Sobriquet

Anticipations can be wrong by the evidence of these choices.
See http://chessvictoria.netfirms.com/

I acknowledge a good decision though.

ChessGuru

Who picks the player of the month?

Just2Good

The player's mothers.

__________________
.
"You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete."

~ Buckminster Fuller ~

Sobriquet

Chess Victoria Inc.
Agenda for Executive meeting #2 of 2009/2010 Executive. Thursday 11th February 7pm Chess Ideas premises.

1. Open meeting
2. Apologies
3. Outwards correspondence
a. To note invitation to Clubs to host CV events in 2010.
4. To note achievements
a. Web-site changes to current version
i. Upgrade frequency and timeliness of providing content to the web-master
ii. Include additional calendar information from Clubs
iii. Test of weekly e-mail to CV list detailing forthcoming diary events.

b. Others, to be advised by each Executive member at the meeting.
5. Handover of Treasurer papers and resolution of issues. On target?
6. Report by Treasurer on
a. 2010 budget
b. Expenditure and Receipts to target
c. Other issues.
7. Each member of the Executive has accepted the need to occupy an operational position on the attached Organisation chart. The Secretary to bring the chart up-to-date. This task remains open as the Secretary has tendered his resignation due to relocation to W.A. New task is to appoint a replacement Secretary.
8. The rental agreement with the Canterbury Juniors Chess Club lapsed on the 31st of December and was not renewed. Process and responsibility needs to be decided for the following bundle of tasks
a. Clock maintenance and repair
b. Clocks on loan to Clubs service
c. Trophy purchase and engravings
d. Venue available at no charge to run licenced Interschool events
e. Venue available for CV events
f. Tournament Organiser of the Victorian junior titles events
g. Tournament Organiser of the Victorian Open week-ender
h. Equipment storage. One aspect this has progressed as negotiations with the President of the Melbourne Chess Club have been held, in regard to storage of CV trophies, famous signed scoresheets, and other significant memorabilia, and the solution could be to incorporate these items into MCC display cabinets. The Executive to consider approval-in-principle of this element of the issue #8. Another aspect is storage of second-hand book donations from time to time from widows. Approval-in-principle to store these in an existing facility at the Box Hill Chess Club (no charge). The current bookshelves at BHCC have second-hand-books on free loan and honour system lending.
It is clear Clubs wanted some of these opportunities to be advertised for bids. .
Action necessary to seek expressions of interest from Clubs to be involved in the provision of these services. Appointment of Action Officer on this task.

9. Inwards Correspondence
a. From David Cordover; re web-site offer.
b. Other
10. Report on progress to establish Tournament Manager and Process document for the 2010 Team Championship.
11. Inward correspondence.

12. Action necessary to seek expressions of interest from Clubs to be involved in the provision of event-hostings. Appointment of Action Officer on this task. Leonid Sandler to action for

i. The Victorian Championship
ii. The Victorian Open
iii. The Victorian Blitz
iv. The Victorian Interschool Finals
v. The Victorian Junior Titles
vi. The Teams Championship.
The CV preferred position if for Clubs to run many of these events so that any profits end in Club books. If no Club bids for an event, then the next preferred option is to offer the events to suitable individual promoters. The default fall-back position is that CV will act as tournament organiser and pay for the management of the event. Likely that CV will run i) iii) iv).vi)


13. Set next meeting date and location.
14. Close meeting

Iconoclast

WOW !

If only the NSWCA would post its agenda and minutes ...

__________________
The individual is hopeless without the group.
The group is hopeless without its individuals.

ChessGuru

I don't know if anyone else finds this agenda as amusing as I do... If you don't get the joke then compare this agenda with the agenda from the CV meeting of 23/12/2009.

I look forward to the reports from the Clubs Liaison Officer, the Trophies Officer or even the Arbiter!! Probably not been a busy first 20% of the year.... maybe things get busier now and at least we've got 80% of the year left to do something....

Oops... I think in editing the copy/paste from previous meeting agenda you missed something. My correspondence this month was a recommendation about School-Team events. There's nowhere else on the agenda that school-teams chess is mentioned (even though it is potentially their biggest event).

Looking forward to this...after the President's Meeting in August last year I've been on the edge of my seat.... (This is interclub, right?)

Very strange.

1. Is "Teams Championship" school teams or just interclub? If just interclub then why is the school-teams event treated differently from the rest?

2. CV's preferred position is to have clubs run 'many' of the events. If clubs don't want it then "individual promoters" is a preferred option and if CV can't give it away then they PAY someone run run the event!

Has it ever occurred to CV to do something themselves? Why doesn't CV run events which make a profit and use the funds to subsidise the 'important' events which don't? Why give away the profitable events and then pay for someone else to run loss-making events (costing double because now they cover the loss and the 'management fee').

3. If CV exists only to pay other people to run loss-making events...should they even exist? Why not just let clubs run events they want to and 'promoters' run events they want to ... CV doesn't seem to be adding anything of any value.

Just2Good

Hopefully the seat has a seatbelt!

__________________
.
"You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete."

~ Buckminster Fuller ~

Sobriquet

Chess Victoria Inc.
Minutes for Executive meeting #2 of 2009/2010 Executive. Thursday 11th February 7pm Chess Ideas premises.

1. Open meeting 7.56pm
2. Apologies: Resignation of Jamie Kenmure as Secretary, noted.
3. Outwards correspondence
a. To note invitation to Clubs to host CV events in 2010. Done; invitation has been sent to all Clubs.
4. To note achievements
a. Web-site changes to current version
i. Upgrade frequency and timeliness of providing content to the web-master
ii. Include additional calendar information from Clubs
iii. Test of weekly e-mail to CV list detailing forthcoming diary events.
iv. Some discussion initiated on whether the look-and-feel of the web-site should be modernised. Consensus that the current look-and-feel meets the objective of the Executive.

b. Others, to be advised by each Executive member at the meeting.
i. President has a February newsletter in draft form and this will cover relevant information.
ii. Club Liaison Officer reported on discussions with the MCC re display of CV memorabilia.
iii. Trophies Officer plans to table trophy catalogues for consideration at the March meeting. Trophies register to be constructed.
iv. Assistance given to ECC.
5. Handover of Treasurer papers and resolution of issues. On target? The Treasurer tabled a well-constructed report indicating that there are many issues still to be resolved in the handover from the past Treasurer. Also, some issues have emerged about whether correct documentation is in place to support the correct tax treatment of payments made last year. The discussion was necessarily detailed at the individual level as each case needed to be explored. A very satisfactory discussion with a number of action points set for completion at the next Executive meeting.
6. Report by Treasurer on
a. 2010 budget. Again, this required a lot of discussion. The main parameters of the Executive are i) the document is designed not as a pre-approval for 2010 expenditure, but was fact is an indicator of whether the schedule of charges set by the AGM should be varied from the 2008 charges; ii) the budget can be set with a small loss (given that there are some cash reserves), provided that new expenditure is within approvals made at Executive level during 2010.
b. Expenditure and Receipts to target. The accounting-change by the new Treasurer to accruals accounting, and the work-in-progress on item#5 above, made it difficult to resolve an accurate monitoring of the current position. Discussion identified actions necessary to be done as preparation for the March meeting.
c. Other issues.
i. In regard to the recommendations on page 19 of the Treasurer’s report
1. Agreed
2. Agreed
3. Discussed but not passed.
4. Agreed
5. Agreed
6. Discussed and not passed. The reason for the $75 cap was confirmed.
7. Agreed
8. Agreed
9. Agreed
10. Agreed.
7. Each member of the Executive has accepted the need to occupy an operational position on the attached Organisation chart. The Secretary to bring the chart up-to-date. This task remains open as the Secretary has tendered his resignation due to relocation to W.A. New task is to appoint a replacement Secretary. Held over as negotiations to recruit a CV Secretary are pursued.
8. The rental agreement with the Canterbury Juniors Chess Club lapsed on the 31st of December and was not renewed. Process and responsibility needs to be decided for the following bundle of tasks
a. Clock maintenance and repair. Currently with the President.
b. Clocks on loan to Clubs service. Currently with the President.
c. Trophy purchase and engravings. Allocated.
d. Venue available at no charge to run licensed Interschool events.
e. Venue available for CV events.
f. Tournament Organiser of the Victorian junior titles events. Offer of bids made.
g. Tournament Organiser of the Victorian Open week-ender. Offer of bids made.
h. Equipment storage. One aspect this has progressed as negotiations with the President of the Melbourne Chess Club have been held, in regard to storage of CV trophies, famous signed scoresheets, and other significant memorabilia, and the solution could be to incorporate these items into MCC display cabinets. The Executive to consider approval-in-principle of this element of the issue #8. Approved. Another aspect is storage of second-hand book donations from time to time from widows. Approval-in-principle to store these in an existing facility at the Box Hill Chess Club (no charge). The current bookshelves at BHCC have second-hand-books on free loan and honour system lending. Approved subject to attempted resale (by the Treasurer) of any valuable donations first.
It is clear Clubs wanted some of these opportunities to be advertised for bids.

9. Inwards Correspondence
a. From David Cordover; re web-site offer. Discussed.
b. From David Cordover; re School teams Proposals. Discussed and response drafted.
c. From David Cordover; re CV badged clocks. Discussed and response drafted.
10. Report on progress to establish Tournament Manager and Process document for the 2010 Team Championship. Document tabled and discussed. See 4bi for next action.


11. Action necessary to seek expressions of interest from Clubs to be involved in the provision of event-hostings. Appointment of Action Officer on this task. Leonid Sandler to action for

i. The Victorian Championship.
ii. The Victorian Open
iii. The Victorian Blitz
iv. The Victorian Interschool Finals
v. The Victorian Junior Titles
vi. The Teams Championship.
The CV preferred position if for Clubs to run many of these events so that any profits end in Club books. If no Club bids for an event, then the next preferred option is to offer the events to suitable individual promoters. The default fall-back position is that CV will act as tournament organiser and pay for the management of the event. Likely that CV will run i) iii) iv).vi). E-mail sent to Club Presidents.


12. Set next meeting date and location. Thursday March 18th 2010, Chess Ideas, Cnr Hotham St and Glen Eira Rd Ripponlee.
13. Accept minutes of December meeting. Done
14. Close meeting

Sobriquet

As the new year starts the Presdient said he would like to bring to the attention of all:


• Some details on Victorians at the Australian junior Titles
• The structure of the 2010 Victorian Teams Tournament
• A reminder to Club Presidents that bids for hosting Chess Victoria events closes the 1st of March, and
• A focus ahead on the Ballarat-Begonia weekender
----------------------


Victorian Juniors at the Australian Junior in Hobart , January 2010

First, individual congratulations to Bobby Cheng who outclassed the very strong field creating history by becoming the youngest Australian Junior Champion at tender age of 12! Bobby adds the Australian title to his absolutely remarkable title as World Champion under 12.

The ACF President, proud Victorian Gary Wastell, was instrumental in the operation to bring Bobby to Tasmania for the Australian titles. It was a team effort to support Bobby away from his family; the Cheng campaign, including his coach Chess Victoria Vice President Grandmaster Darryl Johansen, chaperon CV President Leonid Sandler, and Bobby’s host in Hobart ... Vladimir Smirnov.

Out of 116 participants 34 players represented Victoria(29%)

Victorian Juniors once again proved to be very competitive by winning 5 titles out of 12

1.Australian Junior Champion-----Bobby Cheng

2.Australian Champion under 16---- James Morris

3.Australian Champion under 10----Peter Wallmueller

4.Australian Champion under 8-----Ethan Lim

5.Australian Girls Champion under 12 ---- Narethran Savithri

More details and pictures of our titleholders can be seen on the home page of the Chess Victoria web-site at http://chessvictoria.netfirms.com/

QLD got 3 titles, NSW ---2, and ACT and Tasmania 1 each.

Some other 36 titles were decided (Rapid play, Problem solving and lightning) and again young Victorians excelled winning 11 titles.


Victorian Teams Championship 2010

General Info
• 4 player teams + 2 reserves per team
• 7 rounds Swiss open
• Start April/May Finish November
Each team will play roughly 1 game per month.
Clubs are asked to act as hosts to teams whether the team represents their club or not

Teams
4 players to be played in rating order
Players within 100 ACF rating points may choose positions
Players may only play for one team per season
All players to be CV club members, and in most cases it is likely they will form a Team from a single Club. The opportunity exists for Teams to be formed by friends who play at different Clubs.
Guests appearances (two games per season for non club members are permitted additional fee $10 per game is payable to CV Treasurer)

Format
Games to be played in 75 minutes per game + 30 seconds from move one
FIDE rules to apply
Match points to determine teams’ positions
Tiebreak’s a) game points b) results between tying teams
ACF rated


Registration
Teams may register up to 6 players per season.
A player may only play for one team per year
Players must be registered at least one week before they can play a game

Fixtures
Matches may be rearranged for valid reasons
Rearranged matches must be organised at least 48 hours before scheduled date of play and 3 alternate dates + possible venue change must be offered.

Fees
$75 per team

Organisation
Match captains to send results to Championship organisers within 72 hours of completion of the fixture.
Admin to post results and updated standings on CV website

Prizes
Trophies, Medals, Cash

Applications
In the inaugural year, teams have to apply by March 15th 2010.
Team captains should e-mail expressions of interest to me at lsandler2004@yahoo.com


Club bids to host Chess Victoria events

Chess Victoria Inc. seeks expressions of interest from Affiliated Clubs to be involved in the provision of chess event-hostings for 2010.

i. The Victorian Championship..............on offer, but most likely this will be hosted by CV itself.
ii. The Victorian Open
iii. The Victorian Blitz
iv. The Victorian Interschool Finals.....will be hosted by CV itself.
v. The Victorian Junior Titles
vi. The Teams Championship
The CV preferred position if for Clubs to run many of these events so that any profit-share ends in Club books. If no Club bids for an event, then the next preferred option is to offer the events to suitable individual promoters. The default fall-back position is that CV will act as tournament organiser and pay for the management of the event. Likely that CV will run i), iv).

Submissions to Leonid Sandler by e-mail lsandler2004@yahoo.com.


The Ballarat-Begonia weekender

All eyes now turn to this the major event in our Victorian Calendar. It is the event supported by many strong players including Olympian Stephen Solomon who regularly returns from Queensland to contest at Ballarat’s historic venue. It is the event where reputations can be made. Good luck to all who accept the challenge and enjoyment of playing in Ballarat.

Grant Szuveges

The following post in 5 parts is from me (Grant Szuveges) and not from the Melbourne Chess Club. Anyone who has any issue with it should "blame" me and not the MCC for posting this.

This is the CV treasurers report from the Feb 11 CV committee meeting. (the minutes of that meeting can be seen on the thread) I was told that I should have a look at this and thus I got a copy from CV... (all CV affiliated clubs and their members have the right to see it apparently) I also believe that all Victorian chess club committees should also be having a look at this, as should all members of Victorian chess clubs.

Recommendation 3 is of particular interest and I would like to know what Victorian chess players this about this.

I would also like to hear what the 2009 CV treasurer (and 2009 CV committee in general) have to say in response to the "please explains" that the 2010 treasurer asks for in this report....

Im not saying that any foul-play has occured with CV in 2009, but I would like these "please explains" answered including:

1. the alleged "purging of MYOB transactions prior to Oct 1st 2009"

2. the alleged "withholding of financial documents by the 2009 treasurer"

3. the alleged "fictious $1530"

4. the alleged "$3500 ignored financial commitments in the Nov 2009 AGM budget"

5. the alleged "overall loss of $9744"

6. the alleged fact that "Chess Victoria’s financial position and financial trajectory are now quite different to the expectation accepted by members at the AGM less than three months ago. Both are worse, to the cumulative value of about $10,000 or 30% of the total equity reported at the AGM."

7. the alleged payments to Leonid Sandler for $1626 and $2803 (Im not questioning the legitimacy of these, but I do think that they are quite high and that they could be explained in more detail - is it normal to pay someone this amount for organising a masters tournament and an interschool competition?)

As I said earlier, Im not saying that there is any foul play involved. Im just saying that I would like some answers about these points and that the Victorian chess playing public deserve some answers too.

I would also like to say that the 2010 CV committee are not the people who would necessarily have these answers, but I do think that they are now responsible for finding the answers from the 2009 committee... They are not responsible for anything that the 2009 committee may have done - particularly not Darryl Johansen who was not part of the committee in 2009 and from all accounts has been particularly transparent in his CV role in 2010.

Im also happy about the recommendations that were passed and I agree with the decision not to pass recommendation 6. I do think that recommendation 3 should have been passed - particularly if CVs financial situation was so different to what was said at the Nov 2009 AGM (which is what has been alleged in this report).

Hopefully the 2009 CV committee can answer these "please explains" and if they dont, then hopefully the 2010 CV committee can make them accountable for not doing so.

Enjoy reading the CV treasurers report...

__________________
People who have nothing to hide post using their real names...

Grant Szuveges

Chess Victoria Incorporated


Treasurer’s Report
to the Meeting of the Committee of Management
on 11 February 2010




author: David Grenness, Treasurer
pages: 24
date: 10 February 2010



Table of Contents
Executive Summary ii
Introduction 1
Handover from previous treasurer 2

Documents withheld by previous treasurer
Obligation to maintain records 3
Request for records 3
Action available to committee 4
Recommendations 1 & 2 4

Rubbery figures from the previous committee
2009 Balance sheet 5
2010 Budget 6
Consequences 7
Recommendation 3 7

Financial statement at 31 January 2010
Introduction 8
Australasian Masters 9
Sponsorship income accrued but not yet received 9
ABN withholdings payable 9
ACF-FIDE rating fees 10
Adjustments to Opening Provisions 10
Variance from budget 10
Recommendations 4 & 5 11

Broad financial considerations
Financial context 12
Chess Victoria projects and cross-subsidisation 12
Chess Victoria involvement in the pre-club (schools) area 13
Recommendation 6 13

Payments to committee members 14

Payment procedures
Issues 15
Recommendations 7 & 8 15

Optimisation of bank accounts
Issues 16
Recommendations 9 & 10 16

Australian Business Register status 17
Conclusion 18

Appendix 1 – List of Recommendations 19
Appendix 2 – 2009 Balance sheet 20
Appendix 3 – 2009 Profit & loss 21
Appendix 4 – 2010 Budget ex AGM 22
Appendix 5 – Interim balance sheet at 31 Jan 2010 23
Appendix 6 – Interim profit & Loss at 31 Jan 2010 24
Executive Summary

Purpose

In this report, I aim to:
(a) inform the committee of significant treasury-related issues as at 31 Jan 2010; and
(b) recommend to the committee specific actions and operational procedures.

Background

I was elected treasurer at the November AGM and have found a number of knotty issues. I subsequently notified the president by email of some broad issues that I have been investigating and now think it most effective to get it all down on paper in this report.

No cheques have been written since the cheque book came into my custody on December 23. None of the current committee members were signatories to the cheque book until late January 2010. Only two of the current committee members were on the previous committee.

Sources of information & methodology

My information source is primarily documents and records of Chess Victoria. However access to documents required to establish appropriate evidence for accounting purposes has been substantially denied by the previous treasurer. Accordingly I am limited to the Chess Victoria information to which I have been permitted access. I have also taken the precaution of referring to many provisions of the Associations Incorporation Act 1981 (Vic) (‘AIA81’) so as to explain to committee members their obligations in relation to treasury matters.

Main findings

Despite the glowing budget presented to the last AGM, another financial loss is in prospect for 2009/10, because of expenditure commitments omitted from the budget. Further, the balance sheet position of the association was somewhat weaker than was presented at the AGM. Nonetheless Chess Victoria still has $20,000 cash in the bank with which to fund its losses until a real strategy to derive profits can be invented.

Conclusions and recommendations

I have made 10 recommendations (Appendix 1) which will strengthen and protect Chess Victoria’s internal processes. However I have no formula for turning around Chess Victoria’s finances.

Nonetheless I believe that my recommendation #6 is a small step in the right direction – removing the cap on the licence fee for school events. I also think that increased income from sponsorships and grants will be required in the future.


Introduction

Purpose

In this report, I aim to:
(a) inform the committee of significant treasury-related issues as at 31 Jan 2010; and
(b) recommend to the committee specific actions and operational procedures.

Background information

At the AGM on 29 November 2009, the members elected two incumbents and four new faces to the committee. I, as treasurer, am one of the new faces, a newly trained accountant (Master of Professional Accounting, Monash University) but with decades of experience in organisations as an employee and employer. I have continued to use the MYOB accounting software used by the previous treasurer.

Chess Victoria’s external financial transactions involve substantial timing differences between the receipt of cash and the payment for expenses naturally associated with those cash receipts. Accordingly I have implemented accrual accounting so as to provide more relevant financial information for what is, after all, the state association of Victorian chess clubs.

Scope, assumptions and limitations

This report is limited to the information provided to me by the former treasurer and some other parties. In particular, there are a number of financial transactions since 30 September 2009 where information has been specifically requested but withheld by the previous treasurer. In preparing a profit & loss statement to 31 January 2010, I have made reasonable assumptions about those transactions based upon what information I have been given and I have noted them in this report. My access to information from before 30 September 2009 is close to zero. However I have ascertained that no stocktake or valuation of property and equipment was undertaken to support the representation made in the 2009 balance sheet, and that no current asset register exists.

Structure of the report

My report starts by acknowledging the mechanics of handover from the previous treasurer and the issue of information withheld. The veracity of the 2009 balance sheet and 2010 budget presented to the AGM are then reviewed in light of supporting records and various obligations entered into by the previous committee prior to the AGM. Then follow my (qualified) financial statements for the four months to 31 January 2010. Finally, ongoing operational matters are discussed, including payments to committee members, procedures for making payments generally, optimisation of bank accounts and recognition of Chess Victoria on the Australian Business Register. Recommendations are made throughout the report and summarised in Appendix 1.


Handover from Previous Treasurer

Handover from the previous treasurer commenced immediately following the AGM and is ongoing.

The most significant event was the handover of the cheque book following the first meeting of the new committee on December 23. Up to that time (interregnum) all payments were under the control of previous signatories to the cheque account or tournament organisers (appointed by the previous committee) who made cash payments out of cash receipts.

No cheques have been written since December 23, and the account signatories have been changed to include current committee members only. Accordingly the financial information presented in this report to 31 January 2010 primarily represents decisions of the previous committee.

Another significant event was the handover of MYOB in the first week of December together with some documents selected by the previous treasurer. MYOB transactions prior to 1 October 2009 had been purged from the system and some post-October transactions had been stripped of their internal information (presumably during the purge process). However MYOB does retain some historical information where open transactions directly impact the balance sheet. Being on a very steep learning curve, both technically and politically, I initially proceeded on the basis of asking for information as I found I had a specific need for it. Most of my communication with the previous treasurer has been by email.



Documents Withheld by Previous Treasurer

Obligation to maintain records

It was on 3 February that I became aware of the scope of Chess Victoria’s obligations. Chess Victoria is obliged to maintain adequate and accurate accounting records of financial transactions (Associations Incorporation Act 1981 (‘AIA81’), s. 30A). Accounting records are defined to include all documents triggering recognition of accounting entries or explaining how accounts are made up (AIA81, s. 1). Relevant documents are defined to include records, no matter how compiled, recorded or stored (AIA81, s. 1). The adequacy of records in terms of retention period can be gauged by the obligation to keep financial statements made to members for seven years (AIA81, s. 30(3), (3A), (3B) and (4A)).

Request for records

Accordingly on 3 February 2010 I made written (email) request to the previous treasurer for all treasury-related documents in his possession, including all electronic documents and records up to eight years old. He has not acknowledged or otherwise responded to this request although we have since had other email correspondence.

Prior to 3 February the previous treasurer provided to me specific documents in response to specific requests from me for information. These requests were triggered by anomalous information on MYOB. However, the previous treasurer did not accommodate all of my specific requests for treasury-related information. Four notable instances of his professional silence are:

• the 2009 balance sheet item ‘undeposited funds’ was $1,403, yet the bank deposit made on 2 October 2009 was for only $932 and some subsequent deposits from 22 October had been stripped of descriptions for some of their components: please explain the difference of $471

• [$150 of the $471 missing from above was explained by a deposit slip error once the bank gave me on 22 January a reprinted bank statement for the period 30 September to 2 October; it appears that the previous treasurer had earlier requested this odd two-day bank statement and then withheld it from me]


• the 2009 balance sheet item ‘cheque account’ was $13,716, yet the bank statement at 30 September showed only $12,815; the major contributing factor was revealed by MYOB to be an outstanding deposit of $1,530 on 3/10/2008 which was never banked; hard copy bank reconciliation statements prior to 30 November 2009 show no record of such an undeposited amount; a trial reconciliation report printed on 14/11/2009 but run as at 28/11/2008 also showed nil outstanding deposits; this suggests that the 3/10/2008 deposit of $1,530 never existed but was invented, recorded and subsequently purged in the fortnight prior to the November 2009 AGM: please explain

• a journal entry recognising undeposited funds of $180 dated 16/10/2009 contained an internal cash payment of $240 against an inactive 2002 revenue account; this had the effect of ‘disappearing’ $240 of cash belonging to the transaction; cash received was acknowledged to a number of schools; the true destination of the $240 is probably revealed by the journal entry description, which identifies the recipients as a ‘VK’ for $100 and ‘DH’ for $140; presumably these mean Victor Kildisas and David Haache, two current committee members: please explain.

Action available to the committee

The committee should have the moral authority to win compliance with a verbal request to the previous treasurer for the return of the property (documents, records, etc) withheld. Should the previous treasurer’s loyalty prove to be beyond the suasion of the current committee, the Act provides some redress (AIA81, s. 29D).

__________________
People who have nothing to hide post using their real names...

Grant Szuveges

Recommendation 1

That the committee forthwith press the previous treasurer for the return of all CV documents and records, including all those stored electronically.

Recommendation 2

That the committee approve unfettered access by the treasurer to all CV documents and records, in whatever form stored, in the custody of members of the committee.

Rubbery Figures from the Previous Committee

2009 Balance Sheet

I have reprinted from MYOB the balance sheet presented to the AGM and displayed it at Appendix 2. MYOB still contains some information about the composition of the accounts which were reported upon.

The previous treasurer, perhaps inadvertently, used a mixture of cash and accrual accounting methodologies. He also created some very dubious entries while failing to correct others, and failed to conduct a stocktake or valuation of property & equipment. The account ‘accrued expenses’ for $1,404 was not supported in MYOB by any more detailed information; neither was there any supporting documentation; and $1,404 was the same amount as appeared in the balance sheet the previous year.

I have created adjustments to the accounts in the current financial year to recognise ‘underprovisioning’ as at 30 September 2009, on an accruals basis. For simplicity, these entries are grouped in the current year in the expense item ‘adjustments to opening provisions’. The total of this expense at 31/1/2010 is $5,224, which recognises the following matters:

• affiliation fees for 2010 were invoiced and recognised as income prior to 30 September 2009; this income was recognised regardless of whether the invoices were paid prior to 30 September 2009 or whether they were ever paid at all; that accrual accounting implementation was inappropriate; invoices for such fees are merely an invitation to reaffiliate and not a contractual debt owed to Chess Victoria; 2010 affiliation fees cover 2010 operating expenses and, one way or another, should be recognised only in the 2010 year and only when actually received; the amount of affiliation fees received as income or treated as a debt at or prior to 30 September: $3,223

• as discussed above, a fictitious bank deposit for $1,530 dated 3/10/2008 was invented, recorded and then purged in the fortnight before the November 2009 AGM; in the absence of relevant records and explanation from the previous treasurer it is not determinable whether this transaction related to income recognised in the 2009 year or an earlier year; regardless, it is necessary to adjust opening retained earnings for 2010 downwards by: $1,530


• Chess Victoria bills clubs for ACF ratings fees quarterly in arrears but is itself billed approximately annually in arrears by the ACF; FIDE ratings fees are sometimes billed years in areas and have previously been considered unpredictable; these processes create major time delay in matching ratings expense with corresponding ratings income; the provision ‘accrued expenses’ of $1,404 at 30 September was quite inadequate to cover accrued ACF ratings fees which I have estimated at $2,878 at 1 September 2009; one day the ACF will presumably bill CV for ratings expense at the same time as CV bills clubs; when this happens a black hole will occur unless proper provisions are in place; shortfall: $1,524 (includes $50 provision for unpredictable FIDE fees).

• there are a number of lesser adjustments, both positive and negative, to: tidy up residual ‘noise’ in MYOB relating to ‘trade debtors’, ‘provision for doubtful debts’ and ‘trade creditors’ which have never been properly closed but, on information from the previous treasurer, should have been closed, and continued to distort those particular accounts in the 2009 balance sheet; and tidy up some odd records for unpresented cheques dated 2004 and 2005, upon which the previous treasurer has not yet responded to my requests for information.


2010 Budget

The budget presented to the AGM for adoption is displayed at Appendix 4. It is a stand-alone document without supporting documentation.

The budget created the expectation amongst members that Chess Victoria would turn a profit of $1,940 this year. However I have identified over $3,500 of commitments which ought to have been known by the previous treasurer to be probable at the time of the AGM but were not factored into the budget. A further $700 shortfall in income is locked into the budget due to the reliance in the budget of improper implementation of accrual accounting to recognise 2010/11 affiliation fees as income in the 2009/10 year. Against this, the new president has since indicated that it will not be necessary to spend $3,000 for website costs. Conceivably, if the $3,500 costs itemised below had been recognised in the budget, then the previous committee would have made their allowance for website costs much lower.

The $3,500 of commitments ignored in the budget presented at the November AGM were:
$2,000 sponsorship of Australasian Masters in December
$1,000 rent to Canterbury Juniors chess club for December qtr
$ 500 sponsorship of MCC Cup Weekender in October
$ 100+ payment of all ratings fees on behalf of the MCC Cup Weekender in October.



Consequences

Clearly I now need to perform a stocktake and valuation of property & equipment.

Beyond that, certain expenditures by the previous committee following the AGM in December were made in breach of the Statement of Purposes and Rules (‘the constitution’) para 12(4). Briefly, because there was no allowance for unforeseen expenditure in the budget adopted by the AGM, any expenditure on unbudgeted items has to be approved in a further general meeting before payment can be made. The expenditures in question relate to the Australasian Masters. The budget made no provision for appearance fees (totalling $600 , paid to two competitors) or, alternatively, no provision for sponsorship and underwriting of the tournament (will ultimately be in excess of $3,000 cost to CV, subject to potential clawback of a portion if agreement can be reached with the tournament organiser as discussed below under Payments to Committee Members). In these circumstances, ratification of these payments in general meeting would be required to protect the former cheque signatories from potential future claims for damages.

Looking forward, the absence of a contingency item in the budget approved in general meeting makes current committee members liable for any unbudgeted expenditure which they may make, unless ratification can subsequently be obtained for such expenditure from a general meeting.


Recommendation 3

That the committee consider calling a March General Meeting of members to:
• review the financial position of Chess Victoria;
• ratify expenditure already made by the previous committee without authority; and
• adopt a revised budget for 2010 which will include a contingency item.



Financial Statements at 31 January 2010

Introduction

The interim balance sheet at 31 January 2010 is displayed in Appendix 5.

The profit & loss statement for the year to 31 January 2010 is displayed in Appendix 6. It shows an overall loss of $9,744, comprising $5,224 of adjustments attributable to opening retained earnings at 1/10/09 plus a loss $4,520 since 1/10/09.

These financial statements reflect both what I have done and what I have not done, and also assume that the selected information I have access to has been adequate and true. What I have done is:

• make adjustments through a special expense account to recognise deficiencies in the quality of the 2009 balance sheet, as discussed above;

• enter adjusting journal entries to augment the effect of entries made by the previous treasurer for the current year but prior to December 2009, where his treatment appears deficient in terms of CV’s obligations;

• record new transactions which were either incomplete or not commenced prior to December;

• accrue prepaid insurance, sponsorship income and ratings fees expense, including a small provision for unpredictable FIDE ratings fee expense;

• expense four months’ worth of insurance and depreciation; and

• request full information from the previous treasurer to allow me to do my job.

In the absence of full cooperation from the previous treasurer, I have made reasonable assumptions. If I ultimately get access to all of the supporting documents and records then further adjustments may be necessary.

What I have not done is:

• undertake a stocktake and valuation of property & equipment, which I believe is necessary in light of a total absence of accounting evidence to support the property & equipment figures presented in the 2009 balance sheet.

Notable items are explained in more detail below.

Australasian Masters

Chess Victoria not only sponsored this event in December 2009 but accepted all of the financial risks of the project. Accordingly this event is recorded through the books of Chess Victoria as a CV event.

Sponsorship income accrued but not yet received

Chess Victoria is understood to have had sponsorship arrangements in place to help fund two major tournaments in 2009. $3,000 was expected from Lexus (for Victorian championships) and 550 Euros was expected from FIDE (for Australasian Masters). None of these funds has been received as at 31 January 2010.

I have prepared the profit & loss statement showing these arrangements as income, despite the fact that I have no documentary evidence of them as commitments. For simplicity the 550 Euros has been expressed as $850, equivalent to an exchange rate of 0.647 Euro/A$. An adjustment for exchange rate fluctuation will be made upon final receipt of the funds.

It is understood that the president is following up on both of these sponsorship arrangements. Should either or both of them become unrecoverable in whole or in part, some income already recorded will have to be reversed.

ABN withholdings payable

The amount $2,786 appears as a current liability. This relates to Chess Victoria’s compliance with the A New Tax System (Pay As You Go) Act 1999 (‘PAYG99’). Although Chess Victoria currently enjoys exemption from income tax under the two Income Tax Assessment Acts (1936 and 1997), that exemption can be put at risk indefinitely if it fails to comply with the requirements of PAYG99. PAYG99 effectively makes CV a tax collector/enforcer.

PAYG99 requires that Chess Victoria obtain appropriate documentation from payees before making payments, otherwise tax must be withheld and forwarded to the tax office at the rate of 46.5% on behalf of the payees. Payments for prize money and appearance fees, however, are understood to be free of PAYG99 obligations. Nonetheless, after 1 October 2009 but before the cheque book was given to the new committee on 23 December, payments totalling $3,210 were made by the previous committee without the necessary documentation. The corresponding obligation of Chess Victoria to the tax office is now $2,786.

Matching this $2,786 current liability in the accounts is an equal amount of expenses, recorded to the expense accounts of the original payments in amounts proportionate to those payments. Items include arbiter fees, tournament organiser fees and rent (schools finals).


Chess Victoria should attempt to recover the necessary documentation from those payees who received $3,210, as a matter of urgency. As and when Chess Victoria is successful in that endeavour, the liability provided in the accounts can be progressively wound back. Certainly it would be an unfortunate burden on me and all future treasurers if CV has to register now with the ATO for PAYG withholding merely because of non-cooperation of payees.

ACF-FIDE rating fees

In the past these fees have been billed to CV in arrears, sometimes years in arrears. The ACF treasurer has not responded to my email requesting guidance which would have enabled me to create a methodology to estimate ACF-FIDE ratings fees accrued. The amount shown ($200) is the budgeted amount for the Australasian Masters ($100), plus a further contingency ($100) to reflect the absence of information from the ACF in relation to current year and prior year FIDE obligations. It is hoped that this provision ultimately proves to be no more than $100 out.

Adjustments to Opening Provisions

This expense of $5,224 relates to the tidy-up of the 2009 balance sheet and does directly relate to the current financial year.

Variance from budget

The operating loss of $4,520 for the four months ended 31/1/2010 compares with the budgeted annual profit of $1,940, an unfavourable operating variance of $6,460 so far. This variance has occurred without the new committee writing one cheque or making one cash payment, and assumes that the new committee will be successful in recovering all sponsorship monies negotiated by the previous committee.

Significant contributions to the unfavourable variance
Australasian Masters: $0 budgeted vs approx $2,200 sponsorship/underwriting costs
Rent: $0 budgeted vs $1,000 paid for 3 Rochester Road
MCC Cup weekender: $0 budgeted vs $708 cost of CV sponsorship (income foregone)
Affiliation fees: $3,900 budgeted vs only $3,227 received for 2009/10
PAYG withholding: $0 budgeted vs $2,786 liability already incurred
Total variance identified above: $8,500 unfavourable (approx).

The new president suggested at the December committee meeting that the $3,000 budgeted for the website overhaul was unnecessary. Savings in that area will assist the ultimate financial result.

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Grant Szuveges

Recommendation 4

That the committee resolve to press recipients of $3,210 of recent payments to either:
• provide the necessary PAYG-related documentation; or
• return the funds previously paid.

Recommendation 5

That the treasurer coordinate a stocktake and valuation of property & equipment.





Broad Financial Considerations

Financial context

The reserves (or working capital) position remains manageable in the medium term with some $20,000 in the bank against an annual gross expenditure budget of similar amount.

The $5,224 written off ‘opening retained earnings’ by my review of the 2009 balance sheet means that profits reported in previous years were effectively overstated or losses understated by the cumulative amount $5,224. The word ‘effectively’ here acknowledges, inter alia, the limitations of the accounting processes and resources employed in prior years. Some further write-off could arise once property & equipment is valued. In the absence of full historical records, I can only speculate that the string of real losses in the last few years may well have been somewhat worse each year than was actually reported.

The prospect for 2010 is that, despite a profit-forecasting budget at the AGM, despite the cancellation of the website redevelopment project mentioned above, and despite sponsorships totalling nearly $3,850 having been recorded as income even though they have not yet been received, a loss will again be reported this financial year. Should that occur, the string of annual losses will remain unbroken for another year.

Such an outcome is not what members expected at the AGM. They expected both a profit and website renewal. It is unclear how many more years (and dollars) members will give its committee to turn this ship around. In this context I think the issues below are relevant.

Chess Victoria projects and cross-subsidisation

Chess Victoria might be said to have three main service areas:
• major tournaments – running Victorian championships plus optional national events;
• clubs – centralised services to affiliated clubs, recruitment of unaffiliated clubs, assistance to fledgling unaffiliated clubs; and
• pre-club – support for junior coaching and junior tournaments outside the club environment.

It is reasonable that income derived from clubs and major sponsorships fund expenses in the first two areas – major tournaments and clubs – plus associated Chess Victoria overheads, plus a budgeted contribution to a surplus.

It is reasonable that income derived from school events and any related sponsorships fund expenses for pre-club juniors development, plus associated Chess Victoria overheads, plus a budgeted contribution to surplus.

Given that pre-club juniors are serviced exclusively by private operators on a commercial basis, I believe it would be wrong to be using funds raised from clubs to subsidise the costs of private operators at the current time. This is particularly the case where members have been agitating for improved web-based services to clubs, which CV cannot currently fund, and member Cordover has circulated an analysis suggesting that the bigger CV licensees are being handsomely rewarded (in a low profit sector) for the work they do. Where CV wants to support a new or struggling private operator to become established in a new (say remote) area, any funding for this item should form part of its overall balanced/profit budget for the pre-club area.

Conversely, it would be unconscionable to use pre-club juniors’ parents as a source of funding for clubs and open tournaments. Rather, profitable zones of pre-club activity should be ‘milked’ to support the further growth of pre-club activity across the state. This ‘milking’ would be an ethical reinvestment in the base of the chess ‘pyramid’.

Chess Victoria involvement in the pre-club (schools) area

Chess Victoria licenses private operators to run pre-club activities using the CV name. Despite the licence fees raised, Chess Victoria appears to be making a financial loss on the pre-club area overall. In the four months to 31 January 2010, CV’s accounts show this loss at $2,200 (including rent for a finals venue); assuming, however, that the committee is successful in recovering all of its PAYG withholding obligations through negotiation with payees as discussed above, this loss would be just $600 for the four months.

In allowing private operators to use the CV name, I would have thought that CV’s best interests would be to:
• target zero/positive annual profit from our total pre-club activities;
• design mechanisms by which those operators who are successfully milking juniors’ parents using the CV name are themselves milked by CV as part of our total balanced/positive pre-club budget;
• as a first small step, remove the $75 cap on licence fees, meaning that CV gets income of $2 per participant regardless of the number of participants.

Recommendation 6

That the school event licence fee henceforth be set as $2 per player per event, with no $75 cap, and that this change be submitted for ratification at the next general meeting of members.






Payments to Committee Members

Committee members should be advised that the financial statements to the next AGM for the current financial year will disclose the nature and extent of their interests in any contracts which CV has with them or with third parties, as per AIA81 s. 29B, where I am aware of the details.

Details of which I am currently aware from the accounting records are as follows:
Member Contract Nature of interest Extent of interest
Hacche Arbiter,
Interschool finals Received payment in cash; also interest in associated refundable PAYG withholding amount payable to ATO by CV $261
Johansen Arbiter,
Primary open final Received cheque made to self; also interest in associated refundable PAYG withholding amount payable to ATO by CV $186
Johansen Appearance fee, Australasian Masters Received cheque made to self $400
Kildisas Arbiter,
Interschool finals Received payment in cash; also interest in associated refundable PAYG withholding amount payable to ATO by CV $186
Sandler Organiser and arbiter, Australasian Masters Received cheque made to self; also interest in associated refundable PAYG withholding amount payable to ATO by CV $1,626
Sandler Organiser,
Interschool finals Received cheque made to self; also interest in associated refundable PAYG withholding amount payable to ATO by CV $2,803

Quite apart from the disclosure requirements, the above payments constitute all of CV’s PAYG withholding liability. This liability can be clawed back if the full cooperation of the committee members can be obtained.




Payment Procedures

Issues

The PAYG withholding requirements, discussed above, are a pain to be avoided, both because of the cost and administrative burden. This pain can be avoided by determining the appropriate documentation requirements for each type of payment and obtaining that documentation before each cheque is signed and each cash payment made. Payments which have been a problem so far are: rent, arbiter fees and tournament organiser fees. Payments not affected by PAYG are prize monies and appearance fees.

As CV has no employment contract with anyone, the PAYG withholding burden arises where CV fails to obtain from each payee either:
• a credible document for the specific service supplied bearing the supplier’s ABN; or
• a credible written statement from the payee to the effect that the work was performed as a private hobby or was private or domestic in nature.

A supplier’s invoice with an ABN is only credible if the ABN belongs to that supplier, as evidenced by, say, an online search of the Australian Business Register. A statement claiming that work was of a private nature would only be credible if it merely reimbursed costs incurred or was an isolated activity, as opposed to forming part of a pattern of income-producing work.

As the documentation requirements are somewhat technical and need to be scrutinised before payments are made, I suggest that all payments other than prize monies and appearance fees be made by cheque with myself as one of the signatories. In the near time, appearance fees should not be paid until a new budget is adopted as per Recommendation #3. Prize monies can be paid by cash (out of entry fees) or by cheque using signatories other than myself, provided the paying tournament organiser retains a record of the payee’s identity.

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Grant Szuveges

Recommendation 7

That the cheque book reside primarily with the treasurer, with specific release to another signatory only for the purpose of paying prize money.

Recommendation 8

That no cash payments be made on behalf of CV unless they are:
• for prize money, and records are kept; or
• for purchase of consumables from a retail business, for which reimbursement will be claimed, and a tax invoice or other official documentation is retained.

Optimisation of Bank Accounts

Issues

We need to minimise bank charges for our operations and maximise interest income on our cash balances. I have looked around for a combination of a good transaction account and a good savings facility in the one bank.

Currently we use a Westpac cheque account which pays no interest and has limited free transactions. Westpac has released their Community Solutions Cheque Account which has unlimited free deposits/withdrawals and pays 0.35% interest. This is a more attractive product to us, and is comparable to the Bendigo Bank for a transaction account.

Transitioning to the new account would entail making deposits to it whilst drawing cheques on the old account. The old account balance would be kept above $2,000 to avoid monthly fees until all direct depositors (primarily schools) have had ample opportunity to recognise our new bank account, at which time the account would be closed.

We also have a Bendigo Bank cash management account which was originally intended to attract a higher rate of interest on CV reserves. However these higher interest rates have not been achieved. I also believe that it is cumbersome to arrange term deposits through Bendigo Bank. I think that the term deposit rates at Westpac are competitive and Westpac would be more convenient for me.

Transitioning from Bendigo Bank to a Westpac term deposit would entail:
• using EFT to transfer the balance of the Bendigo account to the existing Westpac Classic account; followed by
• writing a cheque from the Classic account for deposit into the Westpac term deposit.

Recommendation 9

That Chess Victoria open a Westpac Community Solutions Cheque Account.

Recommendation 10

That the committee authorises the president and treasurer to:
• transfer the balance of the Bendigo account to the existing Westpac Classic account, and close the Bendigo account;
• jointly decide the amount and term of a new Westpac term deposit; and
• sign all documents necessary to establish that Westpac term deposit.


Australian Business Register Status

The Australian Business Register still shows our ABN as belonging to Victorian Chess Association Inc. I mailed relevant updating documentation to the Australian Taxation Office in December, but of course the holiday period has intervened. If the ATO hasn’t updated our details within another four weeks I will telephone them on this matter.


Conclusion

The handover of documents and records from the previous treasurer got off to a flying start but has hit a snag requiring the intervention of the committee.

Nonetheless, I have been able to critically assess the financial situation inherited and produce financial statements as at 31 January 2010, with appropriate qualifications noted in this report.

Chess Victoria’s financial position and financial trajectory are now quite different to the expectation accepted by members at the AGM less than three months ago. Both are worse, to the cumulative value of about $10,000 or 30% of the total equity reported at the AGM. Nonetheless Chess Victoria’s cash reserves are adequate to obviate the need for any knee-jerk reaction.

The current committee obtained custody of the cheque book after the committee meeting on 23 December. None of the current committee members were recognised as signatories of the cheque account by the bank until late January. No cheques have yet been signed by current committee members. All known cash and cheques have been banked.

The president has already signalled that website redevelopment has been put on the back-burner. He is also pursuing the recovery of sponsorship monies promised in 2009 – his success is critical as my financial statements have already booked those monies as income. His support for the resolution of all PAYG withholding issues is an important issue as the bulk of payments at issue relate to services provided by current committee members, although they were not all committee members at the time of the payments.

I have discussed my thoughts on the strategic compartmentalisation of CV’s services into three areas and the potential measurement and targeting of the implicit cross-subsidisation between those areas. As a small first step, I have recommended removing the cap on the ‘school event licence fee’, to mitigate unwarranted cross-subsidisation of CV’s schools (pre-club) activities, and as a result to assist the budget overall.

In the longer term, I believe that Chess Victoria needs to attract more sponsorships and government grants. In this endeavour I believe that a high quality of financial reporting to the committee, members and potential financial supporters can play a constructive role.

My ten recommendations from this report are listed immediately below in Appendix 1.





Appendix 1 – List of Recommendations

1 That the committee forthwith press the previous treasurer for the return of all CV documents and records, including all those stored electronically.

2 That the committee approve access by the treasurer to all CV documents and records, in whatever form stored, in the custody of members of the committee.

3 That the committee consider calling a March General Meeting of members to:
• review the financial position of Chess Victoria;
• ratify expenditure already made by the previous committee without authority; and
• adopt a revised budget for 2010 which will include a contingency item.

4 That the committee resolve to press recipients of $3,210 of recent payments to either:
• provide the necessary PAYG-related documentation; or
• return the funds previously paid.

5 That the treasurer coordinate a stocktake and valuation of property & equipment.

6 That the school event licence fee henceforth be set as $2 per player per event, with no $75 cap, and that this decision be submitted for ratification at the next general meeting of members.

7 That the cheque book reside primarily with the treasurer, with specific release to another signatory only for the purpose of paying prize money and appearance fees.

8 That no cash payments be made on behalf of CV unless they are:
• for prize money, and records are kept; or
• for purchase of consumables from a retail business, for which reimbursement will be claimed, and a tax invoice or other official documentation is retained.

9 That Chess Victoria open a Westpac Community Solutions Cheque Account.

10 That the committee authorises the president and treasurer to:
• transfer the balance of the Bendigo account to the existing Westpac Classic account, and close the Bendigo account;
• jointly decide the amount and term of a Westpac term deposit; and
• sign all documents necessary to establish that Westpac term deposit.

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Iconoclast

Q. Is this relevant to matters here

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