Doug PollardAnalysis of ALSO Finances
This analysis was posted on discussion groups this morning: I think it is important that it is read as widely as possible. Please share.
Doug Pollard
Former ALSO treasurer and board member David Owen LL.B, SA Fin, Senior Associate member of the Financial Services Institute of Australia, solicitor of the Supreme Court of Victoria & Director of Owenlaw Trust Limited, looks at ALSOs books.
Looking back over the last three years of audited Also Care / ALSO Foundation accounts there is an alarming trend to move from a combined profit in 2008 to substantial losses since 2009.
Combined Profit / loss of both Also Care & ALSO Foundation has been:
2008 - $51,587 profit;
2009 - ($289,586) LOSS;
2010 - ($240,453) LOSS
2011 - ($240,453) LOSS (period to 18 April 2011 only).
Similarity combined Equity has been reduced by these losses:
2008 - $1,147,939;
2009 - $858,353;
2010 - $617,605;
2011 - $374,442 (as at 18 April 2011).
At least $233,409.67 misappropriated
Since 30 June 2010 the Committee of Also Care have misappropriated, that is withdrawn in contravention to a members resolution, at least $233,409.67* over the last ten months. This is not something that happened many years ago. It is an average of $23,000 per month over the last ten months.
(*Members Resolution Fund at 30 June 2011 $591,337 interest on investment account $24,019.07 = $615,356.07 less at 18 April 2011 investment account balance $347,000 cash at bank $10,944.02 & fixed term bank deposits of $24,002.38 = $381,946.40).
The proposal put to members by the Also Care committee was to release $500,000 from the Members Resolution Fund, despite the fact that this account had been reduced without authority to approx $350,000. The stated purpose was to employ an additional 1.5 staff members.
If that proposal had passed I believe Also Care & ALSO Foundation would have run out of money by Christmas.
What could be done?
First you need to establish what funds are left. Also Care had at 18 April 2011 $381,946 - see above. But it also had current liabilities at 18 April 2011 of $69,934. If the motor car hire purchase liability is deleted on the basis that the motor car asset has a similar value then adjusted current liabilities are $33,109. Taking this from cash left of $381,946 gives $348,837 net cash left.
If Also Care planned on trading for three further years then it has $116,000 per annum. What could you do with $116,000 per annum.
The Also office cost in 2010 about $72,000gross (rent, other premises costs, office costs & equipment rent). Against this expense it received $25,000 in rent from tenants. A net cost of $47,000. It should be retained as it provides a valued community centre.
Allow $60,000 for part time staff & you will have $9,000 left for insurance, accounting & audit.
That is probably all that Also Care could afford.
Perhaps money could be saved if its old space at VAC was available at a cheaper cost.
The existing Op shop has never made a profit. It should be closed and the premises sub let. It lost in 2010 $37,685 and is budgeted to lose in 2011 $30,350.
Committee should stand down
I believe that members with business & financial knowledge need to be appointed or elected to the Committee of Also Care. The existing committee members have stood by while $233,409.67 has been misappropriated over the last ten months. They need to step aside.
Interview
An interview with David owen is available for download here Really Long Link
David Ormond Owen LL.B, SA Fin, Senior Associate member of the Financial Services Institute of Australia, solicitor of the Supreme Court of Victoria since 1971. Director of Owenlaw Trust Limited since 1975.
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