Member Update: Governance, Financials and an Invitation to a Special Briefing Session
May 15, 2014
Dear AWA Members:
As we come to the close of our fiscal year 2013-2014, and following the preparation of the AWA’s 2014-2015 budget (subject to member approval at the 30 May General Meeting), we are pleased to share a number of important governance actions and financial decisions that have been taken that ensure the financial well-being and future of our organization. And while members who joined us at the April AGM will be familiar with reserve discussion below, we wanted to ensure all members are equally updated.
The additional cash AWA gained from the sale of the Monticello Property and after the purchase of our new offices in the Arion Commercial Centre enabled us to put in place several policies that ensure the long-term viability of our non-profit organization and new facility. Specifically, the Board approved by majority vote – and members were informed at April 16, 2014 Annual General Meeting – the structure and funding of an Operating Reserve of HK$1.08 million and a Property, Maintenance and Technology Reserve of HK$4.75 million. The Operating Reserve provides a cushion against unexpected events, losses of income and/or large unbudgeted expenses. The Property, Maintenance and Technology reserve allows AWA to accrue funds for the long-term maintenance of our office and operations. For more details about the purpose and construction of the reserve accounts and considerations and calculations associated thereto, please click the link below to review the reserve accounts document.
It’s important for members to understand that the excess funds following the property sale – and thus the ability to fund the reserve accounts – wasn’t the only consideration as the Board contemplates and plans for the future of AWA. The current financial position of our organization and the opportunity to implement a more formal financial structure were also important points of debate and discussion.
This year we have focused on improving processes, policies, governance and transparency. As a Board we collaborate across a shared platform, an improved structure that will help future boards understand past activities, and at the start of the 2013-2014 year, each Board member set forth objectives for their term. Under Irene Chu’s stewardship as Treasurer, the budget preparation process was also improved, as was the in-depth understanding by each Board member of the financial position of our organization.
Members should be aware that during the 2013-2014 year, AWA did not meet budget objectives. As a Board, we have reviewed many options and taken a number of actions during the year and in preparing the next year’s budget, we want members to be aware of our considerations as we strive to put the organization on sound financial footing going forward:
• Membership continues to decline. In FY2013-14 membership is down 10% compared to FY2012-13;
• Several members were appointed to serve as Advertising Manager, however due to frequent turnover, we have not been able to reverse the decline in advertising revenue in our flagship magazine, AWAre;
• With a full year of new office operating expenses, we now have a clearer picture (versus estimated) of actual costs for our beautiful new facility; and
• We have estimated and allocated direct expenses associated with fundraising to reflect office staff time and costs associated with these efforts. Next year staff will track time associated with various AWA activities and these time tracking efforts will enable the use of actual direct costs when preparing the 2015-2016 budget.
It is our fiduciary responsibility that AWA remains financially sustainable and fulfill our mission to serve members and the local community. The AWA Board continues to address membership and AWAre advertising aggressively and for 2014-2015 we have approved a budget with the lowest possible projected operating losses. In doing so, we made conservative assumptions and cost allocation decisions.
Because of the level of detail about the various scenarios considered and approved by the Board on 30 April, we plan to host an information session for members to present the 2014-2015 budget and answer your questions. This informational session will be held in advance of the Annual Meeting on 30 May on Tuesday 20 May 2014 from 1-3pm at the AWA office.
We hope this communication is helpful and look forward to seeing you at the Awards Tea and Annual Meeting on 30 May 2014.
AWA Board 2013-2014