Society Finance & Investment Policy

1. Society Finance & Investment Policy Tony Fragnito, CFO and Acting COO

2. Agenda • The ISA Family • Roles and Responsibilities of Volunteer Leaders • Roles of Finance and Investment Committees • Financial Reports • ISA Budget Planning Process • ISA Reserves & Investment Strategy

3. The ISA Family

4. Society Finance ISA Leaders are stewards of the Society, including its financial resources

5. As a volunteer leader why is this important to me? • Knowing the mechanics and process of financial management in the organization provides leaders the opportunity to make better, more informed, decisions • Understanding the resources of ISA allows a more meaningful dialog on the historical and projected resources available to address our strategic and operational objectives

6. Volunteer and Staff Responsibilities • The Executive Board, with volunteer and staff support, develop the strategic goals for the Society • Staff and committees propose budgets to meets the strategic and operational objectives - within the MOP guidelines • Volunteers review and approve an operating and capital budget annually • Staff are tasked to manage and report on Society activities within approved budget parameters • Volunteers and staff monitor, and modify when appropriate, activities to stay within budget

8. Districts and Sections Department Boards and Divisions Staff Executive Board Society Committees and Task Forces Finance/Investment Committees Society Governance Organization No Silos!

9. Departments and Divisions Automation and Technology Department • Analysis Division  • Automatic Controls and Robotics Division • Communications Division • Management Division • Process Measurement and Control Division • Safety and Security Division • Test Measurement Division

10. Departments and Divisions Industries and Sciences Department • Aerospace Industries Division • Building Automation Systems Division • Chemical & Petroleum Industries Division • Construction & Design Division • Education Division • Food & Pharmaceutical Industries Division • Mining & Metals Industries Division • Power Industry Division • Pulp & Paper Industry Division • Water & Wastewater Industries Division

11. Departments and Divisions Departments – Committees within ISA Divisions - ISA Divisions are an internal unit of ISA organized around a common technical or industry interest Neither Departments nor Divisions are separate legal entities Operate at the will of Department Activity Board and the ISA Executive Board under the guidelines of the Bylaws and the ISA MOP

12. Districts and Sections Districts – a grouping of ISA Sections Sections are ISA chartered bodies based on developed rules given certain rights within a geographic area Sections are separate legal entities governed by respective local laws, but operating consistent with ISA Bylaws Sections

13. Society Finance Structure Staff Organization Finance & Administration Department • CFO/COO • Controller • Senior Accountant • Accounting Clerk Volunteer Leadership Finance Committee • Investment Committee

14. Volunteer Financial Leaders

15. Finance Committee A list of the current Finance Committee Members can be found at: https://www.isa.org/governance/finance-committee/

16. Investment Committee A list of the current Investment Committee Members can be found at: https://www.isa.org/governance/investment-committee/

17. Society Reserves • Building reserves to secure ISA’s financial future has always been an objective of the Society • History • Established in 1976 • Purpose • To weather unforeseen/unexpected financial challenges – “the rainy day fund” • Use dividend and interest to help fund operations for unexpected deficit results • To take advantage of growth opportunities – new acquisitions, new products and services (New Ventures Investments) • To ensure the financial future of ISA

18. Financial Reports On demand • ISA reports • Dashboard(s) • Data Analyzer Monthly • Activity Statements – internal • Statement of Activities - several different views, with notes • Balance Sheet – assets and liabilities

19. Financial Reports – Operations & Non-Operating Summary Last YTD Current YTD Budgets and Variances Operating Non-Operating

20. Financial Reports – Page 2Operations Statement of Activities Year Budget & Variance Month Year to Date Revenue Expense

21. Financial Reports – Page 3Operations Summary ISA Activity Centers

22. Financial Reports – Balance Sheet Page 5 of the Financial Reports is our Balance Sheet. The Balance Sheet is often described as a snapshot of a company's financial condition at a moment in time. We compare this “snap shot” to the same period during the previous year and the beginning of the year. The balance sheet has three categories: Assets, Liabilities and Net Assets. The categories of assets are usually listed in order of liquidity. Assets are followed by the liabilities. The difference between the assets and the liabilities is known as the net assets or the net worth of ISA. Net worth must equal assets minus liabilities.

23. Annual Planning & Budget Cycle Vision, Mission and Purpose Society Strategic Plan Operating Plans Society Draft Budget Budget Review Budget Approval

24. Annual Planning & Budget Cycle

25. Annual Planning & Budget Cycle

26. Questions Tony Fragnito 919. 990.9438 tfragnito@isa.org