March End-of-Month Financial Reports
The March End-of-Month Financial Reports are attached. The Policy Manual, page 7, says: "Reserve" is calculated as the total cash balance less the sum of all restricted funds and accounts payable at month end. The reserve formula in these reports was changed to match this Policy Manual definition. It no longer includes Prepaid Expenses nor Deferred Revenue. Including the Prepaid Convention Expenses and Deferred Convention Revenue in the formula should require a change to the Policy Manual. Other Accrued Expenses are essentially the same as accounts payable, so I included them in the formula. The reserve for March is calculate from numbers on pages 9 and 10 thusly: Reserve = Total Cash - (Temp. Restricted Balances + Accounts Payable + Other Accrued Expenses) = 34168.75 - (13706.53 + 8471.70 + 13872.50) = -1881.98 I updated the reserve chart on the bottom of page 3 to show the reserve for the past two years using this formula. --- Tim Hagan Treasurer, Libertarian National Committee
Deferred Convention Revenues are included in the total cash, so not backing them out means that we're treating that cash as if there will be no convention expenses, so we're free to just go ahead and use that money now free and clear. Side note: For those to whom it isn't obvious, the total cash amount is inflated by the amount of Deferred Convention Revenues, offset by the portion of them which have already been spent on convention expenses, so when calculating how much of that cash we can spend next month, we need to subtract (Deferred Convention Revenues - Prepaid Convention Expenses) from the Total Cash. Also side note: As of the end of March, the 2020 convention cash is only inflating our total cash by about $10k, but as of the end of April, it's going to be more like $80k. If the reserve formula doesn't back that out, the LNC may think we're in a lot better shape than we are. Even under the existing definition of "reserve" in the policy manual, I think it is warranted to back out the convention cash. If we look at the policy definition as only authorizing math involving the balance sheet line items that are named in the definition, then we shouldn't adjust for the Other Accrued Expenses, either. This report does use the Other Accrued Expenses in the formula, though. The rationale given was that they "are essentially the same as accounts payable". So it's viewing the policy as a concept rather than a strict limitation on which balance sheet items to use. I think the (Deferred Convention Revenues - Prepaid Convention Expenses) factor is also essentially the same as the restricted funds which are to be subtracted under the policy. The convention cash isn't technically "restricted" under an accounting definition because you can only restrict equity accounts, and they're not equity until we have recognized them as revenue, which doesn't happen until the convention happens. But conceptually, they're essentially the same as restricted funds. They're supposed to be saved and used to pay for the convention. We haven't even earned them yet until the convention event. So under the "essentially the same" concept used to include Other Accrued Expenses in the formula, I think we should include the convention elements as well. I'd rather not rewrite the policy to name specific balance sheet lines because then all it would take to throw the calculation off is a name change in a balance sheet description. I'd rather keep the policy definition as a concept, and then include the items on the balance sheet that are essentially the same as the concepts in the definition. -Alicia On Tue, Apr 30, 2019 at 4:35 PM Tim Hagan via Lnc-business < lnc-business@hq.lp.org> wrote:
The March End-of-Month Financial Reports are attached.
The Policy Manual, page 7, says: "Reserve" is calculated as the total cash balance less the sum of all restricted funds and accounts payable at month end.
The reserve formula in these reports was changed to match this Policy Manual definition. It no longer includes Prepaid Expenses nor Deferred Revenue. Including the Prepaid Convention Expenses and Deferred Convention Revenue in the formula should require a change to the Policy Manual. Other Accrued Expenses are essentially the same as accounts payable, so I included them in the formula. The reserve for March is calculate from numbers on pages 9 and 10 thusly:
Reserve = Total Cash - (Temp. Restricted Balances + Accounts Payable + Other Accrued Expenses)
= 34168.75 - (13706.53 + 8471.70 + 13872.50)
= -1881.98
I updated the reserve chart on the bottom of page 3 to show the reserve for the past two years using this formula.
--- Tim Hagan Treasurer, Libertarian National Committee
P.S. Because the LNC postponed the COC proposal to treat conventions as "special events" and require preservation of that cash, through March we have so far raided: $13,500 of Deferred Convention Revenues - $3,099 of Prepaid Convention Expenses = $10,401 of cash from the 2020 convention event. As I already mentioned, that number is going to dramatically increase in the April financials because we have started selling packages, but we're not setting those funds aside. By the time of our July meeting in Austin, it could easily be $100,000 of 2020 convention funds that will have been borrowed from but not repaid to the convention event. -Alicia On Wed, May 1, 2019 at 12:10 AM Alicia Mattson <alicia.mattson@lp.org> wrote:
Deferred Convention Revenues are included in the total cash, so not backing them out means that we're treating that cash as if there will be no convention expenses, so we're free to just go ahead and use that money now free and clear.
Side note: For those to whom it isn't obvious, the total cash amount is inflated by the amount of Deferred Convention Revenues, offset by the portion of them which have already been spent on convention expenses, so when calculating how much of that cash we can spend next month, we need to subtract (Deferred Convention Revenues - Prepaid Convention Expenses) from the Total Cash.
Also side note: As of the end of March, the 2020 convention cash is only inflating our total cash by about $10k, but as of the end of April, it's going to be more like $80k. If the reserve formula doesn't back that out, the LNC may think we're in a lot better shape than we are.
Even under the existing definition of "reserve" in the policy manual, I think it is warranted to back out the convention cash.
If we look at the policy definition as only authorizing math involving the balance sheet line items that are named in the definition, then we shouldn't adjust for the Other Accrued Expenses, either. This report does use the Other Accrued Expenses in the formula, though. The rationale given was that they "are essentially the same as accounts payable". So it's viewing the policy as a concept rather than a strict limitation on which balance sheet items to use.
I think the (Deferred Convention Revenues - Prepaid Convention Expenses) factor is also essentially the same as the restricted funds which are to be subtracted under the policy. The convention cash isn't technically "restricted" under an accounting definition because you can only restrict equity accounts, and they're not equity until we have recognized them as revenue, which doesn't happen until the convention happens. But conceptually, they're essentially the same as restricted funds. They're supposed to be saved and used to pay for the convention. We haven't even earned them yet until the convention event.
So under the "essentially the same" concept used to include Other Accrued Expenses in the formula, I think we should include the convention elements as well.
I'd rather not rewrite the policy to name specific balance sheet lines because then all it would take to throw the calculation off is a name change in a balance sheet description. I'd rather keep the policy definition as a concept, and then include the items on the balance sheet that are essentially the same as the concepts in the definition.
-Alicia
On Tue, Apr 30, 2019 at 4:35 PM Tim Hagan via Lnc-business < lnc-business@hq.lp.org> wrote:
The March End-of-Month Financial Reports are attached.
The Policy Manual, page 7, says: "Reserve" is calculated as the total cash balance less the sum of all restricted funds and accounts payable at month end.
The reserve formula in these reports was changed to match this Policy Manual definition. It no longer includes Prepaid Expenses nor Deferred Revenue. Including the Prepaid Convention Expenses and Deferred Convention Revenue in the formula should require a change to the Policy Manual. Other Accrued Expenses are essentially the same as accounts payable, so I included them in the formula. The reserve for March is calculate from numbers on pages 9 and 10 thusly:
Reserve = Total Cash - (Temp. Restricted Balances + Accounts Payable + Other Accrued Expenses)
= 34168.75 - (13706.53 + 8471.70 + 13872.50)
= -1881.98
I updated the reserve chart on the bottom of page 3 to show the reserve for the past two years using this formula.
--- Tim Hagan Treasurer, Libertarian National Committee
All, Please note, at this time staff has already set aside $20k towards the convention in one of our reserve accounts. We are of course hoping we do not have to use these funds for operational or ballot access expenses (at the discretion of the chair, exec director & treasurer) & that we can continue to put away money into this account. As a reminder, the past several cycles we have "fronted" ballot access with these funds & then use the funds raised at the convention to pay for the convention itself. Staff will be keeping the treasurer posted on how much we are able to save towards the convention & we are sure he will keep you up to date as well. Thank you! Robert S. Kraus - Operations Director Operations@LP.org Libertarian National Committee, Inc. 1444 Duke Street Alexandria, VA 22314 Ph: 202.333.0008 x 231 On 5/1/2019 2:20 AM, Alicia Mattson via Lnc-business wrote:
P.S. Because the LNC postponed the COC proposal to treat conventions as "special events" and require preservation of that cash, through March we have so far raided:
$13,500 of Deferred Convention Revenues - $3,099 of Prepaid Convention Expenses = $10,401
of cash from the 2020 convention event. As I already mentioned, that number is going to dramatically increase in the April financials because we have started selling packages, but we're not setting those funds aside. By the time of our July meeting in Austin, it could easily be $100,000 of 2020 convention funds that will have been borrowed from but not repaid to the convention event.
-Alicia
On Wed, May 1, 2019 at 12:10 AM Alicia Mattson <alicia.mattson@lp.org> wrote:
Deferred Convention Revenues are included in the total cash, so not backing them out means that we're treating that cash as if there will be no convention expenses, so we're free to just go ahead and use that money now free and clear.
Side note: For those to whom it isn't obvious, the total cash amount is inflated by the amount of Deferred Convention Revenues, offset by the portion of them which have already been spent on convention expenses, so when calculating how much of that cash we can spend next month, we need to subtract (Deferred Convention Revenues - Prepaid Convention Expenses) from the Total Cash.
Also side note: As of the end of March, the 2020 convention cash is only inflating our total cash by about $10k, but as of the end of April, it's going to be more like $80k. If the reserve formula doesn't back that out, the LNC may think we're in a lot better shape than we are.
Even under the existing definition of "reserve" in the policy manual, I think it is warranted to back out the convention cash.
If we look at the policy definition as only authorizing math involving the balance sheet line items that are named in the definition, then we shouldn't adjust for the Other Accrued Expenses, either. This report does use the Other Accrued Expenses in the formula, though. The rationale given was that they "are essentially the same as accounts payable". So it's viewing the policy as a concept rather than a strict limitation on which balance sheet items to use.
I think the (Deferred Convention Revenues - Prepaid Convention Expenses) factor is also essentially the same as the restricted funds which are to be subtracted under the policy. The convention cash isn't technically "restricted" under an accounting definition because you can only restrict equity accounts, and they're not equity until we have recognized them as revenue, which doesn't happen until the convention happens. But conceptually, they're essentially the same as restricted funds. They're supposed to be saved and used to pay for the convention. We haven't even earned them yet until the convention event.
So under the "essentially the same" concept used to include Other Accrued Expenses in the formula, I think we should include the convention elements as well.
I'd rather not rewrite the policy to name specific balance sheet lines because then all it would take to throw the calculation off is a name change in a balance sheet description. I'd rather keep the policy definition as a concept, and then include the items on the balance sheet that are essentially the same as the concepts in the definition.
-Alicia
On Tue, Apr 30, 2019 at 4:35 PM Tim Hagan via Lnc-business < lnc-business@hq.lp.org> wrote:
The March End-of-Month Financial Reports are attached.
The Policy Manual, page 7, says: "Reserve" is calculated as the total cash balance less the sum of all restricted funds and accounts payable at month end.
The reserve formula in these reports was changed to match this Policy Manual definition. It no longer includes Prepaid Expenses nor Deferred Revenue. Including the Prepaid Convention Expenses and Deferred Convention Revenue in the formula should require a change to the Policy Manual. Other Accrued Expenses are essentially the same as accounts payable, so I included them in the formula. The reserve for March is calculate from numbers on pages 9 and 10 thusly:
Reserve = Total Cash - (Temp. Restricted Balances + Accounts Payable + Other Accrued Expenses)
= 34168.75 - (13706.53 + 8471.70 + 13872.50)
= -1881.98
I updated the reserve chart on the bottom of page 3 to show the reserve for the past two years using this formula.
--- Tim Hagan Treasurer, Libertarian National Committee
Robert et al, I do not support fronting of any funds for any reason. That is what led to our last budget heartache and we must learn to only pay for and pursue projects we can afford. I think it important that things that are earmarked are only used where they are earmarked and not assume that other funding will come along to fill the holes. I also believe in not borrowing from Peter to pay Paul as a principle. As such matters come to a vote, that is how I intend to cast my ballots. Richard On Wed, May 1, 2019 at 9:03 AM Robert S. Kraus via Lnc-business < lnc-business@hq.lp.org> wrote:
All,
Please note, at this time staff has already set aside $20k towards the convention in one of our reserve accounts. We are of course hoping we do not have to use these funds for operational or ballot access expenses (at the discretion of the chair, exec director & treasurer) & that we can continue to put away money into this account. As a reminder, the past several cycles we have "fronted" ballot access with these funds & then use the funds raised at the convention to pay for the convention itself.
Staff will be keeping the treasurer posted on how much we are able to save towards the convention & we are sure he will keep you up to date as well.
Thank you!
Robert S. Kraus - Operations Director Operations@LP.org Libertarian National Committee, Inc. 1444 Duke Street Alexandria, VA 22314 Ph: 202.333.0008 x 231
On 5/1/2019 2:20 AM, Alicia Mattson via Lnc-business wrote:
P.S. Because the LNC postponed the COC proposal to treat conventions as "special events" and require preservation of that cash, through March we have so far raided:
$13,500 of Deferred Convention Revenues - $3,099 of Prepaid Convention Expenses = $10,401
of cash from the 2020 convention event. As I already mentioned, that number is going to dramatically increase in the April financials because we have started selling packages, but we're not setting those funds aside. By the time of our July meeting in Austin, it could easily be $100,000 of 2020 convention funds that will have been borrowed from but not repaid to the convention event.
-Alicia
On Wed, May 1, 2019 at 12:10 AM Alicia Mattson <alicia.mattson@lp.org> wrote:
Deferred Convention Revenues are included in the total cash, so not backing them out means that we're treating that cash as if there will be no convention expenses, so we're free to just go ahead and use that money now free and clear.
Side note: For those to whom it isn't obvious, the total cash amount is inflated by the amount of Deferred Convention Revenues, offset by the portion of them which have already been spent on convention expenses, so when calculating how much of that cash we can spend next month, we need to subtract (Deferred Convention Revenues - Prepaid Convention Expenses) from the Total Cash.
Also side note: As of the end of March, the 2020 convention cash is only inflating our total cash by about $10k, but as of the end of April, it's going to be more like $80k. If the reserve formula doesn't back that out, the LNC may think we're in a lot better shape than we are.
Even under the existing definition of "reserve" in the policy manual, I think it is warranted to back out the convention cash.
If we look at the policy definition as only authorizing math involving the balance sheet line items that are named in the definition, then we shouldn't adjust for the Other Accrued Expenses, either. This report does use the Other Accrued Expenses in the formula, though. The rationale given was that they "are essentially the same as accounts payable". So it's viewing the policy as a concept rather than a strict limitation on which balance sheet items to use.
I think the (Deferred Convention Revenues - Prepaid Convention Expenses) factor is also essentially the same as the restricted funds which are to be subtracted under the policy. The convention cash isn't technically "restricted" under an accounting definition because you can only restrict equity accounts, and they're not equity until we have recognized them as revenue, which doesn't happen until the convention happens. But conceptually, they're essentially the same as restricted funds. They're supposed to be saved and used to pay for the convention. We haven't even earned them yet until the convention event.
So under the "essentially the same" concept used to include Other Accrued Expenses in the formula, I think we should include the convention elements as well.
I'd rather not rewrite the policy to name specific balance sheet lines because then all it would take to throw the calculation off is a name change in a balance sheet description. I'd rather keep the policy definition as a concept, and then include the items on the balance sheet that are essentially the same as the concepts in the definition.
-Alicia
On Tue, Apr 30, 2019 at 4:35 PM Tim Hagan via Lnc-business < lnc-business@hq.lp.org> wrote:
The March End-of-Month Financial Reports are attached.
The Policy Manual, page 7, says: "Reserve" is calculated as the total cash balance less the sum of all restricted funds and accounts payable at month end.
The reserve formula in these reports was changed to match this Policy Manual definition. It no longer includes Prepaid Expenses nor Deferred Revenue. Including the Prepaid Convention Expenses and Deferred Convention Revenue in the formula should require a change to the Policy Manual. Other Accrued Expenses are essentially the same as accounts payable, so I included them in the formula. The reserve for March is calculate from numbers on pages 9 and 10 thusly:
Reserve = Total Cash - (Temp. Restricted Balances + Accounts Payable + Other Accrued Expenses)
= 34168.75 - (13706.53 + 8471.70 + 13872.50)
= -1881.98
I updated the reserve chart on the bottom of page 3 to show the reserve for the past two years using this formula.
--- Tim Hagan Treasurer, Libertarian National Committee
-- Richard Longstreth Region 1 Representative (AK, AZ, CO, HI, KS, MT, NM, OR, UT, WA, WY) Libertarian National Committee richard.longstreth@lp.org 931.538.9300
A quibble. What led to the last budget crisis was approved aggregate spending exceeded the aggregate revenue. The "fronting" of funds *masked* that problem, and delayed its resolution, but was not the cause of it. No organization perfectly matches revenue coming in with expenses going out. All organizations have peaks and valleys that don't match up during the year, but ideally should match up in the aggregate for the entire budget period. Some organizations balance to cover cash needs during that period; others build up a healthy reserve balance to cover any troughs that then gets paid back. Once we have a reserve, we can insist on all sorts of sub-accounts that accurately credit and debit their own revenues and expenses as well as overhead, on a quarterly or monthly basis or whatever we like. The cash reserve tides over any troughs relative to the aggregate. To establish that requirement now, when we don't have a reserve, would be to cripple some programs at the expense of others for no total budgetary savings. JBH ------------ Joe Bishop-Henchman LNC Member (At-Large) joe.bishop-henchman@lp.org www.facebook.com/groups/189510455174837 On 2019-05-01 15:46, Richard Longstreth via Lnc-business wrote:
Robert et al,
I do not support fronting of any funds for any reason. That is what led to our last budget heartache and we must learn to only pay for and pursue projects we can afford. I think it important that things that are earmarked are only used where they are earmarked and not assume that other funding will come along to fill the holes. I also believe in not borrowing from Peter to pay Paul as a principle. As such matters come to a vote, that is how I intend to cast my ballots.
Richard
On Wed, May 1, 2019 at 9:03 AM Robert S. Kraus via Lnc-business < lnc-business@hq.lp.org> wrote:
All,
Please note, at this time staff has already set aside $20k towards the convention in one of our reserve accounts. We are of course hoping we do not have to use these funds for operational or ballot access expenses (at the discretion of the chair, exec director & treasurer) & that we can continue to put away money into this account. As a reminder, the past several cycles we have "fronted" ballot access with these funds & then use the funds raised at the convention to pay for the convention itself.
Staff will be keeping the treasurer posted on how much we are able to save towards the convention & we are sure he will keep you up to date as well.
Thank you!
Robert S. Kraus - Operations Director Operations@LP.org Libertarian National Committee, Inc. 1444 Duke Street Alexandria, VA 22314 Ph: 202.333.0008 x 231
On 5/1/2019 2:20 AM, Alicia Mattson via Lnc-business wrote:
P.S. Because the LNC postponed the COC proposal to treat conventions as "special events" and require preservation of that cash, through March we have so far raided:
$13,500 of Deferred Convention Revenues - $3,099 of Prepaid Convention Expenses = $10,401
of cash from the 2020 convention event. As I already mentioned, that number is going to dramatically increase in the April financials because we have started selling packages, but we're not setting those funds aside. By the time of our July meeting in Austin, it could easily be $100,000 of 2020 convention funds that will have been borrowed from but not repaid to the convention event.
-Alicia
On Wed, May 1, 2019 at 12:10 AM Alicia Mattson <alicia.mattson@lp.org> wrote:
Deferred Convention Revenues are included in the total cash, so not backing them out means that we're treating that cash as if there will be no convention expenses, so we're free to just go ahead and use that money now free and clear.
Side note: For those to whom it isn't obvious, the total cash amount is inflated by the amount of Deferred Convention Revenues, offset by the portion of them which have already been spent on convention expenses, so when calculating how much of that cash we can spend next month, we need to subtract (Deferred Convention Revenues - Prepaid Convention Expenses) from the Total Cash.
Also side note: As of the end of March, the 2020 convention cash is only inflating our total cash by about $10k, but as of the end of April, it's going to be more like $80k. If the reserve formula doesn't back that out, the LNC may think we're in a lot better shape than we are.
Even under the existing definition of "reserve" in the policy manual, I think it is warranted to back out the convention cash.
If we look at the policy definition as only authorizing math involving the balance sheet line items that are named in the definition, then we shouldn't adjust for the Other Accrued Expenses, either. This report does use the Other Accrued Expenses in the formula, though. The rationale given was that they "are essentially the same as accounts payable". So it's viewing the policy as a concept rather than a strict limitation on which balance sheet items to use.
I think the (Deferred Convention Revenues - Prepaid Convention Expenses) factor is also essentially the same as the restricted funds which are to be subtracted under the policy. The convention cash isn't technically "restricted" under an accounting definition because you can only restrict equity accounts, and they're not equity until we have recognized them as revenue, which doesn't happen until the convention happens. But conceptually, they're essentially the same as restricted funds. They're supposed to be saved and used to pay for the convention. We haven't even earned them yet until the convention event.
So under the "essentially the same" concept used to include Other Accrued Expenses in the formula, I think we should include the convention elements as well.
I'd rather not rewrite the policy to name specific balance sheet lines because then all it would take to throw the calculation off is a name change in a balance sheet description. I'd rather keep the policy definition as a concept, and then include the items on the balance sheet that are essentially the same as the concepts in the definition.
-Alicia
On Tue, Apr 30, 2019 at 4:35 PM Tim Hagan via Lnc-business < lnc-business@hq.lp.org> wrote:
The March End-of-Month Financial Reports are attached.
The Policy Manual, page 7, says: "Reserve" is calculated as the total cash balance less the sum of all restricted funds and accounts payable at month end.
The reserve formula in these reports was changed to match this Policy Manual definition. It no longer includes Prepaid Expenses nor Deferred Revenue. Including the Prepaid Convention Expenses and Deferred Convention Revenue in the formula should require a change to the Policy Manual. Other Accrued Expenses are essentially the same as accounts payable, so I included them in the formula. The reserve for March is calculate from numbers on pages 9 and 10 thusly:
Reserve = Total Cash - (Temp. Restricted Balances + Accounts Payable + Other Accrued Expenses)
= 34168.75 - (13706.53 + 8471.70 + 13872.50)
= -1881.98
I updated the reserve chart on the bottom of page 3 to show the reserve for the past two years using this formula.
--- Tim Hagan Treasurer, Libertarian National Committee
That’s all well and good but I share the same requirement. To be blunt, past history has left me with a trust deficit. We would not be having this discussion if not- that monstrosity of a deficit would never have happened. On Wed, May 1, 2019 at 2:18 PM Joe Bishop-Henchman via Lnc-business < lnc-business@hq.lp.org> wrote:
A quibble. What led to the last budget crisis was approved aggregate spending exceeded the aggregate revenue. The "fronting" of funds *masked* that problem, and delayed its resolution, but was not the cause of it.
No organization perfectly matches revenue coming in with expenses going out. All organizations have peaks and valleys that don't match up during the year, but ideally should match up in the aggregate for the entire budget period. Some organizations balance to cover cash needs during that period; others build up a healthy reserve balance to cover any troughs that then gets paid back.
Once we have a reserve, we can insist on all sorts of sub-accounts that accurately credit and debit their own revenues and expenses as well as overhead, on a quarterly or monthly basis or whatever we like. The cash reserve tides over any troughs relative to the aggregate. To establish that requirement now, when we don't have a reserve, would be to cripple some programs at the expense of others for no total budgetary savings.
JBH
------------ Joe Bishop-Henchman LNC Member (At-Large) joe.bishop-henchman@lp.org www.facebook.com/groups/189510455174837
On 2019-05-01 15:46, Richard Longstreth via Lnc-business wrote:
Robert et al,
I do not support fronting of any funds for any reason. That is what led to our last budget heartache and we must learn to only pay for and pursue projects we can afford. I think it important that things that are earmarked are only used where they are earmarked and not assume that other funding will come along to fill the holes. I also believe in not borrowing from Peter to pay Paul as a principle. As such matters come to a vote, that is how I intend to cast my ballots.
Richard
On Wed, May 1, 2019 at 9:03 AM Robert S. Kraus via Lnc-business < lnc-business@hq.lp.org> wrote:
All,
Please note, at this time staff has already set aside $20k towards the convention in one of our reserve accounts. We are of course hoping we do not have to use these funds for operational or ballot access expenses (at the discretion of the chair, exec director & treasurer) & that we can continue to put away money into this account. As a reminder, the past several cycles we have "fronted" ballot access with these funds & then use the funds raised at the convention to pay for the convention itself.
Staff will be keeping the treasurer posted on how much we are able to save towards the convention & we are sure he will keep you up to date as well.
Thank you!
Robert S. Kraus - Operations Director Operations@LP.org Libertarian National Committee, Inc. 1444 Duke Street Alexandria, VA 22314 Ph: 202.333.0008 x 231
On 5/1/2019 2:20 AM, Alicia Mattson via Lnc-business wrote:
P.S. Because the LNC postponed the COC proposal to treat conventions as "special events" and require preservation of that cash, through March we have so far raided:
$13,500 of Deferred Convention Revenues - $3,099 of Prepaid Convention Expenses = $10,401
of cash from the 2020 convention event. As I already mentioned, that number is going to dramatically increase in the April financials because we have started selling packages, but we're not setting those funds aside. By the time of our July meeting in Austin, it could easily be $100,000 of 2020 convention funds that will have been borrowed from but not repaid to the convention event.
-Alicia
On Wed, May 1, 2019 at 12:10 AM Alicia Mattson <alicia.mattson@lp.org
wrote:
Deferred Convention Revenues are included in the total cash, so not backing them out means that we're treating that cash as if there will be no convention expenses, so we're free to just go ahead and use that money now free and clear.
Side note: For those to whom it isn't obvious, the total cash amount is inflated by the amount of Deferred Convention Revenues, offset by the portion of them which have already been spent on convention expenses, so when calculating how much of that cash we can spend next month, we need to subtract (Deferred Convention Revenues - Prepaid Convention Expenses) from the Total Cash.
Also side note: As of the end of March, the 2020 convention cash is only inflating our total cash by about $10k, but as of the end of April, it's going to be more like $80k. If the reserve formula doesn't back that out, the LNC may think we're in a lot better shape than we are.
Even under the existing definition of "reserve" in the policy manual, I think it is warranted to back out the convention cash.
If we look at the policy definition as only authorizing math involving the balance sheet line items that are named in the definition, then we shouldn't adjust for the Other Accrued Expenses, either. This report does use the Other Accrued Expenses in the formula, though. The rationale given was that they "are essentially the same as accounts payable". So it's viewing the policy as a concept rather than a strict limitation on which balance sheet items to use.
I think the (Deferred Convention Revenues - Prepaid Convention Expenses) factor is also essentially the same as the restricted funds which are to be subtracted under the policy. The convention cash isn't technically "restricted" under an accounting definition because you can only restrict equity accounts, and they're not equity until we have recognized them as revenue, which doesn't happen until the convention happens. But conceptually, they're essentially the same as restricted funds. They're supposed to be saved and used to pay for the convention. We haven't even earned them yet until the convention event.
So under the "essentially the same" concept used to include Other Accrued Expenses in the formula, I think we should include the convention elements as well.
I'd rather not rewrite the policy to name specific balance sheet lines because then all it would take to throw the calculation off is a name change in a balance sheet description. I'd rather keep the policy definition as a concept, and then include the items on the balance sheet that are essentially the same as the concepts in the definition.
-Alicia
On Tue, Apr 30, 2019 at 4:35 PM Tim Hagan via Lnc-business < lnc-business@hq.lp.org> wrote:
The March End-of-Month Financial Reports are attached.
The Policy Manual, page 7, says: "Reserve" is calculated as the total cash balance less the sum of all restricted funds and accounts payable at month end.
The reserve formula in these reports was changed to match this Policy Manual definition. It no longer includes Prepaid Expenses nor Deferred Revenue. Including the Prepaid Convention Expenses and Deferred Convention Revenue in the formula should require a change to the Policy Manual. Other Accrued Expenses are essentially the same as accounts payable, so I included them in the formula. The reserve for March is calculate from numbers on pages 9 and 10 thusly:
Reserve = Total Cash - (Temp. Restricted Balances + Accounts Payable + Other Accrued Expenses)
= 34168.75 - (13706.53 + 8471.70 + 13872.50)
= -1881.98
I updated the reserve chart on the bottom of page 3 to show the reserve for the past two years using this formula.
--- Tim Hagan Treasurer, Libertarian National Committee
-- * In Liberty,* *Libertarian Party and Libertarian National Committee Secretary *- Caryn.Ann. Harlos@LP.org <Caryn.Ann.Harlos@LP.org> or Secretary@LP.org. *Chair, LP Historical Preservation Committee* - LPedia@LP.org Call me at 561.523.2250 and follow my public figure page at facebook.com/pinkflameofliberty/ ========================================================================= Peaceful Commerce With All Nations * Non-interventionism * Re-Legalize All Drugs * End Government Intrusion In The Bedroom * Repeal All Gun Laws * Abolish All Taxation * Sound, Free-market Money * Abolish The Fed * End Corporate & Individual Welfare * Abolish The IRS and Repeal the Income Tax * Privatize Transportation Infrastructure * Free-market Emergency Services * Open Migration * Transfer Government Schools To The Private Sector * Eliminate Regulation * *VOTE LIBERTARIAN * 800-ELECT-US or http://www.LP.org <http://www.lp.org/>* =========================================================================
participants (7)
-
Alicia Mattson -
Caryn Ann Harlos -
Joe Bishop-Henchman -
John Phillips -
Richard Longstreth -
Robert S. Kraus -
Tim Hagan