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Family RVing Magazine

The Finance Committee

July 1, 2008

By Doug Key, F72824, National Treasurer
June 2008

FMCA’s Finance Committee has a broad level of responsibilities. Committee members need to have a firm understanding of FMCA’s financial affairs, serve as a board of review for budgets and salaries proposed by the executive director, recommend investment consultant(s) and review investment performance, and serve on the Audit Committee.

The committee members are Bruce Battey, F284722, Rocky Mountain Area; John Elliott, F197496, Midwest Area; and Robb Steinheider, F200844, Western Area. In addition, FMCA president Connie Pool serves as an ex officio member. As national treasurer, I serve as committee chairman for the Finance Committee as well as for the Audit Committee. With the education and background each committee member has, they are very well-suited for their responsibilities. Their commitment and dedication to fulfill the responsibilities of this committee should be appreciated by all FMCA members.

The committee meets formally twice a year, generally in May and November. The May meeting is focused primarily on the FMCA budget for the following year. In addition to those meetings, members communicate frequently with each other throughout the year. For the six weeks prior to the November 2007 meeting, for example, the committee exchanged more than 150 different e-mails and had several telephone conferences covering many of the topics to be discussed at that meeting.

The committee’s final report to the Executive Board this past November contained 11 recommendations. Nine were approved by the board, one was not approved, and one was referred back to the committee. Two of the approved recommendations concerned FMCA’s investments. Based upon the board’s approval, FMCA’s equity investments were transferred to exchange-traded funds, the use of such funds having been approved by the Governing Board in August 2007.

Other approved recommendations included the following:

A recommendation for FMCA to implement the “Budget Guidelines for 2009 and Out Years.”

Implementation of a financial reporting system that would be placed quarterly on FMCA’s Web site for Governing Board use, with financial statements at the same level of detail that the Executive Board receives.

Quarterly mailings to the Governing Board and chapter presidents of a two-page summarized financial report, in a format similar to the annual audit report, which would contain information for both FMCA and Family Motor Coaching Inc., and combined totals.

Formalization of a short-term cash management program that would enhance returns on funds pending their utilization for operating purposes.

The remaining approved recommendations were primarily minor “housekeeping” changes to a few policies and procedures.

One of the Finance Committee’s most challenging and time-consuming tasks is reviewing the annual budget, which is submitted by the executive director. This process is made more difficult because of the requirement to get the budget before the Governing Board for its vote, which occurs during the summer convention. This means that at the time the budget is prepared and reviewed, we will know only three months of current-year financial and industry trend data. A lot can happen in the remaining nine months that could significantly impact the next year’s budget.

Of particular concern is advertising revenue, FMCA’s largest and most profitable revenue area, and also one over which the association has little control. Illustrative of this concern is what happened in 2006, when the advertising revenue dropped by more than $1 million from 2005 (a 14 percent decrease), but the extent of the decline was not evident until later in 2006, after the 2007 budget had been prepared and adopted by the Governing Board. The committee’s crystal ball is no better than anyone else’s, but it and the Cincinnati staff are trying to take conservative and prudent steps to address these concerns.

By the time this article is published, the Finance Committee will have spent considerable time studying the 2009 budget. Pursuant to this review, it will have made recommendations to the Executive Board on the budget and actions committee members believe should be taken.

It has been a pleasure to work with the dedicated members of this committee. I look forward to working with them in the future

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