[Lnc-business] March End-of-Month Financial Reports

[Robert S. Kraus]

All,

Please note, at this time staff has already set aside $20k towards the 
convention in one of our reserve accounts. We are of course hoping we do 
not have to use these funds for operational or ballot access expenses 
(at the discretion of the chair, exec director & treasurer) & that we 
can continue to put away money into this account. As a reminder, the 
past several cycles we have "fronted" ballot access with these funds & 
then use the funds raised at the convention to pay for the convention 
itself.

Staff will be keeping the treasurer posted on how much we are able to 
save towards the convention & we are sure he will keep you up to date as 
well.

Thank you!

Robert S. Kraus - Operations Director
Operations at LP.org
Libertarian National Committee, Inc.
1444 Duke Street
Alexandria, VA 22314
Ph: 202.333.0008 x 231

On 5/1/2019 2:20 AM, Alicia Mattson via Lnc-business wrote:
> P.S.  Because the LNC postponed the COC proposal to treat conventions as
> "special events" and require preservation of that cash, through March we
> have so far raided:
>
> $13,500 of Deferred Convention Revenues - $3,099 of Prepaid Convention
> Expenses = $10,401
>
> of cash from the 2020 convention event.  As I already mentioned, that
> number is going to dramatically increase in the April financials because we
> have started selling packages, but we're not setting those funds aside.  By
> the time of our July meeting in Austin, it could easily be $100,000 of 2020
> convention funds that will have been borrowed from but not repaid to the
> convention event.
>
> -Alicia
>
>
> On Wed, May 1, 2019 at 12:10 AM Alicia Mattson <alicia.mattson at lp.org>
> wrote:
>
>> Deferred Convention Revenues are included in the total cash, so not
>> backing them out means that we're treating that cash as if there will be no
>> convention expenses, so we're free to just go ahead and use that money now
>> free and clear.
>>
>> Side note:  For those to whom it isn't obvious, the total cash amount is
>> inflated by the amount of Deferred Convention Revenues, offset by the
>> portion of them which have already been spent on convention expenses, so
>> when calculating how much of that cash we can spend next month, we need to
>> subtract (Deferred Convention Revenues - Prepaid Convention Expenses) from
>> the Total Cash.
>>
>> Also side note:  As of the end of March, the 2020 convention cash is only
>> inflating our total cash by about $10k, but as of the end of April, it's
>> going to be more like $80k.  If the reserve formula doesn't back that out,
>> the LNC may think we're in a lot better shape than we are.
>>
>> Even under the existing definition of "reserve" in the policy manual, I
>> think it is warranted to back out the convention cash.
>>
>> If we look at the policy definition as only authorizing math involving the
>> balance sheet line items that are named in the definition, then we
>> shouldn't adjust for the Other Accrued Expenses, either.  This report does
>> use the Other Accrued Expenses in the formula, though.  The rationale given
>> was that they "are essentially the same as accounts payable".  So it's
>> viewing the policy as a concept rather than a strict limitation on which
>> balance sheet items to use.
>>
>> I think the (Deferred Convention Revenues - Prepaid Convention Expenses)
>> factor is also essentially the same as the restricted funds which are to be
>> subtracted under the policy.  The convention cash isn't technically
>> "restricted" under an accounting definition because you can only restrict
>> equity accounts, and they're not equity until we have recognized them as
>> revenue, which doesn't happen until the convention happens.  But
>> conceptually, they're essentially the same as restricted funds.  They're
>> supposed to be saved and used to pay for the convention.  We haven't even
>> earned them yet until the convention event.
>>
>> So under the "essentially the same" concept used to include Other Accrued
>> Expenses in the formula, I think we should include the convention elements
>> as well.
>>
>> I'd rather not rewrite the policy to name specific balance sheet lines
>> because then all it would take to throw the calculation off is a name
>> change in a balance sheet description.  I'd rather keep the policy
>> definition as a concept, and then include the items on the balance sheet
>> that are essentially the same as the concepts in the definition.
>>
>> -Alicia
>>
>>
>>
>>
>>
>> On Tue, Apr 30, 2019 at 4:35 PM Tim Hagan via Lnc-business <
>> lnc-business at hq.lp.org> wrote:
>>
>>> The March End-of-Month Financial Reports are attached.
>>>
>>> The Policy Manual, page 7, says:  "Reserve" is calculated as the total
>>> cash balance less the sum of all restricted funds and accounts payable
>>> at month end.
>>>
>>> The reserve formula in these reports was changed to match this Policy
>>> Manual definition. It no longer includes Prepaid Expenses nor Deferred
>>> Revenue. Including the Prepaid Convention Expenses and Deferred
>>> Convention Revenue in the formula should require a change to the Policy
>>> Manual. Other Accrued Expenses are essentially the same as accounts
>>> payable, so I included them in the formula. The reserve for March is
>>> calculate from numbers on pages 9 and 10 thusly:
>>>
>>> Reserve = Total Cash - (Temp. Restricted Balances + Accounts Payable +
>>> Other Accrued Expenses)
>>>
>>>       = 34168.75 - (13706.53 + 8471.70 + 13872.50)
>>>
>>>       = -1881.98
>>>
>>> I updated the reserve chart on the bottom of page 3 to show the reserve
>>> for the past two years using this formula.
>>>
>>> ---
>>> Tim Hagan
>>> Treasurer, Libertarian National Committee
>>