[Lnc-business] incorrect reserve calculations in monthly financials

Sun Apr 7 14:42:05 EDT 2019

Thank you - I appreciate the update.

-Caryn Ann

On Sun, Apr 7, 2019 at 11:26 AM Tim Hagan via Lnc-business <
lnc-business at hq.lp.org> wrote:

> I'm still looking into the reserve calculation. I will come up with a
> reserve formula that makes sense, and send a chart showing the newly
> calculated reserve for the past year. I want to make sure it's correct
> before changing the reports. Like Ms Mattson mentioned, we found out
> that the formula used has been changed. The last change is definitely
> incorrect in how it added deferred convention revenue.
>
> ---
> Tim Hagan
> Treasurer, Libertarian National Committee
>
> On 2019-04-07 10:22, Caryn Ann Harlos via Lnc-business wrote:
> > Has anyone else taken a look at this?  I am very interested in what is
> > going on here.
> >
> > On Wed, Apr 3, 2019 at 12:43 AM Alicia Mattson via Lnc-business <
> > lnc-business at hq.lp.org> wrote:
> >
> >> Colleagues,
> >>
> >> It looks to me like the February financial report we just received
> >> overstates our reserve amount by about $37k.
> >>
> >> I am trying to make sense of the reserve calculations published in our
> >> monthly financial statements (p. 3, Reserve Adequacy Trend chart), and
> >> not
> >> just for this one most recent month.
> >>
> >> Over the past two years, the FORMULA used to calculate the blue number
> >> in
> >> that chart (called "Curr Month Resv" in the header) has changed
> >> several
> >> times without our knowledge.  As I will show you, the several
> >> different
> >> formulas used at different times give very different answers when
> >> applied
> >> to the same month's data, often portraying our financial position as
> >> being
> >> better than I think it really is.
> >>
> >> It seems that for some LNC members, the reserve is the main number
> >> they
> >> look at for a quick snapshot of our current position, so it's
> >> important to
> >> get that number right.
> >>
> >> First, a big-picture concept: what does our reserve level calculate?
> >> Why
> >> is it an important measure?  It calculates whether we have enough
> >> unrestricted cash on hand to pay the next month's worth of occupancy,
> >> labor, and governance expenses.  The amount of cash we need to meet
> >> that
> >> goal is listed as the "Resv Target" in that p. 3 chart on our monthly
> >> financials.  The blue number is the available cash we currently have
> >> relative to that target number.  The 2019 goal is to have $57,225 at
> >> the
> >> end of each month.  The February 2019 chart shows us at -$11,529, but
> >> I
> >> think we're really at -$48,839.
> >>
> >> Please refer to the attached spreadsheet, and below I will walk you
> >> through
> >> it.  You won't be able to follow this well on a phone...get your
> >> full-sized
> >> screen.  :-)
> >>
> >> The numbers in rows 4 - 15 are copied/pasted directly from the monthly
> >> financial reports sent to the LNC on this email list.  I have listed
> >> the
> >> page and line numbers where those figures can be found in each month's
> >> report.  These are the data points that (at various times) have been
> >> (or
> >> ought to be) used in the reserve calculation.
> >>
> >> Row 21 is each month's reported reserve amount, also copied/pasted
> >> directly
> >> from the blue "Curr Month Resv" in the p. 3 Reserve Adequacy Trend
> >> chart in
> >> the monthly financial reports.
> >>
> >> Row 16 contains the formula that represents how I believe the reserve
> >> should be consistently calculated.
> >>
> >> Rows 17-20 show four of the several different formulas that seem to
> >> have
> >> been used at different times over the past two years to calculate row
> >> 21.
> >> You'll quickly notice that the results of the four different formulas
> >> applied to the same month's data aren't even similar figures.
> >>
> >> MAR - SEPT 2017
> >> From March 2017 to September 2017, it seems that the formula in Row 17
> >> was
> >> used to calculate the published number in Row 21.  This formula is
> >> close to
> >> my proposed formula in Row 16 for that time frame.  For three of those
> >> seven months I noticed manual errors were made in calculating the
> >> published
> >> number, as described in rows 25 - 27, but otherwise that formula was
> >> used
> >> consistently for those seven months.
> >>
> >> OCT - DEC 2017
> >> I have no theory about how the October to December 2017 figures in Row
> >> 21
> >> were derived.  The numbers don't track with any of the other formulas
> >> I
> >> identified here.
> >>
> >> JAN - FEB 2018
> >> It seems the formula in Row 18 was used to calculate the published
> >> number
> >> in Row 21, but only for two months.
> >>
> >> MAR - MAY 2018
> >> It seems the formula in Row 19 was used to calculate the published
> >> number
> >> in Row 21, but only for three months.
> >>
> >> JUN - JULY 2018
> >> I have no theory about how the figures in Row 21 were derived.  The
> >> numbers
> >> don't track with any of the other formulas I identified here.
> >>
> >> AUG - DEC 2018
> >> It seems the formula in Row 20 was used to calculate the published
> >> number
> >> in Row 21 (with the exception of a $1000 manual error described in Row
> >> 28).
> >>
> >> Whatever the correct formula is, it should be the same formula from
> >> month
> >> to month, not changing at least five times within a two-year period,
> >> with
> >> such wildly different results which overstate our position.
> >>
> >> I had an email discussion with Mr. Hagan and Mr. Kraus about these
> >> fluctuations just prior to our March 9-10 LNC meeting, and Mr. Hagan
> >> intended to work with Mr. Kraus during that weekend to establish an
> >> approved formula.  Now we have a new financial statement, and I can't
> >> figure out how this one was calculated, either.
> >>
> >> It may well be that Mr. Hagan and Mr. Kraus didn't have a chance to
> >> work on
> >> it during the weekend of that meeting, but since the reserve is the
> >> lead
> >> number that was referenced when the February report was sent to us, it
> >> seems this should be sorted out sooner rather than later so that the
> >> LNC
> >> can rely on consistent data.
> >>
> >> -Alicia
> >>
> >
> >
> > --
> >
> > *  In Liberty,*
> >
> > *Libertarian Party and Libertarian National Committee Secretary *-
> > Caryn.Ann.
> > Harlos at LP.org <Caryn.Ann.Harlos at LP.org> or Secretary at LP.org.
> > *Chair, LP Historical Preservation Committee* - LPedia at LP.org
> > Call me at 561.523.2250 and follow my public figure page at
> > facebook.com/pinkflameofliberty/
> >
> > =========================================================================
> > Peaceful Commerce With All Nations * Non-interventionism * Re-Legalize
> > All
> > Drugs * End Government Intrusion In The Bedroom * Repeal All Gun Laws *
> > Abolish All Taxation * Sound, Free-market Money * Abolish The Fed * End
> > Corporate & Individual Welfare * Abolish The IRS and Repeal the Income
> > Tax
> > * Privatize Transportation Infrastructure * Free-market Emergency
> > Services
> > * Open Migration * Transfer Government Schools To The Private Sector *
> > Eliminate Regulation *
> >
> > *VOTE LIBERTARIAN * 800-ELECT-US or http://www.LP.org
> > <http://www.lp.org/>*
> > =========================================================================
>

-- 

*  In Liberty,*

*Libertarian Party and Libertarian National Committee Secretary *- Caryn.Ann.
Harlos at LP.org <Caryn.Ann.Harlos at LP.org> or Secretary at LP.org.
*Chair, LP Historical Preservation Committee* - LPedia at LP.org
Call me at 561.523.2250 and follow my public figure page at
facebook.com/pinkflameofliberty/

=========================================================================
Peaceful Commerce With All Nations * Non-interventionism * Re-Legalize All
Drugs * End Government Intrusion In The Bedroom * Repeal All Gun Laws *
Abolish All Taxation * Sound, Free-market Money * Abolish The Fed * End
Corporate & Individual Welfare * Abolish The IRS and Repeal the Income Tax
* Privatize Transportation Infrastructure * Free-market Emergency Services
* Open Migration * Transfer Government Schools To The Private Sector *
Eliminate Regulation *

*VOTE LIBERTARIAN * 800-ELECT-US or http://www.LP.org <http://www.lp.org/>*
=========================================================================