
$ 25,355
$ 39,082
18,028 27,380
$'84,490
$192,423
(Adopted)
The Committee discussed the 1986/87 projected surplus of Key Club International. Because the reserves for Key Club International exceed the amount allowed by Procedure 886 - Fund Balances (Reserves), the Committee feels that the 1986/87 budget should be amended to decrease this year's subsidy to Key Club International to an amount that would
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adjust the Key Club surplus, excluding Convention, to -0- (zero).
The audited financial statement would be the final determination of the amount of the actual subsidy, which would include amounts covered under Procedure 885.1 (d) - Subsidies.
The 1987/88 Key Club budget for Departments 15, 25, and 95 (subsidized and non-subsidized) was deferred until the October meeting.
Recommendation #2:
The Committee recommends that the 1986/87 budgets for Kiwanis International and Key Club International be amended to authorize subsidies to an amount in accordance with Board Procedures 885.l(a),.(b) and (c) and that a .subsidy under 885.l(d) be made only if necessary to eliminate any operating deficit.
I move that Recommendation #2 be adopted.
(Adopted) Finance: Increase unrestricted fund balances for 1986/87
by approximately $67,000.
Procedure: In Compliance 1987/88 Capital Budget
Discussion of the 1987/88 Capital Budget, which includes the requests for capital expenditures, was deferred unti 1 the October 1987 Board Meeting.
Special Committee Re: Kiwanis International/Kiwanis International-Europe Finances
The Committee discussed the problem of the financial relationship between Kiwanis International and Kiwanis International-Europe, especi- ally the operations of the Zurich office.
Recommendation #3:
The Committee recommends that the Board authorize a special committee meeting as requested by President Frank DiNoto to be held in Zurich, Switzerland, on September 10, 11, 12, 1987, to review the financial relationship between Kiwanis International and Kiwanis International-Europe.
I move that Recommendation #3 be adopted.
Finance: The cost for travel and lodging for Treasurer Overholt is estimated at expected to be available in account expenses for this special m~eting.
Procedure: In compliance
(Adopted) President DiNoto and
$2,000. Funds are number 05-110-07 for
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Internal Auditor
The Committee discussed this subject which had been on the agenda originally in May, 1987. The President and the International Secretary were invited to comment on· the feasibility of establishing an internal audit function on at least a part-time basis at the earliest possible time. Staff was requested to prepare a list of duties for considera- tion at the October 1987 Board Meeting. Input and suggestions should be sought from our auditors on these duties.
Eastern Canada and Caribbean (EC&G) District-Delinquent Clubs
Trustee William Lieber read a letter from EC&C Governor Glen Bagnell requesting the Board of Kiwanis International to forgive certain past due obligations. The Committee spoke favorably about the efforts being made and wishes to encourage the EC&C Board to submit an approved plan detailing the specific proposal, including a provision for keeping obligations current in the future.
Selection of an Audit Firm
Staff presented a report on the desirability of selecting a new audit firm. It was felt that continuing with Wolf and Company was both too costly and inconvenient due to their Chicago location. A compari- son of two Indianapolis firms to Wolf and Company was provided to the Committee (Exhibit B). The firms of George S. Olive & Company and Ernst & Whinney were discussed in detail.
Recommendation #4
The Committee recommends appointed to perform September 30, 1987.
that the
the firm of audit for
Ernst the
I move that Recommendation #4 be adopted.
& Whinney be year ending
(Adopted) Finance: Reduce 1987/88 Budgeted Audit Expense (Kiwanis International, Key Club International, Circle K International) from $36,850 to $21,600. (Excludes $2,400 for Foundation audit.)
Procedure: In compliance Umbrella Insurance Proposal
Staff requested that the Committee reconsider a proposal made at the May Board Meeting to purchase a $1 million umbrella policy for our basic comprehensive and general liability coverage. A schedule of cos~ts (Exhibit C) was reviewed and discussed. The cost for such a policy is $150,000 or 55 cents per member, based upon 275,300 members. A letter from Ed Hecht of Donchin & Hecht Company has been received indicating that due to a fatality occurring recently in New Jersey, we may have a substantial exposure beyond our present
$1 million policy limits. It was pointed out by staff that the projected cost for this coverage is $4.12 not including the administra- tive expense of $35,000, which adds another 13 cents for a total
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of $4. 25. The 55 cent cost for an umbrella policy would bring the total to ·$4. 80 which is the amount presently billed to members.
Recommendation #5:
The Committee recommends the purchase of a policy for comprehensive general liability exceed $150,000, subject to approval by the should the cost exceed $150,000 ..
I move that Recommendation #5 be adopted.
Finance: Included in Preliminary 1987/88 Budget Procedure: None
Key Club/Circle K Investments
$1 million umbrella at a cost not to Executive Committee
(Adopted)
Discussion was given to the status of Key Club and Circle ·K investments which are currently held in a money market fund, Liquid Green.
Recommendation #6:
The Committee recommends that Circle K and Key Club investments be moved into the portfolio with Bank One in order to gain a higher effective yield. Key Club investment guidelines will be modified to conform with Kiwanis International investment guidelines on a proportional basis, with 25% to be maintained in short-term investments for liquidity. Circle K investments are to be maintained in a money market fund because of the greater need for liquidity.
Finance:
Policy:
I move that Recommendation #6 be adopted.
None
Revision to Procedure on Administration
812.2 Refer
Competitive Bids for Goods and Services
(Adopted)
to Board Committee
Staff will present a· report to the Committee in October concerning the type and number of transactions which would necessitate competitive bids if the limits were $5,000 and $10,000.
Processing Fee and Charter Fee
The Committee discussed the possible increase of the processing fee and charter fee. Staff will prepare a report analyzing costs of processing a new member and present a report to the Finance and Member Services Committees at the October meeting.
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Request to Overspend Line Item from Management Information Services The Committee received a request from
number 07-178-04, Software License Fees, costs to install a Nixdorf software update.
staff by
to overspend account
$2,900 for additional
Recommendation #7:
The Committee recommends that an overexpenditure of $2,900 be authorized in account number 07-178-04.
I move that Recommendation #7 be adoptedo
(Adopted) Finance: Because savings will be available in account number 07-105-90,
the financial impact will be -0-.
Procedure: In compliance.
Board Expense Report Deductions
Staff presented a clarification of a procedure for Board of Trustees Expense Report Deductions for "unofficial meal functions" during Board meetings. The guidelines are attached as Exhibit D. Staff was requested to check with the President prior to completion of the Board schedule to see which meal functions will be designated
"official" and that this be noted on future Board schedules.
Respectfully submitted,
W. J. "WIL" BLECHMAN, M.D.
WILLIAM L. LIEBER GENER. OVERHOLT
NORIS A. LUSCHE, Chairman
EXHIBIT A Exhibit A of the Report of the Finance Committee, "Department 24,
Circle K International, Budget Spreadsheet," is now Exhibit #27 of the June 30-July 4 and July 9, 1987 Minutes.