I have recently finished my first year as Secretary-Treasurer of SPSSI and want to take this opportunity to report on the financial health of the organization as well as some of the actions that SPSSI Council has taken over the past year to ensure the continued well being of the organization. It will come as no surprise that SPSSI, like all of us, has been affected by the economic downturn. Although SPSSI remains financially sound, we are seeing the effects of these turbulent economic times on our revenue streams. This decrease in revenue has forced SPSSI Council to make some tough budget decisions over the past year while remaining mindful of our mission and that our research and policy activities become even more relevant to health of our communities during this time of economic strife. Let me describe the challenges that we have been facing and the actions that Council has taken to meet those challenges.
o We receive payments via a Paypal account. The accountants noted that we must reconcile the on-line payment history for our Paypal account with our bank statements, which had not been done (a significant deficiency). They recommend that this reconciliation be performed monthly. Susan Dudley has reconciled all of the 2009 Paypal and bank statements and is now performing this reconciliation on a monthly basis.
o The auditors also noted that Susan Dudley was responsible for both the accounting functions of the Society and had access to cash assets (a material weakness in our accounting practices as it increases our risk of exposure to fiscal mismanagement). In response, Susan has trained Anila to take over the accounts payable functions in QuickBooks so that she no longer has responsibility for both tasks.
The accountants also identified two additional areas for improvement.
o They asked that we begin to track donated services (e.g., time donated by unpaid volunteers like officers, committee chairs, etc.) by individual rather than making gross estimates of donated time at the end of the year. Susan Dudley is now asking each person volunteering time to SPSSI to make an estimate about the amount of time that has been donated each year.
o Because we are now tracking membership on a 12-month rolling basis, we are required to defer the income from dues until the month in which it is earned. Susan Dudley has now put into place procedures for deferring the dues income. This will result in a total deferral of $30,626 collected in 2009 to 2010 income.
We recently received the auditors’ review (a process that is less detailed than a full audit) of our FY2009 books and no further problems were identified. I would like to express my appreciation to Dr. Susan Dudley, our Executive Director, for the excellent job she has done in implementing new procedures that allow us to put the auditors’ previous concerns to rest.
o For Fiscal Year 2009, the SPSSI investment account showed a net increase (i.e., the percentage increase after payment of fees) of +10.98%. This rate of return is lower than what was seen for the S&P500 for 2009, which was 26.47%, in part because of our socially responsible investment practices. However, if we look over the three-year period that ended 1/1/2010, the investment account had a net increase of 0.06%, compared to the S&P500, which had a loss of 15.48%.
o At the end of August 2010 our investment account had a total market value of $1,821,329. Currently, SPSSI’s investment portfolio is divided as follows: $132,060 in Money Market Accounts (7%), $877,264 in Equity (48%), $751,672 in Fixed Income Accounts (41%), and $54,613 in other assets (3%). In addition, we maintain $821,072 in a Cash Account. The Audit and Finance Committee recently reviewed this distribution and voted to make no changes at this time.
o Our investment team, Dennis Paul and Pamela Roseneau have severed their relationship with UBS. They moved to Hightower on June 1. After consultation with the SPSSI Executive Committee and the Audit & Finance Committee, we retained them as our managers and move our assets to Charles Schwab Financial where Dennis and Pamela will continue to manage them. Their current outlook on the future of the market is that we should continue to invest more heavily in equities than in bonds. The Audit and Finance Committee has reviewed their investment strategy and remains confident in that strategy and the team’s ability to manage our money in this volatile market.
Please do not hesitate to contact me about how our organization is working to meet your needs as a member. I can be reached at: firstname.lastname@example.org