Authored by: Phil Chadwick
Published on: May 30, 2013
Predicting our finances every year always used to be a bit of a gamble. Our Society and Meeting budgets were interleaved and we had strongly variable incomes and annual liabilities totaling almost half a million dollars, over which we had limited control and probably not enough appreciation of risk. In fact our Society has had a strategy for the finances for some years (it is outlined in the 2005 Long Range Plan). This is simply to try to balance the books without relying on meeting income, and use any meeting surplus either for reserves or to “ring fence” it for Society development. My aim as Treasurer was to get us to that position, and now we are there - and we really needed to be. Because our meetings are now run jointly with EBEA, and because we are now (rightly in my view) focusing more on supporting students and early career researchers, we are unlikely to be able to rely on large surpluses from the annual meeting in the future. If we do get any meeting profit, that will be a bonus, but we cannot rely on it.
The figures below are extracted from the Annual Financial Review undertaken recently by our accountants. The headline figures for 2012-13, along with the 2013-14 projections are (in thousands of US dollars):
|Journal profit share||74.8||74|
|Bank charges etc||3||2|
|Voting & Elections||2||2|
This year's surplus is due largely to the profit from the Brisbane meeting, and a reduced management fee because our contract with the Lawson Health Research Institute to provide and maintain web-based management systems for our Society started last July 2012, so we only paid for 9 months service in 2012. In 2013, of course, we will pay for a full year and our income will be reduced a little because we have chosen to reduce membership fees.
The Brisbane meeting showed a surplus of $23k, rather more than we had been hoping and an excellent outcome. Any surpluses we do get from meetings can be used for development (see “reserves” below), although one idea I would like to explore is the idea of setting up a separate account that any meeting surpluses can be paid into to provide seed funding for future meetings. That does need some consideration though, because of course it would need to be run and accessed jointly with EBEA.
Better understanding and control of our finances in the last two years, and the removal of those big potential liabilities associated with front-end funding meetings, has allowed us to consolidate our accounts. This left us with a great deal of money in our current (checking) account, some of which I have transferred to two new short-term cash deposit accounts held with Merrill Lynch. This is the first transfer to reserves in over a decade, and leaves enough money in the current (checking) account to pay for Society operations at least until the 2014 membership monies start to arrive.
|Our reserves now total (in thousands of US dollars):|
|Endowment (stock market):|
|Long term reserves||259.4|
|Short term reserves||35.0|
The "operating funds" and "short term reserves" are intended to be easy-access and provide money we can use for specific development purposes without having to hit our main reserves. The establishment of ring-fenced reserves for development is also a long-term strategic goal of the Society, as laid out in the Long Range Plan of 2005. The challenge now will be to establish strategies for spending the money wisely.
Getting BEMS to a long-term stable financial position has required a lot of work, and some difficult decisions to be taken by Officers and Board Members. We are still in a state of transition to new working arrangements, and whilst we now have robust and effective management systems in place for the Society and for our Meetings we do need to re-invigorate our democratic oversight - our Board. There are currently proposals to change the structure of the Board and to make it smaller, proposed by the Board itself, and I would urge you to support these as the last stage in our restructure.
As I write this I am entering the final weeks of my term as Treasurer. I would like to really thank you, the members of our Society, for all your support in the last few years. That support has been the key to the successful transition to our new ways of working. Our new Treasurer, Andrew Wood, is very experienced in financial matters and has been spending time familiarising himself with the BEMS systems, and above all he is very dedicated. I am confident he'll do a great job. I must say, it is going to be nice to let someone else worry about the money stuff!