[Osmf-talk] Handling OSMF finances going forward

Kevin.Arruda at elektrobit.com Kevin.Arruda at elektrobit.com
Thu Oct 30 17:19:16 UTC 2014


A thought on this -

Has anyone looked into the cost/benefit of retaining an Accounting Firm or Financial Management Service?  I don't believe even redundant Treasurers is enough to address the laundry list of concerns and potential issues raised in the thread.   Also, there seems to be a general theme that ultimately relates to trust and reliability of person(s), to which there are few straightforward solutions if you even briefly consider human nature.

That said, the main benefits I see from this course of action: 
(1) Significant decrease in the liability assumed by the Treasurer(s)
(2) Significant confidence increase in the accuracy of any financial data.
(3) Built-in transparency (Accounting Firms are generally quite adept at providing this data :) 
(4) Provide scalability for OSMF's financial management.    

The main drawback:
(1) It of course costs money.  This cost should be reasonably proportional to the complexity and magnitude of the financials. 

Even if it is decided this is currently a premature or unwanted transition, it is likely an inevitable one.  Getting the due-diligence out of the way shouldn't hurt.

BR,

Kevin

-----Original Message-----
From: Oliver Kühn [mailto:oliver at osmfoundation.org] 
Sent: Thursday, October 30, 2014 2:51 AM
To: Frederik Ramm; osmf-talk at openstreetmap.org
Subject: Re: [Osmf-talk] Handling OSMF finances going forward

Hi Frederik,

I have already pointed out that you are dealing with non-issues. That is one of the bigger problems of the problems: we have Board members who are steering the attention to non-issues so that really important aspects don't get addressed.

Just to avoid the impression there is something to hide: we give Paypal access to everybody who requests it. We have several Board members with access to our bank account. Everybody can interact with our accountant (as it is happening right now e.g. Henk and Simon are/were in direct contact with our accountant). Further any financial transaction needs to be documented by paperwork, which is ensured by our accountant.

We are and should stay a flexible organization and not implement procedures that are stricter than those of multi-billion-dollar organizations. Please keep in mind that we turning only between 100.000 and 200.000 GBP per year.

As mentioned within the Board before I will give up the treasurer position at the AGM. So, feel free to go the position and implement the procedures and transparency that you would like to see. But please stop driving the attention of the full Board to non-issues.

Regards,
Oliver

Am 30.10.2014 um 01:37 schrieb Frederik Ramm:
> Hi,
>
>    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.
>
>
> Bye
> Frederik
>


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