[Osmf-talk] Financial & organisational questions

[Frederik Ramm]

Hi,

On 08.05.2018 10:18, Thomas Barris wrote:
> 1. The Independent Accountants' Report in the Official Financial
> Statement 2016 is not signed. Same applies to earlier reports.  Are
> there any ongoing issues with the reports?

No, the accountant has signed these reports and submitted them to HMRC
as usual. It's just that the PDF I uploaded to our web site is the
version is the un-signed version.

> 2. The OSMF Website says there were 397 normal and 255 associate members
> as of Dec 2016 [3]. Using the fee of 15 GBP one would assume the annual
> membership fee for non-corporates would be around 9,780 GBP. However,
> the financial statements for 2016 [2] show only 8,198 GBP on page 10. (I
> am a little bit surprised how the number can end with 8).

Sadly the individual membership payments are a hit-and-miss for our
accounting. We don't usually have members actively quitting, they just
"do not renew their membership". But at what point do you know that they
don't renew? Members are usually given a grace period where they are
still considered members but they may be "in arrears" i.e. haven't paid
(yet). So that explains why the numbers never match.

The reason why the number ends with 8 is that if someone sends us £15
through the banking system, due to exchange rate fluctuations, it is
quite normal for us to receive £14.78 or £15.21 or whatnot. Sometimes
people also round their payment up and send us e.g. 20 EUR. If someone
overpays then we put that as a donation, but if someone underpays then
we don't record "£15 membership and £0.22 currency exchange loss", we
record "£14.78 membership".

> 3.  The Q3 2017 [4] report says that we owe Barclays 12k GBP, if I read
> it correct. At the same time there is a Euro deposit amounting to 27k
> GBP at Barclays. Is the board entitled to take up loans?

The left column ("Period") lists the *changes* during that period.

The Barclays account balance at the beginning of Q3 was

GBP 50,535 + EUR 42,515

and at the end of Q3 it was

GBP 38,036 + EUR 72,834

i.e. about GBP 12k less and about EUR 30k more. These are the figures
that you are seeing in the "Period" column - we don't "owe" Barclays GBP
12k but our GBP balance was reduced by 12k in the period.

The reason for this shifting towards the EUR balance is that many of the
SOTM Aizu-Wakamatsu conference expenses were paid from the GBP balance,
but we're taking corporate membership and conference sponsorship in EUR,
so there was some income on the EUR account.

> Generally, the AoA says "/Except as provided by law or authorised by the
> directors or a decision of the General Meeting, no person is entitled to
> inspect any of the Foundation's accounting or other records or documents
> merely by virtue of being a member or associate member./ ". I think
> there should be more transparency....either by being more transparent
> with regards to the records or by adding some more comments in the
> financial reporting.

I try to provide a slightly more wordy explanation in my "treasurer's
report" at the end of the year. I could certainly provide a short verbal
update to go with the quarterly figures as well. We have changed
accountants between 2017 and 2018 (our old accountant has retired) and
we're now using a "cloud" based accounting system named Xero. Maybe it
can also produce more legible reports - we're still getting to grips
with it.

I'm very much open for any recommendations that improve financial
transparency. The limits of transparency are (1) my workload mustn't go
through the roof and (2) privacy of donors/members must be respected.
One thing I've been wanting to do for ever is have a volunteer auditor
who comes from the community, signs an NDA, gets all the accounting
paperwork and bank account statements for a year, and then reports to
the members (either "yep, accountant and treasurer seem to have done
their job ok" or "something isn't right here"). However, for various
reasons this hasn't worked out yet. I actually had someone with
experience in that role from Germany for 2016, but he gave up because he
couldn't get his mind around the apparently different UK accounting
practices. Maybe this gets easier with Xero. Thomas, do you want to have
a go at 2017?

> 4. It seems Heather has not been registered as Director at the Companies
> House [5]. The registration is usually a question of days. Is Heather a
> valid director of the OSMF?

We went through that at our recent in-person meeting in Karlsruhe and
will update the Companies House records real soon now.

Bye
Frederik

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