May 25, 2018
Dear division presidents and zone presidents:
We are sharing a variety of financial documents related to our 2017-2018 and 2018-2019 fiscal years.
We had a number of successes in the year past and we are confident our strategic direction is sound. Some financial challenges remain and we will end the season in a deficit position.
Some key highlights of the year are as follows:
- Revenue for the year was $1,046,714, down from 2016-2017 due mostly to lower sales of our national uniform jackets. (The transition to new jackets happened in large measure the year before, so this decline was anticipated.)
- The deficit for the year was $27,248.
- Revenue from other sources, including sponsorship, showed modest growth.
- Expenses were managed carefully throughout the year.
- There were a number of factors contributing to the deficit, including some unanticipated one-off expenses that could not be absorbed:
- Liability insurance premiums increased by $9,000 due to a number of claims the year prior.
- $5,000 to conduct a legal review to mitigate risk exposure to CRA vis-a-vis original approved charitable programs and teaching SFA to external customers.
- Two annual conferences in a single fiscal year.
- Significantly lower-than-expected attendance at Altitude (see comparative receipts and disbursements document).
A number of documents are included for your review:
- Audited financial statements
- Comparative of forecast to actual as at 31-MAR-18
- Comparative 5-year as at 31-MAR-18
- Comparative review of national conferences costs
Our accumulated deficit continues to be a concern, however our national finance committee is confident in the direction we are taking in reviewing actual financial results on a monthly basis in addition to the ability to guide our staff, MC and board. Future planning includes replenishing reserve accounts as well as discussion surrounding the establishment of a working capital reserve.
Our annual operating plan and the operating budget for the 2018-2019 fiscal year are attached. The annual operating plan evolves from year to year and is designed to bring the strategic plan to life. The budget was prepared with strong support from Pam FitzGerald on our national finance committee. Many thanks to Pam for her significant assistance.
There are a few important notes and assumptions:
- Member certification fees remain unchanged from 2017-2018.
- There is no conference in the 2018-2019 fiscal year.
- The budget forecasts a surplus of $22, 297 for the year.
- Our financial software is being formatted per the operating budget as presented. It will be user friendly and offer more accurate reporting.
- Effective February 2018, head office financials are being reviewed on a monthly basis with reports to the board in a timely fashion.
The budget is a powerful and useful tool to help the board of directors discharge their fiduciary responsibilities. First and foremost, a budget is a plan and it is based on various assumptions about the future. It is important to note that operational plans can change during the year as situations crystallize, in particular when you consider the motion recently brought forward for the sale of the building located at 4531 Southclark Place. Strictly on this basis, it’s important to remember that budgets can also change. If the budget is updated as a result of the vote on the sale of building, there will be clear and explicit information about the impact on our finances. Any changes in the operating budget will be approved by the board.
As usual, we are available to answer any questions.
Colin Saravanamuttoo Tom Tull
President and Chief Executive Officer Vice-President, Business Operations