Treasurer s Report to the 2017 General Assembly April 2017

Transcription

1 Treasurer s Report to the 2017 General Assembly April 2017 Sharon Bailey ww.earma.org

2 TABLE OF CONTENTS 2016 Financial outturn... 3 Income... 3 Expenditure... 4 Variance Analysis Actual versus Budget... 5 Other Financial matters... 5 VAT... 5 Appointment of Professional Accountants and Statutory External Auditors... 5 Future Financial Planning... 6 Membership Subscription fees... 6 Budget Appendix 1: Income & Expenditure Account 2015 & Appendix 2: Analysis of Travel & Subsistence Expenditure Appendix 3: Income & Expenditure 2016 Actual Versus Budget Appendix 4: Summary Conference Income & Expenditure Appendix 5: Budget Appendix 6: Financial Statements as at 31 st December 2016 as Prepared by SBB Appendix 7: External Auditors Report for 2016 Prepared by BB Sharon Bailey, April 2017 Page 2

3 2016 FINANCIAL OUTTURN EARMA recorded a surplus of 22,282 for the 2016 financial year (2015: 12,882). At the end of the year, the accumulated surplus amounted to 267,134. In accordance with best accounting practice the accounts were prepared on an accruals basis with every effort made to capture all relevant income and expenditure within the financial year. The Income and Expenditure Account (I&E) for both 2016 & the prior year are shown at Appendix 1. The I&E for 2016 is also compared to the budget for that year at Appendix 3. The financial statements as prepared by SBB are included at Appendix 6. The auditor s report as prepared by BB3 is attached at Appendix 7. INCOME Income % 6% 13% 21% 60% Membership Fee income Conference Receipts Sponsorship Other income Workshops The income sources were the annual conference, membership fees, sponsorship of EARMA, workshops, professional development programme fees and other small amount e.g. advertising. Membership fee income rose to 110,414, a 1% increase from 2015 ( 109,783), which was mainly driven by an increase in Institutional members. Membership numbers for the last ten years are shown in the table below. The 2016 membership fee, which remained unchanged from the year before, was 180 & 790 for ordinary and institutional members respectively Inc.# Inc. % OM % IM % The Lulea conference resulted in a surplus of 24,696 (Leiden 2015: 35,246). Since 2015 the full income and expenditure in relation to the conference is shown as part of EARMA s trading activity (previously only the surplus was shown). A summary of the receipts and costs relating to the conference is included at appendix 4. In addition, 30,650 (2015: 24,700) was raised from sponsorship of EARMA. Sharon Bailey, April 2017 Page 3

4 EXPENDITURE Expenditure % 1% 0% 16% 8% 1% 9% 58% 4% 1% Audit & Accountancy Conference Fellowships Other Professional Services Publicity Rent Tax Travel & Hospitality Workshops & Events Expenditure for 2016 amounted to 501,637 (2015: 411,210). Conference: The largest category of expenditure was the annual conference which amounted to 289,264. Full details are included at Appendix 4. Travel & Hospitality: The second largest category of expenditure was Travel & Hospitality amounting to 78,630. Six face-to-face board meetings took place during the year (Brussels, Tarragona, Munich, Lulea, Dublin & Stockholm) this amounted to 26,557. The costs of travel to attend sister organisation conferences amounted to 17,879. EARMA held a strategy and planning discussing with the Board and active members in Tarragon in March 2016 this amounted to 13,564. An analysis of travel and hospitality, by recipient and purpose, is shown in the table at Appendix 2. ACC travel in respect of the conference is included under conference expenditure. External services (fees): The secretariat service was expanded to include the PDP administration and membership renewal in 2016 and amounted to 30,745 (2015: 15,107) in the year. Almanor were engaged to undertake a business review of our professional development programme ( 6,849) and a further 4,453 (2015: 3,862) was paid to Advantage ICO for managing the relationship with EARMA s sponsors. A further 3,000 was paid to Andersen, Toom & Poli as book sponsorship. Other Events and Workshops: EARMA offered workshops on finance, communications and leadership and also held a European Research Summit. The operating costs of these events amounted to 35,022. Accountancy & Audit: Professional bookkeeping and accountancy services and advice were provided by SBB and the External Audit was conducted by BB3. Seven fellowships / travel bursaries amounting to a total of 5,881 were supported during the year (recipients: CRC, Durasevic, Hegan, Boll, Arevalo, Rahner & Korgard). In addition, one Olaf took place (Glasgow - Porter). Sharon Bailey, April 2017 Page 4

5 VARIANCE ANALYSIS ACTUAL VERSUS BUDGET EARMA recorded a surplus of slightly more than 22K in 2016 compared to a breakeven budget 1, resulting in a positive variance. A full comparison of the I&E for 2016 to the budget for that year is shown at Appendix 3. The main variances are as follows: Membership income was 3K lower than expected due to ordinary members being lower than expected. Both conference income and expenditure were higher than expected and resulted in a positive variance of almost 8K. Both income and expenditure are under budget in relation to the professional development programme as a new cohort of the CRM did not commence during Sponsorship of EARMA was 6K greater than expected. There was an under-spend on fellowships and travel bursaries of 10K. Administration costs were higher than expected this is a result of the business analysis of the professional development offering at a cost of 7K in the year and a significant rebranding of EARMA s logo, flyers and templates at a cost of 6K. OTHER FINANCIAL MATTERS VAT EARMA registered for VAT in Belgium with an effective date of 1 st January Effectively this means that VAT is now charged on membership subscriptions. Precisely how this charge is applied to each member depends on their own or their organisation s tax status and country of residence. Belgium s current rate of vat for subscriptions is 21%. Each country sets their own VAT rate, which vary widely across the world and can change from year to year. All VAT collected by EARMA is paid directly to the relevant Tax Authorities. This does not result in any additional income for EARMA. However, EARMA is now able to reclaim VAT incurred on some of its expenditure which has resulted in a small reduction in some of its costs. EARMA is also obliged to register for VAT in other countries where it is carrying on trading activities. Accordingly, EARMA registered for VAT in The Netherlands (effective 01/01/15), Sweden (effective 01/01/16) and is registering in Malta (effective 01/01/17) to comply with VAT requirements in relation to the conferences and workshops taking place in those Countries. APPOINTMENT OF PROFESSIONAL ACCOUNTANTS AND STATUTORY EXTERNAL AUDITORS SBB Accountants Adviseurs were appointed as EARMA s accountant in During 2016, a new contract was agreed with them at an annual fee of 6, The 2016 proposed budget presented in Leiden was breakeven. In addition, a further 50,000 was approved to conduct a business analysis of the professional development offering to be renamed EARMA Academy. The costs of the review, amounting to 7K, are included within fees. Sharon Bailey, April 2017 Page 5

6 Their fee covers the periodic bookkeeping in accordance with Belgian Law, periodic management reporting, quarterly VAT returns and listings, closing the accounts, preparation of annual accounts, completing the tax return and normal assistance with the annual audit of the accounts by the external auditor and the internal auditors. The fee is annually adjustable in light of the services provided and for the index of prices. Further advice as required is invoiced separately. In September 2016, the Board decided to nominate BB3 Revisoren 2 as statutory auditors, for a period of 3 years up until the annual general meeting (general assembly) that approves the annual account of 31 December The annual fee was determined at EUR 1,750 (excluding VAT) a year and can be adjusted on a yearly base in function of the cost of living. The appointment of BB3 must be approved by the General Assembly and this note must be included in the minute of the GA. The fee includes the statutory audit of the annual accounts and a meeting with the internal auditors of EARMA. The Chairman signed a letter of representation for the year ended 31 st December 2016, to the External Auditors on behalf of EARMA. Since the last GA, the Treasurer, newly appointed Managing Director and Internal Auditors met with SBB in Leuven in March 2017 to review the draft financial accounts. All other interactions between the board and the Accountants and the External Auditors are remote via telephone or . There is a good working relationship between the Board and the professional Accountants. KPMG assisted EARMA with VAT registration in The Netherlands and following a recommendation from SBB, Witlox VCS were appointed to complete the periodic VAT returns there. Essentia assisted EARMA with VAT registration in Sweden & Malta and were also appointed to complete the periodic VAT returns in those Countries. FUTURE FINANCIAL PLANNING MEMBERSHIP SUBSCRIPTION FEES The membership fee remained unchanged at 180 & 790 for ordinary and institutional members respectively for many years up to and including EARMA offers a reduced fee to members on stage of life or hardship grounds (individual applications are confidentially reviewed by the Treasurer). Membership is on a calendar year basis, however new members joining after the conference are charged a pro-rata fee for the remainder of the calendar year. To enable realisation of EARMA s strategic plan (and in particular to enable the hiring of a fulltime Managing Director) the membership fee was increased by 15% in The new fees are as follows: Individual 210 and Institutional 910. These new fee rates will be maintained for at least three years with no further increase being considered before BB3 Revisoren conducted the external audit for 2016 but could not act as statutory auditor as that required approval at the GA. Sharon Bailey, April 2017 Page 6

7 BUDGET 2018 The budget for 2018 is proposed in the table on Page 8. In recognition of EARMA s increasing activities the budget has been analysed by activity stream. The aim of the budget is to increase membership benefits through the provision of an annual conference, professional development courses, networking, events, fellowship and bursary opportunities. This proposed budget projects a deficit in the year of 55K. This the second year that a deficit budget is presented to the GA for approval mainly due to the hiring of a Managing Director (MD) in This role is essential if EARMA is to develop to its next stage of maturity without solely relying on the generosity of its members, many of whom volunteer a lot of their personal time and expertise. I am personally delighted that Mr Nik Claesen commenced in the role of MD on 1 st March This role is critical if we wish to achieve our strategic goals and to provide more and better events and benefits to our members. Nik is responsible for growing our membership base and increasing the financial contribution from workshops, courses and events. It is expected that 2017, 2018 & 2019 will operate at a deficit on a decreasing basis (2017: 70K, 2018: 55K, 2019: 30K) and that EARMA should be back to a balanced budget by There is currently more than sufficient accumulated surplus to cover these deficits. The board set the following assumptions whilst framing the budget: Membership (number) is expected to grow by 15% in 2018 (member data as at 1 st March 2017 was used as the base number). Membership subscription fee rates will remain at the 2017 level (Institutional 910, Individual 210). General administration costs have increased to cover rent, insurance, phone, office supplies etc. which are necessary as we expand and implement EARMA s professional resources (e.g. Managing Director role). Sponsorship of EARMA is expected to yield 29,264 p.a. The annual conference is expected to operate at breakeven taking into account both direct and indirect costs and is based on 650 paying attendees. The full income and expense of the conference is shown (before 2016 only the surplus was brought in as an item of income). Fees for the professional development accredited courses will be set to operate the course so that it provides a small contribution towards EARMA s overhead costs. Fellowships, travel bursaries and Olaf s are set at 8,400 which would allow for approximately awards in the year. Other events and workshops are expected to operate at a small surplus. Fees include the Managing Director and the secretariat. Travel, which is one of the more significant items of expenditure, is estimated to include face to face board meetings, representation at sister organisation conferences, promotional trips by the Chairman & Managing Director, auditors meeting, and meetings of the board sub-committees as required. All travel claims are paid on a reimbursement basis in accordance with EARMA s travel protocol. Sharon Bailey, April 2017 Page 7

8 Budget 2018 by Activity Stream Total General Administration Sponsorship Annual Conference PDP Fellowships & Olafs Events Sub- Committees Income Membership 146, , Sponsorship 35,000-35, Annual Conference 443, , PDP 31, , Events 57, ,875 - Total income 714, ,440 35, ,300 31,960-57,875 - Expenditure Accountants Fees 7,025 7, Audit Fees 1,803 1, Bank Charges 14,889 2, , ,476 - Fellowships 8, ,500-5, Hosting / Catering 276,380 4, ,700 8,180-20,500 - Insurance 5,000 5, Office supplies, Stationery & Posta 6,510 6, Print / Design / Promotional 48,760 5,000-42, ,750 - Professional Event Organiser PCO 70,297-4,844 59, ,625 - Professional services 2,000 2, Programme Delivery 46, ,000 11,442-12,500 - Rent 10,000 10, Fees 126,114 25,223-21,811 37,834 12,611 12,611 16,023 Signage & Audio Visual 20, , Subscriptions 7,000 7, Sponsorship 6,000 6, Travel & Hospitality 107,090 62,690-20,000 6,000-8,400 10,000 Website & Data Storage 5,000 5, Total Expenditure 769, ,136 5, ,659 64,781 18,511 62,862 26,023 Net Surplus/ Deficit (55,134) (2,696) 29, (32,821) (18,511) (4,987) (26,023) For comparative purposed a table showing budget and proposed budget for 2018 is included at Appendix 5. Budgets prior to 2016 only showed the surplus on the conference, events and professional development programme. Since 2016 the full income and expenditure for all EARMA s activities is included within the budget. This is my fourth and final report to EARMA s General Assembly as Treasurer. I d like to take this opportunity to thank my colleagues on the Board and EARMA s Internal Auditors who have been a pleasure to work with. Kind Regards, Sharon Sharon Bailey 10 th April 2017 Sharon Bailey, April 2017 Page 8

9 APPENDIX 1: INCOME & EXPENDITURE ACCOUNT 2015 & Variance Income Analysis Actual Actual Actual Actual Membership Ordinary 37,428 35,263 Institutional 72, ,783 75, , Other Annual Conference Income 284, ,960 29,698 Bank Interest Sponsorship 24,700 30,650 5,950 Other (incl Workshop) 5,348 68,895 63,547 Total Income 424, ,919 99,827 Expenditure Office Cost Rent 5,000 5,000 Professional Support 33,144 45,798 Stationery & Subscriptions 3,091 41,235 12,198 62,997 21,761 Communication &Postage Postage, Stamps, Telephone & Broadband Publicity / Sponsorship 1,500 1,726 7,522 8,002 6,276 Travel & Hospitality Chair's Travel (Promotion) 1,567 1,469 Other Meetings (Sister Organisations) 8,202 17,879 Working Groups 5,509 9,061 Board Meetings 17,568 26,557 Other Purposes Travel 3,431 8,331 Auditors Travel 1,672 1,769 PD Programme Promotion & Delivery 12,348-50,297 65,066 Hospitality & Meeting Costs 1,925 - Focus Groups (Strategy &Working Groups) - 13,564 52,222 78,630 26,408 Training & Fellowships Training Courses _PDP 4,268 4,250 Fellowships / Travel Bursaries 5,023 5,881 Past Conferences - 9,290-10, Financial & Taxation Bank Charges 1,542 1,316 Tax Miscellaneous 847 2, ,609 (869) External services Web - - Printing & Design 272 6,830 Administration (Acc/Aud/Legal) 8,188 9,153 Other - 8,461-15,982 7,522 Conference & Events Conference 249, ,264 Other Events / workshops 46, ,798 35, ,286 28,488 Total Expenditure 411, ,637 90,427 Surplus / (Deficit) 12,882 22,282 9,400 Sharon Bailey, April 2017 Page 9

10 APPENDIX 2: ANALYSIS OF TRAVEL & SUBSISTENCE EXPENDITURE 2016 Row Labels Board Meeting Internal Audit Strategy Event MD Interviews PD_WG GD_WG Sister Ass. Conf/ Event / Promotion Chairmans Travel Grand Total Andersen 2, ,399 6,236 Bailey 4, ,740 Behrendt 1,221 1,221 Donovan 4, ,503 1,469 11,322 Lauder Lythgoe 4, ,830 2,403 10,591 Matskevich Poli 2, ,103 4,411 Ravagni Svenningsen Toom 544 2,437 2,981 Werenskiold 1, ,011 2,909 McGuigan Lie ,485 Babatunde Hegen Novotel Tour Noire 1,655 1,655 Lux Bus SB Cuitat hotel & Lux bus 3,601 3,601 Gritsai Hansson Edalat Hemskerk Vidal Van Griethuysen 610 1,931 2,541 Presidents Husa Keller 2,677 2,677 Orebro Claesen ,050 Rosander ,438 O'Shea Brannvall Talbot Hotel 1,953 1,953 Bonnici Grup Soteras Blohm Savio Massaneda Van Iwaarden Dhalman Sihvonen 1,377 1,377 Grand Total 26,557 1,769 13,564 3,146 7,822 1,239 17,879 1,469 73,445 Sharon Bailey, April 2017 Page 10

11 APPENDIX 3: INCOME & EXPENDITURE 2016 ACTUAL VERSUS BUDGET Variance Income Analysis Actual Actual Budget Budget Membership Ordinary 35,263 33,300 Institutional 75, ,414 79, ,090 (2,676) Other Annual Conference Income 313, ,000 26,960 Bank Interest Sponsorship 30,650 25,000 5,650 Other (incl Workshop) 68, ,000 (57,105) Total Income 523, ,090 (27,171) Expenditure Office Cost Rent 5,000 5,150 Professional Support 45,798 40,166 Stationery & Subscriptions 12,198 62,997 2,000 47,316 (15,681) Communication &Postage Postage, Stamps, Telephone & Broadband 480 1,000 Publicity / Sponsorship 7,522 8,002 6,000 7,000 (1,002) Travel & Hospitality Chair's Travel (Promotion) 1,469 6,700 Other Meetings (Sister Organisations) 17,879 11,900 Working Groups 9,061 16,000 Board Meetings 26,557 26,880 Other Purposes Travel 8,331 - Auditors Travel 1,769 2,520 PD Programme Promotion & Delivery ,066 64,000 Hospitality & Meeting Costs - 1,000 Focus Groups (Strategy &Working Groups) 13,564 9,800 78,630 74,800 (3,830) Training & Fellowships Training Courses _PDP 4,250 65,631 Fellowships / Travel Bursaries 5,881 16,000 Past Conferences - 10,131-81,631 71,500 Financial & Taxation Bank Charges 1,316 2,534 Tax Miscellaneous 381 1,609-2, External services Web - 5,000 Printing & Design 6,830 8,000 Administration (Acc/Aud/Legal) 9,153 8,474 Other - 15,982-21,474 5,492 Conference & Events Conference 289, ,218 Other Events / workshops 35, ,286 47, ,473 (6,813) Total Expenditure 501, ,228 50,591 Surplus / (Deficit) 22,282 (1,138) 23,420 Sharon Bailey, April 2017 Page 11

12 APPENDIX 4: SUMMARY CONFERENCE INCOME & EXPENDITURE Summary Financial Data - Conference Lulea Leiden Tallinn Vienna Income Registration fees collected 282, , , ,800 Local Contribution 31, , , , ,800 Expenditure ACC Planning meetings 8, Badges 768 1,500 3, Bank charges & credit card costs 9,463 4,745 3,980 3,020 Buses to dinner - - 1,411 - Catering 49,219 77,040 66,378 67,853 Conference bags 2,517 5,210 5, Website & Abstract Tools 11,902 5,913 3,495 5,544 Entertainment (dinner & opening ceremony) - 7,550 12,640 4,065 Flowers Gifts Speakers and Chairs - - 1,594 1,088 Insurance International dinner - 2,037 1,068 - Mailing to participants - - 2, Manpower (incl in LTU contribution) - 25,767 10,991 2,099 Marketing, comms, signage etc 2, Miscellaneous - 19, Notepads, pens etc - 3,750 5,760 - PCO Travel & Site Visits 10, Photographer - - 1,044 - Printing Materials 14,576-1,591 9,792 Programming - 9,218 11,160 1,344 Project Management (PCO) 26,497 21,800 - Registrations 25,965 11,217 2,385 10,920 Sound Engineering at conference - 6,116 5,032 2,170 Speaker fees and travel 8,500 - Trade Stands Transport of materials (inc. postal) VAT registration and compliance 3,000 5,562 Venue Hire 115,008 41,473-40,568 Workshop Materials - - 1,041 - Total Costs 289, , , ,109 Surplus 24,696 35, ,040 56,691 Sharon Bailey, April 2017 Page 12

13 APPENDIX 5: BUDGET '000 '000 '000 '000 '000 '000 Budget Budget Budget Budget Budget Proposed Budget Income Member Subscriptions Conference (*) Sponsorship Training Courses /PDP (*) Events (*) Total Income Expenditure Accountancy & Audit Administration, book-keeping & legal Bank charges Event Organiser Fellowships / Bursaries Hosting & catering Insurance Office supplies, stationery and postage PD Administrator Publicity (Printing & Design) Rent Secretariate / Payroll costs Signage & Audiovisual Strategy / Miscellaneous Sponsorship Subscriptions Training courses / PDP Delivery Travel & hospitality (**) Website & Data storage Total Expenditure (**) Includes meetings & focus groups Surplus / (Deficit) (1) (70) (55) (*) In prior years only the surplus on the conferences, training courses and events were shown in EARMA s accounts. Since 2016 the budget has been prepared to show the full income and expenditure of these activities. Sharon Bailey, April 2017 Page 13

14 APPENDIX 6: FINANCIAL STATEMENTS AS AT 31 ST DECEMBER 2016 AS PREPARED BY SBB Sharon Bailey, April 2017 Page 14

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20 APPENDIX 7: EXTERNAL AUDITORS REPORT FOR 2016 PREPARED BY BB3 Sharon Bailey, April 2017 Page 20

21 AUDITOR S REPORT TO THE GENERAL MEETING OF THE EUROPEAN ASSOCIATION OF RESEARCH MANAGERS AND ADMINISTRATORS (EARMA) FOR THE YEAR ENDED 31 DECEMBER 2016 As required by law and the company s by-laws, we report to you in the context of our auditor s mandate. This report includes our opinion on the balance sheet as at 31 December 2016, the income statement for the year then ended, and on the disclosures, as well as the required additional statements. Report on the annual accounts Unqualified opinion We have audited the annual accounts of the European Association of Research Managers and Administrators (EARMA) for the year ended 31 December 2016, which show a balance sheet total of ,17 and a profit for the year of ,81. Responsibility of the board of Directors for the preparation of the annual accounts The board of Directors is responsible for the preparation of annual accounts that give a true and fair view in accordance with the financial-reporting framework applicable in Belgium, and for such internal control as the board of Directors determines is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error. Responsibility of the auditor Our responsibility is to express an opinion on these annual accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISAs) as adopted in Belgium. Those standards require that we comply with the ethical requirements and plan and perform the control to obtain reasonable assurance about whether the annual accounts are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the annual accounts, whether due to fraud or error. In making those risk assessments, the auditor considers the association s internal control relevant to the preparation of annual accounts that give a true and fair view, in order to design control procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of valuation rules used and the reasonableness of accounting estimates made by board of Directors, as well as evaluating the overall presentation of the annual accounts. We have obtained from board of Directors and association officials the explanations and information necessary for our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Unqualified opinion In our opinion, the annual accounts of the European Association of Research Managers and Administrators (EARMA) give a true and fair view of the association s equity and financial position as at 31 December 2016, and of the results of its operations for the year then ended, in accordance with the financial-reporting framework applicable in Belgium. Report on other legal and regulatory requirements The board of Directors is responsible for the compliance with the law of 27 June 1921 on non-profit organisations, international non-profit organisations and foundations, with the by-laws and with the legal and regulatory requirements regarding bookkeeping.

22 In the context of our mandate and in accordance with the Belgian standard which is complementary to the International Standards on Auditing (ISAs) as applicable in Belgium, our responsibility is to verify, in all material respects, compliance with certain legal and regulatory requirements. On this basis, we make the following additional statements, which do not modify the scope of our opinion on the annual accounts: - Without prejudice to certain formal aspects of minor importance, the accounting records are maintained in accordance with the legal and regulatory requirements applicable in Belgium. - There are no transactions undertaken or decisions taken in breach of the by-laws or of the Law of 27 June 1921 on non-profit organisations, international non-profit organisations and foundations that we have to report to you. Herent, 03 April 2017 «BB3 Audit» Burg. Venn. o.v.v.e. BVBA Auditor represented by Jeroen RANS

23 DOCUMENT TITLE {date} Rue Joseph II, B-1000 Brussels Belgium Copyright 2016 EARMA. All rights reserved. 5