1. The provisions of the Constitution and Bylaws of Kiwanis International con- cerning finances are:
Constitution
Article XI, Section 2 Bylaws
Article XIV, Section 2 Article XVIII, Sections 1-7 2. Accounting System (6-25-82)
A classification of departments and accounts shall be maintained and all revenues and disbursement items shall be distributed according to their proper classification.
The actual departmental break-down and chart of accounts shall be as estab- lished by the International Secretary in accordance with generally accepted accounting principles and practices.
Statements of financial conditions shall be provided to the Board Committee on Finance and each Board Committee covering the operations of their related departments. These reports shall be submitted on ·a monthly basis.
3. Petty Cash Account (6-25-82)
There shall be a petty cash account established, under the direction of the International Secretary or his designate, in an amount sufficient to be used for small miscellaneous expenditures. This account shall be replenished on an imprest basis.
4. Required Deposits (6-25-82)
Where requireq,deposits shall be made to insure that necessary services will be provided to Kiwanis International. (This would include, but not be
limited to, utilities and postal deposits.)
5. Auditing (6-25-82)
Certified Public Accountants shall be employed to make an annual audit as required by Article Xi.~, Section 1, of the International Bylaws.
The statement prepared by the auditors shall be in a fonn consistent with generally accepted accounting principles and shall be forwarded to clubs as soon as possible after the end of the administrative year. (On ~r before the first day of February in each year as per Article XIX, Section 2, of the International Bylaws)
6. Banking Arrangements (6-25-82)
a. Bank Accounts other than Pension Trust Accounts
The International Secretary is authorized to establish the necessary banking arrangements to insure that Kiwanis can adequately conduct
business in the United States, Canada, and all necessary foreign countries.
Ahy of the following are authorized signatures for all accounts except for the Pension Trust Account: President, Treasurer, Secretary, Director of Finance, or Assistant Secretary Administration.
b. Bank Accounts for Pension Trust Accounts
The International Secretary is authorized to establish the necessary banking relationships to insure the proper depositing of the Pension Trust Funds.
The following are authorized signatures for all accounts of the Pension Trust Funds: President, Treasurer, Secretary, or Assistant Secretary Administration.
7. Not-Meeting Clubs
A club shall be listed as "not-meeting" upon the recommendation of the Gover- nor of the district. In order that the membership records of Kiwanis Inter- national may indicate the actual membership of the organization and the balance sheet may indicate only actual assets in Accounts Receivable, the Secretary shall authorize the elimination of all membership of "not-meeting" clubs from the active membership lists. If the Board revokes the charter of a club, it may upon the recommendation of the Finance Cormnittee, charge off any uncollec- tible accounts of such club.
8. Insurance (6-25-82)
a. Comprehensive Fidelity Policy
An over-all fidelity policy amounting to $200,000.00 shall be carried covering each employee. All employees shall be included in the coverage.
b. Travel Accident Policy for Board
The Secretary shall contract for travel accident insurance policy for the International Board of Trustees and other selected Kiwanis employees, who through the nature of their position, are required to travel extensively.
c. Comprehensive Liability Insurance
The words "actual cost" in Article XX-Liability Insurance-of the Bylaws of Kiwanis·International shall be interpreted as including cost of premium, safety education, and administrative expense to Kiwanis International, and further, any funds in excess of actual cost as herein defined shall be re- served and allocated solely to the reduction of the premium in the succeed- ing year.
d. Property Insurance
The Secretary shall contract for necessary property insurance to secure·
the property and other assets of Kiwanis International.
e. Officers and Directors Liability Insurance
Officers and directors liability insurance shall be purchased for the protection of the Board of Trustees of Kiwanis International.
g. Investment of Funds (6-25-82)
The Secretary and his designate shall have continuing authorization to invest funds not currently required for operations. All instruments evidencing this investment shall be secured in a safe place.
Exhibit 1111 REPORT OF THE COMMITTEE OF PAST PRESIDENTS
TO THE MEETING OF THE INTERNATIONAL BOARD OF TRUSTEES July 1, 1982
Date of Committee Meeting: June 25, 1982
Place of Committee Meeting: Minneapolis, Minnesota
Present: Members - Wes H. Bartlett, Reed C. Culp, Roy W. Davis,
William M. Eagles, M.D., James M. Moler, Ted R. Osborn, Stanley E. Schneider, Mark A. Smith, Jr., Hilmar L.
'"Bill" Solberg, Charles A. Swain, J. O. Tally, Jr., Merle H. Tucker, Albert J. Tully, Robert F. Weber,
and I. R. Witthuhn, and 0. E. Peterson (Honorary Member).
Chairman - Maurice Gladman Absent
Staff -
Donald T. Forsythe, Edward C. Keefe, Fred G. McAlister, Q.C., and Walter J. L. Ray
Percy H. Shue
The Chairman called the meeting to order and gave the invocation. Absentees were noted, and the Committee stood for a moment of silence in respect to the memory of Past President Donald B. Rice.
"Brief" for Past Presidents
Certain of the materials which were provided to Past Presidents several years ago as background or briefing materials are now out of date. The Committee requests that the staff bring these up to date and reissue them prior to September 1.
Report of the Sub-Committee on Finance
Past President Roy Davis reported on the meeting of the Board Committee on Finance which he and Past President Stan Schneider had attended. At that time he was briefed on the financial situation, including a forecast of more than $800,000 cash shortfall in late summer and the need for a one-million-dollar line of credit to accommodate this. He has since
learned that this line of credit has been extended by the Merchants National Bank in Indianapolis. The shortfall was the primary reason the Board
decided there was need for a dues increase.
Proposed Amendments
The Chairman determined that there was agreement among members of the Committee that, on the basis of conversations and communications they had received from Kiwanians in their respective districts, Proposed
-2-
Amendment No. 1, which would increase Kiwanis International dues to $15, would not pass.
Finance Director Bill Berry was invited into the meeting and responded to questions related to the million-dollar line of credit, the costs of the new building in Indianapolis, delinquent club accounts, inventory
increases, impounded funds in foreign bank accounts, expenditures charged to the International extension dollar, and the cost of the 1981 fall Councile Visit of the International President
President Mac McKitrick visited the meeting, and the subject of the dues increase and the overall financial condition of Kiwanis Internati·onal continued to be discussed.
In particular, the Committee and President Mac reviewed possible strategies on the floor of the floor of the House of Delegates on Tuesday morning and the Committee suggested that the Board seriously consider having an alternately-worded proposed amendment available at the time of voting.
Joint Luncheon with the Board
At the luncheon and meeting with the Board, the Chairman gave a brief summary of discussions the Committee had had during the morning and communicated to the Board that, in the judgment of the Committee, it was unlikely that Proposed Amendment No. 1 would be approved by a two-thirds majority.
In the ensuing discussion, a number of viewpoints were expressed by both Board members and members of the Committee, and Parliamentarian Don Dubail responded to inquiries about rulings and procedures.
Kiwanis International-Europe
President Mac rejoined the Committee in the afternoon and brought the Committee up to date on relationships between Kiwanis International and the leadership of Kiwanis International-Europe. Several times he emphasized the point that Kiwanis International-Europe must accept an elimination of the subsidy from Kiwanis International, that it is being gradually eliminated, and that he anticipates it will be eliminated by October 1, 1983.
With respect to the continuation of the KI-E Federation, the KI-E Convention recently held voted to postpone the decision on this matter until its
1983 Convention. When that decision lS made, al1 International dues will come to Kiwanis International and the administrative costs of the Federation will come from the dues of European members paid directly to the Federation
for that purpose.
Budget Control
President Mac indicated to the Committee that the Board is in the process of going back to zero-based budgeting and control of line item figures.
-3- Proposed Amendments 2 through 15
President Mac reviewed with the Committee the Board positions on the various proposed amendments.
Reimbursement of Expenses of Past Presidents to Minneapolis
President Mac further indicated that, although there had been Board discussions on a proposal that expenses of wives of past Presidents not be reimbursed for this Convention, it had taken no definitive action on the matter and that such expenses would be reimbursed to Past Presidents.
The Vienna Convention
Steve Martin, representing ITS, appeared before the Committee to answer questions they might have about the plans for the Vienna Convention,
especially as related to travel and housing for Past Presidents. Steve in- dicated that Convention Manager Ray Jeanes has blocked 120 rooms in
Vienna for assignment and that the VIP registratiori forms will go to the Board and Past Presidents this summer, probably about July 15.
Visit of the President-elect
President-elect Johnny Roberts also visited the Committee and indicated that the proposed 1982-83 budget adopted by the Board would require $2 of the proposed $5 increase. This would be need for inflation, for upgrading of the officer training program, for sending Board counselors to districts other than their own, and for long-range planning meetings of a Committee.he has appointed for that purpose to make recommendations to the Board Exceutive Committee.
He also indicated that he and Kiwanis International-Europe President-
designate Sigurdsson had agreed to appoint a six-member committee to develop bylaws for KI-E which would provide for the direct payment of all KI dues to Kiwanis International with the understanding that KI would provide services to clubs and KI-E will provide for the administrative costs of the Federation.
President-elect Johnny also stressed his plans for growth but emphasized that we are going to stop building new Kiwanis clubs where they are not needed and that we will no longer be "playing the numbers game" by trying to add members without to the _club's need for them ~r without r~spect to their standing in their businesses or professions.
Visit of the Secretary
The Committee also welcomed Secretary Bill Kleindorfer and Assistant Secretary Les Atwood to the meeting. Secretary Bill reviewed some of the decisions he has made with respect to a new organization plan to be instituted in
Indianapolis. He said that at present no consideration is being given to rental of any part of the new building in Indianapolis.
Appreciation to the Board
The Committee expresses to the Board its thanks for the arrangements made here in Minneapolis for the Past Presidents and their wives and for all of the courtesies extend to us as a Committee and as individuals during our stay with you at this great Convention of 1982.