This is a good illustration of why I believe we need a simple "ledger" budget that shows each line item of income and each line item of expense, instead of just high-level documents that lump things into broad and often somewhat arbitrary categories. In other words, a long list of items formatted something like this: EXPENSES Date Amount Item or Service Purchased / (Source) Purpose and Context of Expenditure 12/1/16 $5.99 stapler (Office Depot) Wes's old stapler broke 12/1/16 $59.42 monthly utility bill (Northeast Power Co.) Office gas & electric 12/1/16 - 12/31/16 REVENUES Date Amount Source of Funds Nature of Donation / (Restrictions on Use of Funds, if any) 12/1/16 $25 Jane Doe Basic membership renewal (Unrestricted) 12/1/16 $10,000 John Smith Estate bequest to party (Restricted to paying for office) With this approach, staff could simply record each transaction into the ledger as it occurred, provide updates to the LNC on a quarterly or monthly basis, and not waste time trying to categorize stuff. It would then be the Treasurer's job to analyze the data, break it down into categories, provide additional historical context based on previous Treasurer's records, etc. as s/he deems most useful and appropriate, but members would also have access to the raw ledger data. I agree with Joshua that "If we make ourselves open, but exercise no control over fully half the budget, we are not transparent." Without this ledger detail, we are effectively seeing only half the budget – we can see overall numbers broken down into various large categories, but within these broad numbers and categories, all kinds of pertinent details may be invisible to us. Similarly, I would rather see staffers simply keep logs of what they are specifically spending their time doing, and provide those records periodically to the LNC, perhaps to be analyzed by a subcommittee, rather than wasting time trying to figure out how to log things, e.g. whether a conversation with an LNC member should be logged under Admin, Outreach, Branding, or whatever. That kind of of categorization is more of an oversight function, and not something staff should have to worry about. If, after seeing the detailed records and the analyses of those records by the Treasurer and others (perhaps the Audit Committee), the LNC decides staff are spending too much time or money on administration and not enough on outreach, then instructions could be communicated to them accordingly. Love & Liberty, ((( starchild ))) At-Large Representative, Libertarian National Committee (415) 625-FREE @StarchildSF On Dec 2, 2016, at 12:38 PM, Wes Benedict wrote:
An interesting experiment would be for each LNC member to track its hours for one month according to the Functional Allocation of Expenses procedures requested. It would give you some hands on experience in dealing with the reality that we switch categories often every few minutes, like from: 40 - Admin (this conversation)
88 - Outreach (LNC photos on the website)
80 - Media or 85 - Member Communications (delivering the message the LNC wants)
85 - Member Communication (recording the termination of the membership of person who disapproves of LNC buying meat)
40 Admin? or 55 Branding? or 70 - Ballot Access? - approving staff getting a poster about ballot access printed. I literally switch tasks every few minutes. Trying to track this in detail is very tough.
I really would like to see the LNC track themselves for a month. You'll find out how hard this is after one hour.
Wes Benedict, Executive Director Libertarian National Committee, Inc. 1444 Duke St., Alexandria, VA 22314 (202) 333-0008 ext. 232, wes.benedict@lp.org facebook.com/libertarians @LPNational Join the Libertarian Party at: http://lp.org/membership On 12/2/2016 3:21 PM, Joshua Katz wrote:
I pointed out earlier the concern I am expressing here, but I did it briefly and without much explanation, because I wanted to know if, in fact, I have misunderstood, if I was making a big mistake, and if my concerns were unfounded. All of that remains perfectly possible, but the fact that I have not received an explanation making those points suggests to me that perhaps I am onto something important.
80% of the proposed budget is accounted for by administration and compensation. A member seeing that might be excused for believing that the national party simply consumes 80 cents of each dollar received. This would be a mistake, but it would be an understandable mistake - and one we can easily prevent.
This member would be mistaken because compensation is not consumption. Staff does a lot of things. Staff work is a very large proportion of what the national party does. When we see an affiliate support line with a rather small number on it, it conceals the fact that staff spends a good amount of time supporting affiliates. Since staff time is split between different functions, we have a timesheet policy allowing staff time to be billed to different lines.
So this brings us to, perhaps, a bigger problem: even knowing this, the member reading this budget has no idea how much of staff time is spent on what projects. Perhaps most importantly, neither does the LNC. Certainly the LNC is not giving direction as to how staff time should be spent. We have, essentially, created a black box into which we place 50% of the annual budget.
A budget that breaks down staff time the way it is to be billed, and that funds staff time from line items, also allows members, at a glance, to see what priorities the national party has, and to know easily and quickly what staff is doing. Most importantly, it assures members that these priorities are being set by those they elect to make such decisions, not being left to the ED, or to chance, or to "whatever is most pressing at the moment." I have said before that my most pressing
After all, functional and operational transparency require not only that members see and hear us talking, but that we are talking about the things that members need to know. If we make ourselves open, but exercise no control over fully half the budget, we are not transparent.
This is not at all hard to fix. We know the proposed total compensation. We may modify it at our meeting. A portion of that, perhaps 20%, should be left in the compensation black-box. The LNC can decide what we'd like to prioritize by setting percentages to various functional lines. The remaining compensation multiplied by the percentage gives the amount to be moved from compensation to the appropriate line item.
Maintaining is also easy. Simply fund compensation from the various lines, in accordance with the timesheets received. The Treasurer can, in turn, keep an eye on the lines, and see if some lines are over or under funded. If so, the board can decide how to react - by amending the budget, or by instructing staff to respect the priorities set.
I am not known as a transparency champion. In large part, I have a different notion of transparency from many of my colleagues. The above shows the sort of transparency I worry about. I hope, though, that my colleagues who are known as transparency champions will join me on this issue, and join me in requesting that we not place 50% of our annual expenditure in a black-box line item such that members cannot use the budget to determine what it is that we do, and we cannot use the budget to govern the organization.
For my part, I am disinclined to vote for a budget that black-boxes 50%, and that charges 80% to administration.
Joshua A. Katz
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