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CPMT Treasurer’s Report 10 November 2001

CPMT Treasurer’s Report 10 November 2001. 2001 Year to Date Financial Results Year 2002 Budget Year 2003 Budget Planning IEEE Financial Issues. 2001 YTD Financial Results. See separate spreadsheet of actuals vs. budget Overall YTD surplus is $144K, vs. $89K budget

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CPMT Treasurer’s Report 10 November 2001

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  1. CPMT Treasurer’s Report10 November 2001 2001 Year to Date Financial Results Year 2002 Budget Year 2003 Budget Planning IEEE Financial Issues

  2. 2001 YTD Financial Results See separate spreadsheet of actuals vs. budget • Overall YTD surplus is $144K, vs. $89K budget • Packaging Fellowship expenditures YTD = 0 • Transactions YTD net is $344K (19%) below budget • Conferences YTD net is $45K (40%) below budget • Delayed hiring of Admin. Assistant has saved $37K • Many Committees are spending less than budget

  3. 2001 YTD Financial Results (2) Proforma 2001 Budget YTD BudgetYTD ActualYTD Variance Transactions Revenue $718.7K $637.0K $543.3K <$ 93.7K> Transactions Expense 319.6K 204.8K 198.3K < 6.5K> Transactions Net $399.1K $432.2K $345.0K <$ 87.2K> Conferences Revenue1 $735.0K $551.7K $540.4K <$ 11.3K> Conferences Expense 507.0K 477.0K 495.4K 17.4K Conferences Net $228.0K $ 74.7K $ 45.0K <$ 29.7K> 1Conferences Book Broker Program revenue (~$140K in 2001) is credited at year end Both Publications and Conferences may net somewhat under budget this year.

  4. 2001 YTD Financial Results (3) 2001 Budget YTD BudgetYTD ActualYTD Variance “Underspending” Committees and Initiatives Expense Budgets: President’s Office 18.0K 13.5K 1.2K 11.3K (84%) ADCOM Travel 56.0K 32.4K 13.9K 18.5K (57%) Chapter Comm. 60.0K 45.0K 7.4K 37.6K (84%) Distngsed Lecturer 20.0K 15.0K 5.0K 10.0K (67%) Technical Comm. 22.0K 16.2K 0.3K 15.9K (98%) Membership Comm 17.4K 12.6K 0.4K 12.2K (97%) Field Award Expense 9.0K 7.2K 0 7.2K (100%) Graduate Fellowships 40.0K 30.0K 0 30.0K (100%) Web Short Course 30.0K 22.5K 0 22.5K (100%) Nanotechnology Council 0 0 7.0K < 7.0K (100%)> • The grim IEEE fiscal situation favors underspending. • The yearly budget is our operating plan for the year. • Underspending usually means underperforming.

  5. 2001 YTD Financial Results Summary • YTD income from Transactions and Conferences is down somewhat, but not a catastrophe • Making Transactions page counts heavily affects revenue • However, Conferences income for the remainder of this year and in 2002 is in serious question • No Committees are overspent YTD • Several committees and projects are underspending

  6. 2001 YTD Financial ResultsAdditional Information • Sept. YTD Investment Fund return <11.48%> • vs. <14.27%> for strategic asset allocation index • To be accounted this year, 2001 expenses need to be to Marsha by mid-December.

  7. 2002 CPMT Budget • See separate spreadsheet • $1.44M budget; $176.50K operating surplus • Includes part time administrator at IEEE • Funds Marketing, Education, Awards initiatives • Does not include interest or investment earnings • Not including potential “hit” from IEEE Infrastructure and Institute-level deficits

  8. CPMT 2002 Initiatives • Part-time administrator at IEEE $ 30K • Marketing Program Implementation + $ 73K • New curriculum development faculty grant $ 33K • New award and increased award stipends $ 13K $149K

  9. CPMT 2002 Budget Concerns • Current economic downturn and company austerity measures may significantly reduce Publications and Conferences net income. • There will be less company support of BoG Travel • Ongoing IEEE Infrastructure deficits must be covered; allocation to CPMT may be up to $500K

  10. Year 2003 Budget Planning • February 2002 BoG Meeting: • Approve all proposed 2003 initiatives • Approve input parameters: fees, page counts, etc. • Submit all requests for 2003 budget • CPMT Finance Committee will draft a budget • First pass budget due to IEEE early May • CPMT BoG Ballot in April • Second pass (“Final”) budget due early August • CPMT BoG Ballot in July

  11. IEEE Financial Issues • Infrastructure/Institute-level deficits continue and must be paid by those able to pay • Allocation method has been somewhat changed • In the past was totally in proportion to reserves • Proposed: Withhold first 6% of investment returns Withhold 40% of IP net revenue (ASPP, BB) Eliminate TAB’s allotment of IEEE Dues Charge users for “Direct” core infrastructure “Indirect” Infrastructure spread across IEEE • Deficit reductions are being effected

  12. IEEE Financial Issues - 2 • Merrill Palmer participates in TAB Finance Committee Task Force on how to allocate TAB’s Infrastructure “bill” among Societies • “Blended method” uses IP + reserves • “Principles method” aligns expense categories with relevant Society characteristics • “Simplified method” reduces Principles Method complexity • But the real problem is the Deficit to be allocated. The real solution is to make the Deficit go away.

  13. TAB’s INFRASTRUCTURE EXPENSES 2002 Budget ($000), as of 9/18 using Findlay Model Elimination of Membership Dues $1,677.0 IP Tax $4,331.9 Investment Returns on Reserves See Note Below [ = $5,419.8] Additional Allocations: Controllers $1,564.0 Payroll $184.1 Human Resources $853.2 Business Administration $506.9 Member Services $3,204.2 Application Processing $605.6 Procurement $426.4 IT – Common $896.5 IT – Membership $3,210.4 IT – Financial $1,469.6 Sub Total $12,920.9 Less: Current Allocations $3,832.8 Additional Allocations $9,088.1 TOTAL $15,097.0 Findlay Model withholds first 6% of Investment Returns to Corporate Expenses. OUs with Reserves collect portion of Returns for amounts above 6% threshold. The 2002 Budget assumes Investment Return will be 6%. + there is TAB Support, $1,924.5 Grand Total S/C 2002 Overhead Bill: $26,274.1

  14. TAB INFRASTRUCTURE DISTRIBUTION METHODOLOGY COMPARISON BLENDEDPRINCIPLESSIMPLIFIED Elimination of Membership Dues Pkg Products Membership Reserves/Members/Use IP Tax / Sharing Pkg Products Pkg Products Pkg Products Pkg Products Investment Returns on Reserves Reserves Reserves Reserves Additional Allocations: Controllers Reserves Use* Reserves/Members/Use Payroll Reserves Headcount** Headcount** Human Resources Reserves Headcount** Headcount** Business Administration Reserves Use* Reserves/Members/Use Member Services Reserves Membership Reserves/Members/Use Application Processing Reserves Membership Reserves/Members/Use Procurement Reserves Use* Reserves/Members/Use IT – Common Reserves Headcount** Headcount** IT – Membership Reserves Membership Reserves/Members/Use IT – Financial Reserves Use* Reserves/Members/Use TAB Support Pkg Products Use* Reserves/Members/Use * ”Use” is Measured by Expenses; exempting Conference Expenses ** TAB Staff Headcount added to Expenses; Executive Directors to Respective S/C CPMT Allocation $480.1K $272.5K $339.3K w/o Investment Returns or TAB Support

  15. Deficit Reduction Prospect • Reported at 10/17/01 IEEE EXCOM Meeting: • 2002 Expenses have been reduced $5.5M since July • July budgets did not include interest and dividend income of $4.6M • Revised “Budget Reserve Spending”: $1.7M • After withholding return or reserves and 40% of IP net, plus eliminating IEEE dues to TAB • I think to solve the problem once and for all there needs to be a New Financial Model plus activity-based accounting

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