RAA Finances

[FlyingVizsla]

Visited the RAA members' portal and found the Profit & Loss ending March 2013, with a promise to post each month's P&L (hoping this continues). It shows a profit (without depreciation).

 

I am singing & dancing, because the new format gives lots more information than what I could glean from the Annual Statements. The groupings are different so it was not as easy to compare to the Annual. I have attached a file which shows the % of revenue & expenditure. As expected the majority of our funds come from members (memberships, rego, insurance, GYFTS) - CASA's contribution is tiny 3%. Expenditure - Employee costs are our biggest, followed by Insurance. The next biggest (which I called Merchandise) is the cost of producing things for "sale" - magazine, caps, log books, Tech manuals etc. Note that the list next to each chart is sorted from biggest to smallest - things with a zero were left out.

 

Now a summary of how we are travelling to date (extrapolated to 12 months to compare with last year)

 

• Memberships down to 95%
   
   
  
• Rego down to 85%
   
   
  
• Advertising up 21%
   
   
  

 

 

 

 

• Employee Expenses - no change (includes $25k recruitment)
   
   
  
• Insurance up 6%
   
   
  
• Merchandise down to 88%
   
   
  
• Legal expense up 33%
   
   
  
• Computer system more than doubled - "IT support & Website Upgrade" = $13k
   
   
  
• Airshows more than doubled, but we did have Qld & WA this year
   
   
  
• Accident Investigation - tripled
   
   
  

 

 

This new format is very detailed and easy to understand. I would encourage all RAA members to have a look. There are few places to hide the whiskey now and I will be keeping an eye on it and commenting.

 

Full marks to Mark (new GM), or whoever, for putting this out to the members.

 

 

Sue

 

RAA finances March 2013.pdf

 

RAA finances March 2013.pdf

 

RAA finances March 2013.pdf

[fly_tornado]

15% drop in registrations is a huge hit.

 

 

[greybeard]

So does this mean the members only portal information has now been posted on a public forum? ;)

 

 

[FlyingVizsla]

So does this mean the members only portal information has now been posted on a public forum? ;)

No. I have not reproduced the Profit & Loss statement. As you can see I have not posted any figures, only percentages, in my analyses and the figures from the Annual Statements are public documents (which I have not disclosed here). So you can't even join the dots by %ing the 2012 figures. The RAA's secrets are safe.

The finances are supposed to be reported to the membership every 6 months and there is a statement to the end of Dec 2012 with this month's magazine. This initiative (monthly reporting) is going beyond what is required and goes a long way to openness.

 

If you can look at the P&L on the RAA site, it will show a great deal of detail - for example - that the Secretary's Expenses were $22.28 to the end of March. With a bit of work, you can ascertain if the various endeavours are paying their way - like ASIC cards, or what things cost eg meetings, before calling for more face to face meetings, insurance per seat, GYFTS donations.

 

The Governing Bodies forum is only viewable by registered RecFly members. It isn't as public as the rest of RecFly (thanks Ian).

 

I have the Annual Statements from RAA covering 2007 to 2012. I am happy to email them to any RAA member. Just ask.

 

Sue

 

 

[pmccarthy]

The minutes and accounts that came with the magazine this week were amateurish. My local motorcycle club does better. It seems crazy that we need to forensically examine the accounts, but I can see why the need has arisen. We urgently need to get a competent board in place so hat we can have confidence in what is reported. Thanks for filling the gap meanwhile.

 

 

[Old Koreelah]

Thanks for your work, Sue. In the stuff mailed out with the magazine, I was fascinated to see so much space allocated to reproducing the members' sign-in sheets. Why so large?

 

 

[AlfaRomeo]

Thanks Sue for taking the time to do this analysis and sharing it.

 

The format of the report on the RA-Aus website is the standard report as it pops off the RA-Aus Accounting (computer) system. It is detailed and to that extent quite useful as a one-off or backup report but it is not really a management report and its layout/format does not make it easy to read. A level of sensible summary would actually make it more informative for the non-accountants.

 

Monthly reports for other than the staff are not of much use unless you really love to read and analyse this data and understand the swings from month to month. More meaningful reporting would be for Quarterly periods as the monthly swings smooth out. The Quarterly reports should show how we are going against the Budget and how it compares with the same point in the previous year. And then, a brief commentary on the major differences by somebody in the know would save us all some head-scratching and asking the dumb questions. Finally, each Quarter there needs to be a revised forecast done which will give the Board an idea how the full year is looking like ending up. The full year Forecast will give an indication of how the Management plans to get back in line with Budget or show that a conscious decision has been to step away from the Board approved Budget. For example, not too many of us would be expecting the result this year to be close to the original budget. The Board should know by now how far below budget it is likely to finish up.

 

For monthly or quarterly reports to make any sense, accrual accounting principles need to be applied throughout the year and not just done as a (financial) year-end adjustment. In particular, depreciation and interest earned needs to be taken up month by month. At Half-Year end we should also see a Balance Sheet and perhaps a Source and Application of Funds report.

 

Unfortunately (for me), I don't have my copy of the Magazine yet so I can't comment on what is in it other than to guess that it will suffer from interest earned in the period but not accrued in the period overstating the loss in the first half year.

 

I applaud the presentation of what we now have from RA-Aus and the intention to keep this info flowing to the members. It has a long way to go before the reporting is smart and comprehensive but I am very willing to give the new management time to get on top of this as it has never been done well in the past - ever.

 

If you remember back a couple of years ago, when Steve Runciman took over as Treasurer after a vote of no confidence in David Caban (can't believe he is running for the Board again), there were grave suspicions around that RA-Aus was in deep financial trouble. As an apparently prudent step to avoid going into the red, Steve pushed through an increase in the fees structure. From memory, the fee increases included annual membership going up from $160 to $185 p.a. a 15.6% increase. Once Steve had a chance to bring the accounts up to date after 20 months of severe neglect, it was apparent that RA-Aus was not going down the gurgler and the increase was probably not necessary particularly considering the very strong financial reserves built up over many years.

 

However, we have seen the revenue from that increase disappear into thin air as it has been frittered away by poor management over the last two years. Hopefully, our new management will be able to get us back onto an even keel once they get past the registrations fiasco that is currently knocking our profitability for six.

 

 

[Head in the clouds]

Thanks Sue, great work.

 

I'm not an accountant but my wife is a mature student at uni and in her final year's accountancy training.

 

I asked for her interpretation of the half year financial report sent out with the current newsletter. I pointed out it's for 31st December so it's a half year old and she said that's not what it meant

 

The figure for Printing is very high but I'm guessing that the magazine costs are included in that because I can't find any other expense for the mag.

 

The only real issue my wife identified is that the Balance Sheet doesn't balance. There's a sum missing that's approaching the size of an average annual salary ... anyone know what that's all about?

 

 

[turboplanner]

The only real issue my wife identified is that the Balance Sheet doesn't balance. There's a sum missing that's approaching the size of an average annual salary ... anyone know what that's all about?

"Things?"

 

If that area was cleaned up with re-posting and proper dissection, there would be a lot less angst and possibly a lot of savings.

 

Also, if the Magazine Income and expenditure was clear, and Natfly income expenditure was clear, then members would be in a much better position to manage these, make decisions on whether to go electronic etc.

 

 

[turboplanner]

So does this mean the members only portal information has now been posted on a public forum? ;)

There would be no problem with that anyway. This is public money and has to be accounted for publicly, and has to be submitted to the ACT Department of Justice who make the full details available to anyone in the country.

 

RAA is not in a competitive business, so there are no "commercial in confidence" issues either.

 

If anything, some frank discussion on the actual figures would be positive.

 

 

[rankamateur]

There are few places to hide the whiskey now and I will be keeping an eye on it Sue

That is about the best news I have read on here for a while. The new boys club might not have so much need of it as the old anyway, looking at the skeletons rattling out of the cupboards it was probrably stress that drove them to it.