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

Wed May 1 16:24:24 EDT 2019

That’s all well and good but I share the same requirement.

To be blunt, past history has left me with a trust deficit.  We would not
be having this discussion if not- that monstrosity of a deficit would never
have happened.

On Wed, May 1, 2019 at 2:18 PM Joe Bishop-Henchman via Lnc-business <
lnc-business at hq.lp.org> wrote:

> A quibble. What led to the last budget crisis was approved aggregate
> spending exceeded the aggregate revenue. The "fronting" of funds
> *masked* that problem, and delayed its resolution, but was not the cause
> of it.
>
> No organization perfectly matches revenue coming in with expenses going
> out. All organizations have peaks and valleys that don't match up during
> the year, but ideally should match up in the aggregate for the entire
> budget period. Some organizations balance to cover cash needs during
> that period; others build up a healthy reserve balance to cover any
> troughs that then gets paid back.
>
> Once we have a reserve, we can insist on all sorts of sub-accounts that
> accurately credit and debit their own revenues and expenses as well as
> overhead, on a quarterly or monthly basis or whatever we like. The cash
> reserve tides over any troughs relative to the aggregate. To establish
> that requirement now, when we don't have a reserve, would be to cripple
> some programs at the expense of others for no total budgetary savings.
>
> JBH
>
> ------------
> Joe Bishop-Henchman
> LNC Member (At-Large)
> joe.bishop-henchman at lp.org
> www.facebook.com/groups/189510455174837
>
> On 2019-05-01 15:46, Richard Longstreth via Lnc-business wrote:
> > Robert et al,
> >
> > I do not support fronting of any funds for any reason. That is what led
> > to
> > our last budget heartache and we must learn to only pay for and pursue
> > projects we can afford. I think it important that things that are
> > earmarked
> > are only used where they are earmarked and not assume that other
> > funding
> > will come along to fill the holes. I also believe in not borrowing from
> > Peter to pay Paul as a principle. As such matters come to a vote, that
> > is
> > how I intend to cast my ballots.
> >
> > Richard
> >
> > On Wed, May 1, 2019 at 9:03 AM Robert S. Kraus via Lnc-business <
> > lnc-business at hq.lp.org> wrote:
> >
> >> 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
> >> >>
> >>
>
-- 

*  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
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