2012 Financials

[Guest Andys@coffs]

People

 

Once again we find ourselves communicating among each other where and when the board should have already done so.

 

Attached is the financial report that will be included in an upcoming magazine (late among other things)

 

I would ask that people take careful note of the dates of the various signature blocks, Note the date of the past AGM and ask how it is that we still dont officially have this information?

 

I would also suggest that people read the first paragraph on page 1 carefully....Im not sure that the 8 pages are "Techincal in content" and even though Shags took the treasurer to task at the AGM over this specific issue, it would seem that water of a ducks back comes to mind!( or at least miles over his head would possibly be more accurate)

 

Im sorry the quality is poor, but hey poor is better than silence!

 

Andy

 

audit report 2012.pdf

 

audit report 2012.pdf

 

audit report 2012.pdf

[fly_tornado]

I see that the RAA took in $1.343M in Member subscriptions. That works out to 7300 fully paid pilots. That's well short of the 13,000 members we are supposed to have. Even the income from aircraft registration $421k is low for the numbers we are supposed to have, 3200 if you had no new registrations.

 

 

[Guest Andys@coffs]

I see that the RAA took in $1.343M in Member subscriptions. That works out to 7300 fully paid pilots. That's well short of the 13,000 members we are supposed to have. Even the income from aircraft registration $421k is low for the numbers we are supposed to have, 3200 if you had no new registrations.

Yeah but im pretty sure that the member liability Insurance line is also part of your subscription costs which assists with the delta but doesnt explain it entirely however it is not a one fee fits all scenario ( http://www.raa.asn.au/wp-content/uploads/2012/02/Schedule-of-fees-and-charges.pdf )

 

same with fleet, different charges for single and double seat aircraft (further down same PDF as linked above)

 

Andy

 

 

[408059]

An audit certificate would have been nice.

 

 

[fly_tornado]

13,000 pilots would generate $2.405M without the extra fees and charges the FIs incur.

 

 

[Guest Andys@coffs]

13,000 pilots would generate $2.405M without the extra fees and charges the FIs incur.

I may be wrong but seem to recall at the AGM that we were told there are 13,000 members and about 11,500 flying members..... which still doesnt address the delta......Sorry FT that's it for me......feel free to email Middo and ask him......post back if you get a reply

 

Andy

 

 

[fly_tornado]

I was just pointing out that the figures are out, 11500 members is at least $2.127M.

 

 

[Guest Andys@coffs]

FT what you say is true, it doesnt make sense....at all....

 

We were told that approx 11500 were flying members and that there were pressumably then approx 1700 non flying members to give us circa 13200 members in total.

 

The report covers a period of 12 months in history and is not a point in time report. Therefore at the end of the 12 months there might well be prepayments on the books representing months in the future which members will have paid for but not yet had advantage of and therefore pressumably dont get accounted for as revenue except month by month as they occur. Given that the period of renewal is 12 months and the period of the report is 12 months a simplistic approach would see the opening pre-payments and the closing prepayments roughly equivalent and can therefore be roughly ignored

 

The list of fees I linked to before are GST inc prices so that needs to be removed. so if we do that a flying member will pay 168.18 and a non flying member 90.90.

 

Using teh numbers above that represents $155k for non flying members and $1934k for flying members.

 

Note 2 identifies that we have $1647k as revenue. That suggests a shortfall reported of $442k if we were to assume(wrongly) that the membership numbers above were at that level and static through the year.

 

Now $442k as a percentage of $2089 (fly+non fly) is approx 21% I doubt that membership numbers varied that much as an average across the year, so something doesnt add up at all.

 

What are we missing?

 

Andy

 

 

[fly_tornado]

On the expenses side, the insurance premium went up over $60K.

 

And to add insult to injury board expenses nearly doubled whilst they where organizing CASA audits...

 

 

[cooperplace]

PeopleOnce again we find ourselves communicating among each other where and when the board should have already done so.

 

Attached is the financial report that will be included in an upcoming magazine (late among other things)

 

I would ask that people take careful note of the dates of the various signature blocks, Note the date of the past AGM and ask how it is that we still dont officially have this information?

 

I would also suggest that people read the first paragraph on page 1 carefully....Im not sure that the 8 pages are "Techincal in content" and even though Shags took the treasurer to task at the AGM over this specific issue, it would seem that water of a ducks back comes to mind!( or at least miles over his head would possibly be more accurate)

 

Im sorry the quality is poor, but hey poor is better than silence!

 

Andy

that doesn't look like an audit report to me. Audit reports in my experience give the name and qualifications of the auditor, who is an accounting professional independent of the management of the body being audited, the date on which the audit was done, a description of the accounts being audited, a summary written by the auditor, and they show the auditor's signature. No doubt someone will correct me if I'm wrong, but I believe these to be essential features of an audit report, and not "technical explanations".

 

 

[Guest Andys@coffs]

Indeed, and it would appear that you arent the only one to think this based on the new "News" on the RAA site.

 

See here http://www.raa.asn.au/news/ for the full and actual Auditors report!!

 

Andy

 

 

[408059]

Just had a look at the full set of accounts on the RAA site. I take comfort that Ged Stenhouse from RSM Bird Cameron has signed the accounts off. Having had to deal with him on many occasions I found him tough. The current ratio is good (so they can pay debts when and as they fall due), receivables are low, equity is good should some of those risks mentioned in other threads come to pass. Only two concerns, those issues raised above and I note that the market for office space in Canberra soft so the building could do with a revaluation.

 

Cheers

 

Steve

 

 

[Guest Andys@coffs]

So....what do people think about the dates???

 

 

[Captain]

Andys@coffs' date=' post: 259293, member: 94[/email']]I would ask that people take careful note of the dates of the various signature blocks, Note the date of the past AGM and ask how it is that we still dont officially have this information?

Thanks for posting that Andy,

 

If this was all, indeed, signed by Steve & Eugene on 30th August 2012, why wasn't all of this available before and at the AGM, including the notes and Auditor's comments?

 

That looks a strange set of circumstances to me.

 

And where has this been signed off by RSM Bird Cameron? I assume that has been left out to save costs Edit .... Ah, there it is on the website and GS has signed that on 30.08.12 as well.

 

SO I ASK AGAIN .....WHY WASN'T THIS ALL PROVIDED AHEAD OF THE AGM AND WHY HAS IT TAKEN ALMOST 3 MONTHS TO MAKE IT AVAILABLE TO THE MEMBERSHIP?

 

IF IT CAN GO UP ON THE WEBSITE NOW, WHY NOT BACK ON SEPT 1ST?

 

And why haven't Reid and Tizzard signed the front page? Edit - it is signed by SR & ER on the website version.

 

I also note that Runciman's name has been spelt incorrectly twice in the text and corrected once by SR when he signed it. Geeezzzz Louisssse, how hard can it be for our wizzz-banggg leaders to get that right?

 

Regards Geoff

 

PS - So Andy puts out the report at 11.41 am today and low and behold, Reid sticks it on the RAA website some time this arvo. What a coincidence. Who says that this forum doesn't have power, and our Big ugly Brother isn't watching us? At least we now know how to get some action from our esteemed Treasurer.

 

 

[fly_tornado]

phht volunteers...

 

 

[Admin]

The financials look very good to me and when I apply a lot of the financial ratio analysis to them, they are good...however, I would very much argue against what seems to be the "need" for profit. I don't mean make a loss at all but with the total reserves almost equalling the total annual income, I would expect that some of that profit should be getting spent on providing "service" to the members. By service I mean providing maintenance courses, some more investment in marketing as that can come back two fold in income, some assistance to getting new aircraft designs manufactured with some engineering grants, establishing a free fully equipped workshop where RAAus members can take their aircraft and perform maintenance under the watchful eyes of a Level 2 etc etc etc.

 

An organisation will always be rewarded if it invests in their customers.

 

 

[408059]

Thanks for posting that Andy,If this was all, indeed, signed by Steve & Eugene on 30th August 2012, why wasn't all of this available before and at the AGM, including the notes and Auditor's comments?

 

That looks a strange set of circumstances to me.

 

And where has this been signed off by RSM Bird Cameron? I assume that has been left out to save costs Edit .... Ah, there it is on the website and GS has signed that on 30.08.12 as well.

 

SO I ASK AGAIN .....WHY WASN'T THIS ALL PROVIDED AHEAD OF THE AGM AND WHY HAS IT TAKEN ALMOST 3 MONTHS TO MAKE IT AVAILABLE.

 

And why haven't Reid and Tizzard signed the front page?

 

I also note that Runciman's name has been spelt incorrectly twice in the text and corrected once by SR when he signed it. Geeezzzz Louisssse, how hard can it be for our wizzz-banggg leaders to get that right?

 

Regards Geoff

Geoff

 

There's a link to the accounts in one of Andy's post with the audit certificate.

 

Why didn't the accounts go to the AGM. Could only guess but it seems that the Treasurer has stuffed up.

 

Personally, given the level of interest and emotion around I would have also taken the Auditor along to the AGM with me if I was the Treasurer. Blow the cost, the membership needs independent verification and comfort on the state of the finances. But then again, easy for me to say.

 

Steve

 

 

[Captain]

GeoffThere's a link to the accounts in one of Andy's post with the audit certificate.

 

Why didn't the accounts go to the AGM. Could only guess but it seems that the Treasurer has stuffed up.

 

Personally, given the level of interest and emotion around I would have also taken the Auditor along to the AGM with me if I was the Treasurer. Blow the cost, the membership needs independent verification and comfort on the state of the finances. But then again, easy for me to say.

 

Steve

I agree Steve.

 

And if you are correct and "the Treasurer has stuffed up", then that is another stuff-up that this Executive (& Board) have lorded over during 2012.

 

I can see the cries now .................. you malcontents should leave them alone, they are only volunteers, don't ask any more questions, you are just sh#tstirrers, they are trying as hard as they can, don't be too hard on them, they are hard workers, this was just a (nother) mistake, stop winging as all the members want to do is fly, the members don't really care, circle the wagons and lets have more board solidarity, after all it was only the accounts.

 

Regards Geoff

 

 

[Allegro2000]

All,

 

I agree with Andy and Ian, the figures look reasonably normal. Whilst we can argue that "this' should have been done or "that" may have been a better option the flow of the two years is quite reasonable. This is not disimilar to our own Company s' books. Overall the situation is healthy.

 

Allegro 2000

 

 

[408059]

The financials look very good to me and when I apply a lot of the financial ratio analysis to them, they are good...however, I would very much argue against what seems to be the "need" for profit. I don't mean make a loss at all but with the total reserves almost equalling the total annual income, I would expect that some of that profit should be getting spent on providing "service" to the members. By service I mean providing maintenance courses, some more investment in marketing as that can come back two fold in income, some assistance to getting new aircraft designs manufactured with some engineering grants, establishing a free fully equipped workshop where RAAus members can take their aircraft and perform maintenance under the watchful eyes of a Level 2 etc etc etc.An organisation will always be rewarded if it invests in their customers.

Ian

 

From a policy perspective I cannot fault you.

 

Putting my accountants hat on, having worked for a number of major charities and not-for-profit professional member based peak organisations, I always liked to see operating expenditure covered by equity. I didn't always get there but it was an aim. In the not-for-profit industry passion rules and decisions are not often based on a business case or even common sense at times. You need a bit extra in case the Board get a rush of blood. Add to this the risk of an event going bad (eg Natfly) and you want something put away. Also, keep in the back of your mind that equity in the RAA largely comprises fixed assets. To use the reserves etc the RAA will have to fire sale their assets, which will discount the revenue. Further, going back to my earlier email, the office accommodation market in Canberra is soft so the building is probably overvalued.

 

I could go on about where the focus of the board is at the moment but clearly it is crisis management so it is fair to assume there will be no rush of blood. The Board will probably need to throw some money at getting the problems fixed. Next year's accounts will be interesting. I would not be surprised by a deficit result.

 

Food for thought.

 

Cheers

 

Steve

 

 

[turboplanner]

Try the sequence 2008, 2009, 2010,2011,2012 Steve

 

 

[AlfaRomeo]

Steve, you might want to have another look at RAAus assets. There is more cash than you can poke a stick at $1.8 million. You could be right about the building being over valued but the Board and the Auditors have just signed off to say it is OK at $1 million. Natfly costs RAAus about $30,000 but gets Revenue of more than that. It is not any sort of a risk to RAAus reserves. The big risk to Reserves is under insurance of stuff ups by the Board and Staff.

 

The target of 10% surplus each year is the wrong target. The right target is more like your idea of a % of total turnover for one year. Current net assets are virtually 100% of annual turnover and in my view is over the top! It means that fees have been too high for years.

 

Edit : added a bit

 

 

[Admin]

Steve, we have around 1.8m in retained earnings + profit of around 220k + property at around 1m. So now we have around $2m in retained earnings + $1m property and an annual income of around $2.5m...so I just personally think that we are healthy, we are covered for a very bad year so the concept of "We must make profit" could be relaxed a bit now with investing say $100k or $150k back to the membership OR even better would be to invest in some good marketing which, as I said, would increase our income and round it goes...invest say $20-30k in a National Recreational Aviation Week, if that doesn't get 162 new members from around Australia then I will bare my bum in Bourke Street...so 162 x $185 = $30k payback in just the first year (costs aside) which means every year they remain members is pure bonus income (and extra cost recovery)...not to mention the help it would give to all the struggling schools out there...and the flow on to extra aircraft sold etc etc etc...all for such a small investment when we are making $220k profit with ample cash and property reserves.

 

That's just my "business" thinking

 

When I was doing my MBA, a case study we had was on Coca-Cola. Basically when they really got going is when the "Marketing" manager said if you double my budget, I will triple your profits...they did...and he did

 

 

[sain]

Is it just me, or is there a discrepency between the stated revenue and the cash flow from operating activities?

 

I'm not an accountant, but it seems to me the cash flow receipts shouldn't exceed the revenue figure, because you know, thats revenue.

 

Any accountants care to educate me?

 

 

[Guest Andys@coffs]

Steve, we have around 1.8m in retained earnings + profit of around 220k + property at around 1m. So now we have around $2m in retained earnings + $1m property and an annual income of around $2.5m...so I just personally think that we are healthy, we are covered for a very bad year so the concept of "We must make profit" could be relaxed a bit now with investing say $100k or $150k back to the membership OR even better would be to invest in some good marketing which, as I said, would increase our income and round it goes...invest say $20-30k in a National Recreational Aviation Week, if that doesn't get 162 new members from around Australia then I will bare my bum in Bourke Street...so 162 x $185 = $30k payback in just the first year (costs aside) which means every year they remain members is pure bonus income (and extra cost recovery)...not to mention the help it would give to all the struggling schools out there...and the flow on to extra aircraft sold etc etc etc...all for such a small investment when we are making $220k profit with ample cash and property reserves.That's just my "business" thinking

 

When I was doing my MBA, a case study we had was on Coca-Cola. Basically when they really got going is when the "Marketing" manager said if you double my budget, I will triple your profits...they did...and he did

The amounts of current assets is of an interesting size but perhaps more interesting is to ask the question "so what is our organisations medium to long term strategy"? after all, all things being equal (and they definately arent!) to continue adding 10% profit to reserves each year without a set of published and agreed strategies is the medical equivalent of ensuring the blood bank is full but not knowing what ior how a transfussion is performed nor if we will ever need one.

 

Although Im sure if we were to ask the various litigants legal teams as to what we should be doing thety would be exstatic if we keep on adding to the prize reserves.

 

Andy

 

P.S the question what are our strategic aims was asked at the AGM....The question was never satisfactorily answered, initially the answer was we dont have any!!!! ......but that was then corrected to there is a list of action items....but no details provided.......Very Telling in my view! I dont recall that moment of glory being added to the AGM minutes either!

 

It tells me that the board is busy doing the operations roles and hasnt the capability or capacity to address the strategy. I could be wrong though, in which case the complaint is merely that we the mushroom members can expect a dose of fertilizer as and when it is deemed we need it, but Comms! I dont think you should expect that any time soon!