[OSGeo Finance] Motion: Approve 2008Q3 Financial Statements

[Ken Tamura]

See my responses below.


Ken Tamura
Geospatial Solutions of Autodesk, Inc.
415-547-2114 (w)    415-299-1704 (c)


-----Original Message-----
From: Frank Warmerdam (External)
Sent: Thursday, October 30, 2008 9:29 AM
To: Ken Tamura
Cc: Finance List
Subject: Re: [OSGeo Finance] Motion: Approve 2008Q3 Financial Statements

Ken Tamura wrote:
> This looks fine.  Vote: +1
>
> Future modifications that could be considered:  (1) Add to Balance Sheet
> Cash a section called 'unrestricted' and 'restricted';

Ken,

Currently the balance sheet does not have anything labelled "Cash".  Are
you referring to the section listing Bank Accounts under ASSETS->Current
Assets?

[Ken's response] Normally, non-for-profit balance sheets separate their cash from 'restricted' and 'non-restricted' funds.  For example, grant from the GOV are often received with restriction on how to use the money and require reporting of the use of these fund, and therefore is show separately in reporting.  Since I believe the current cash balances are donations with no restrictions, then this is not needed at this time.

This is derived from the actual bank account balances and I'm not sure
how to structure it to reflect some of that cash being restricted.  [Ken's response] This is for future reporting.

I presume you are suggesting doing this instead of showing restricted
project funds as a liability.  Is that right?  [Ken's response] How was the GDAL Restricted account recorded? (what was the journal entry to record this?  Credit: GDAL Restricted; and Debit: ???  I need to understand the accounting entry to answer this question.

 > (2) Provide a summary income statement; and

Are you suggesting that there is too much detail in the existing
Income and Expenses document?
[Ken's response] This income statement is very detailed.  I think it is about preferences and the intended audience.  If this report is for the Finance Committee, this level may be ok.  If this is for Board Review, is this level of detail ok?  If so, then there is no need for this comment.

(3) Provide an additional report that provide
> YTD and/or other QTR for comparison.

I'm not sure what QTR means.  [Ken's response]  this is short for quarter.

I would like to provide a version of the Income and Expenses document
that reflects summarizes the income and expenses to the end of the most
recent quarter so people have an idea how we are doing "on the year".
But thinking was that this would be an informational document and would
not need to be approved.  I'm assuming it would reflect the totals from
all the approved quarterly documents so far during the year.

[ken's response]  Given the above definition, for most people who do normally review the financial information, showing one static reporting period (Q3) is often combined with other quarters so that the current quarter can be evaluated.  With only one reporting point of reference, there is limited ways of understanding if the results are good/bad other than to see if there is profit.  Due to the seasonality of the key events, quarter results will vary wildly.  Therefore, my suggestion is to show a report that compares this to past quarters such as showing all three quarters side by side.  Also see my comment for the report below.

One other concern is that it is not currently easy to relate our
income and expenses to the budget since very different breakdowns are
used.  I was considering manually preparing a wiki page at the end of the
year reflecting our actual performance compared to our budget.  I'm not
so keen on taking this on as a quarterly responsibility.

[Ken's response]  Usually the budget detail level is ultimately the summary level that financial are reviewed.  This enables the exec team who understand the budget buckets to see how well the business is doing in relation to the budget benchmark.  The existing detail income statement is ok for a detail review, however a summary income statement is better used for executive summary to show the variance to budget.  My recommendation is to develop a summary income statement at the budget level which groups most of the detail items into the budget categories.  I believe Tyler knows how to do this.

These suggestion do not have to take place all at once, but at the pace of our needs.   Based upon my experience as a finance executive, these are simple suggestions to continually improve financial reporting for the future.

Best regards,
--
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