Doug PollardINTERVIEW WITH AN ACCOUNTANT
Not being financially-minded myself, I had a senior accountant and businessman go over the ALSO financial reports for 2011 Really Long Link
He is a specialist in turning around failing organisations and rescuing basket cases.
He concluded that with virtually no income, very high wage and premises costs, the organisation is doomed in its present form. Drastic changes must be made, and fast.
The management fees charged to ALSOCare are extremely high by benchmark standards. This is not sustainable.
Spread Too Thin
He said “The organisation has no focus, no identity, spreads itself too thin, over too many activities, tries to do too much.
"They need to move to a very very narrow focus and do only ONE core thing.
"At the same time they need to slash salaries, which are excessive, reduce headcount (or dispense with paid staff altogether) and move to much smaller and cheaper premises.
"And they need to do this regardless of any release of funds from the trust.”
Develop Commercial Income Streams
The organisation must then as a matter of urgency develop new sustainable commercial rather than grant-based income streams related to its new narrow focus. Income development work should be paid for on a commission only basis, and these commissions kept low.
Large premises are no longer needed as staff can work from home over the internet.
The printed directory should be dropped and move to online only publication.
He added, “Only by such belt-tightening and narrowing of focus will the organisation have any chance of survival, and that chance is slim.”
The Trust Funds Are A Distraction
While superficially an attractive option, the proposed release of funds from the trust would only delay and not avert disaster.
Instead the organisation should immediately focus on the drastic cutting, belt-tightening and narrowing that is required.
He considers that the notion that the funds can provide a life-raft is probably distracting management from facing up to its responsibilities.
The funds appear to offer an easy way out but this is in fact a dead end. It is unlikely in the extreme that the organisation could develop adequate income streams to maintain its operations in a mere 18 months.
And the plunder of those funds would damage the already poor reputation of the organisation, making its eventual rebirth less rather than more likely.
At best, plundering the funds will only delay the inevitable: better to keep the funds intact, shrink drastically and at once, and live within current means for the foreseeable future.
“They need to bite the bullet and get it over with,” he said.
Glimmer of Hope
There is one glimmer of hope.
"The ALSO Fabulous shop could be a money earner if it was not charged such high fees by the Foundation," he said.
Current Affairs
Rainbow Reporter
I urge AlsoCare members to VOTE NO by proxy now or do in person at the Special General Meeting of Also Care & Benevolent Society on April 20th. next.
By ceasing to be an 'at call - magic pudding' for the continuiing big spending of its related 'sister' - Also Foundation - there is an opportunity for Also Care to survive and only then, in my opinion, can realistic steps be taken to 'trim the cloth' of the Foundation.
Indicating that such steps may be taken taken, but without any useful detail, we now find Also Foundation has the gall to propose a Budget income receipt for 2011/12 of nearly $1 million dollars!. This is despite having NEVER achieved income streams anywhere near such an amount in at least their last three annual budgets! Over this same period of time Foundation Directors repeatedly refused calls to reign in their spending.
The current CEO suggests external funding is 'just around the corner' - we've been told that one before. Living on hope is no way to manage the last of reserves.
Where are statements of Income and Expenses for the current 8-9 months of trading since the announced financial crisis in Also Foundation? Indeed no meetings have been called of Also Foundation, the body in crisis, to allow examination of the situation - Why Not?
Surely if it was your own money you would be most unlikely to follow such a risky path without details and controls on what was to happen?
Perhaps, in order to mainting their spending, Also Foundation Directors will stump up their own financial guarantees - once they squeeze every last drop from Also Care? I think not..
Their latest action is a last deperate attempt to stave off the probability of descending into administration or worse.
AlsoCare Members BY VOTING NO on April 20th can then set about a realistic return to the true objectives of their organisation.
Geoff Richards - Past & Initial formation, Committe Member of AlsoCare.
B.Comm. CPA (retrd)