[Osmf-talk] Handling OSMF finances going forward

Frederik Ramm frederik at remote.org
Thu Oct 30 00:37:30 UTC 2014


  I've been thinking about how to handle OSMF finances in the future,
but about the grand "we need more money and proper budgeting" issues
that Simon has outlined
(http://www.openstreetmap.org/user/SimonPoole/diary/25977) but instead
in an altogether more bean count-y way.

I've expressed my own unhappiness with a certain lack of transparency
even for board members. With things as they currently are, only the
treasurer and the (external) accountant get to see any invoices or
transaction details or account statements, or indeed what the current
account balance is.

This means that, in theory, all of the following could easily happen:

* a third party could improperly charge our credit card with something
and the treasurer could accidentally overlook it;

* a board member could hand in an expense report for "essential OSMF
travel" and the treasurer would pay it with no questions asked because
he's good friends with the board member who handed in the expense
report, even if on closer inspection the expense was for a leisure trip;

* the treasurer could simply make a Paypal payment for his or a friend's
private stuff without anyone even noticing.

All this could easily be done by a treasurer acting improperly, or even
just negligently.

To my knowledge nothing like this has happened in the past, but I am
uncomfortable with the idea that there are practically zero checks and
balances that would kick in *if* something like that were to happen.

Many of you want OSMF to grow, to even employ people, manage a larger
budget. How big will the budget have to become before someone is tempted
to sneak away a little money undetected, pay for a few perks here and a
little flight there?

Let me highlight three different situations or cases that might inform
our situation.

Case 1 - unnamed German nonprofit

A friend of mine was on the board of a small organisation much like ours
and they blindly trusted their accountant to do the right thing; it
turned out that the accountant had run up personal debt from buying a
house and embezzled money from the organisation (fully, but
unrealistically, planning to secretly return it after she had rectified
her personal situation). The situation was only detected after over a
year and the loss of some EUR 50k. These things happen when nobody looks.

Case 2 - FOSSGIS

I am the treasurer of FOSSGIS e.V., an organisation of about our size in
Germany. We have a board of four people. Each member of our board knows
the Paypal password and our online banking login; only I am authorized
to make payments but the others *could* if they wanted. In addition, I
regularly download the bank statements from the bank web site and upload
them to our board SVN, and every board member has access to our GnuCash
accounting system also stored there. All invoices and all expense
reports are also uploaded to SVN and are in plain view for all board
members, going back some 10 years.

If any of my peers on the FOSSGIS board want to know something about our
finances and I am not available to tell them, then they can just look it
up. If they want to know how much board member X has asked for their
recent flight to somewhere, it's right in front of their nose.

That doesn't absolve me as the treasurer from doing my job right. But
knowing that there can be a second or third pair of eyes at any time
actually feels good.

Case 3 - INKA e.V.

In a different German nonprofit with a budget roughly half of ours, INKA
e.V., I play the role of volunteer auditor. Each year the General
Meeting appoints two volunteer auditors who are not part of the board,
and who will meet with the treasurer when the treasurer prepares his
report for the next General Meeting. I'll be shown the yearly report
prepared by the treasurer, plus a full printout of all bank transactions
of that year, and one or two folders full of invoices, and I and the
second auditor will look through them, check for any funny transactions,
verify that proper invoices are present, and so on. We regularly have a
couple of questions to grill the treasurer with, and then sign a report
for the General Meeting that says we've checked the books and found them
ok. The fact that there *is* such an auditing is actually an incentive
for the treasurer to do his best - he's just a volunteer too but at
least he knows that someone is going to appreciate his work at the end
of the year ;)

While the INKA books are done by an external accountant, that accountant
has no subject matter knowledge; they just check if there's an invoice
for every expense but if the treasurer were to buy himself a new laptop
that wouldn't faze the accountant one bit as long as the invoice is there.

I'd like to believe that all the checks and balances I mention would be
suitable means to make our own book keeping more professional (and
professional with regard to finances means: not based on trust alone).

I see absolutely no reason why we should not make our finances fully
transparent to the whole board like in my "Case 2", but I'd like to hear
from those interested whether there is anything to say against that,
and/or what you have to say about the volunteer auditing from "Case 3".

If I should find myself elected to the new board, I'd like to set in
motion whatever is required to achieve better financial checks and balances.

And I would like to stress again, just in case anyone is tempted to play
the "you don't trust" card, that having checks and balances when it
comes to dealing with money is not a sign of mistrust, but one of
professionalism and propriety.


Frederik Ramm  ##  eMail frederik at remote.org  ##  N49°00'09" E008°23'33"

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