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LNC Meeting of April 2001
Treasurer's Report
Libertarian National Committee, Inc.
April 21, 2001
Deryl W. Martin, Asst. Treasurer
The last Treasurer's Report of December 2000 raised concerns in two
areas; 1) revenue shortfalls, and 2) limited liquidity. Respectively,
suggested remedies included 1) more diligent LNC monitoring of budget
variances going forward on a month to month basis, and 2) permanently
incorporating the notion of a reserve via fund segregation into
certificates of deposit. Also, a positive net working capital position
each month was deemed prudent.
Concerns:
Unfortunately, these problems persist, as detailed below.
At its mid-March teleconference, the EC agreed to receive monthly
summary reports covering financial as well as operational developments
from the national office (Please refer to the attached exhibits). Of
most financial interest are the Revenue/Expense Summary Report and the
Balance Sheet Summary Report.
The Revenue/Expense Summary covers the first two months of this
year. Hence, the "YTD Budget" columns of the Revenue/Expense Summary
are simply one-sixth of yearly budgeted amounts for comparison
purposes. As you can see from the "YTD Actual" columns, significant
variance from budgeted revenue amounts have continued into the current
year. The historical information and chart below demonstrate the
extent of this problem.
| Revenues for | January | February | Jan/Feb Total | Entire Year |
| |
| 1999 | $ 230,060 | $ 218,321 | $ 448,381 | $ 2,689,006 |
| % of yearly total | 8.55% | 8.12% | 16.67% |
| |
| 2000 | $ 194,219 | $ 303,183 | $ 497,402 | $ 3,590,232 |
| % of yearly total | 5.41% | 8.44% | 13.85% |
| |
| 2001 | $ 245,726 | $ 157,545 | $ 403,271 | $ 3,154,722 |
| % of yearly total | 7.79% | 5.00% | 12.78% | (budgeted) |
For comparison, the implicit assumptions of the "YTD Budget" columns
on the Revenue/Expense Summary Report most closely resemble our
experience of 1999, that is, approx. one-sixth of yearly revenue was
raised in January and February of that year. As you can see, we're
under budgeted revenue YTD even compared to the presidential election
year of 2000.
Implications:
There are two fairly immediate implications: (Please refer to the
Balance Sheet Summary Report)
- The Quick Ratio is deteriorating - Starting at 1.3 at the end of
January, it has fallen to 1.1 toward the end of March. Falling below one is a
violation of our current reserve policy.
- Our CD reserve accumulation is slowed - The original plan was to
set aside $25,000 each month for six months in CD's, thereby accumulating a total of $150,000 in segregated funds. Such monthly set asides are thus endangered and we may have to postpone implementation of that plan.
Additionally, our net worth has deteriorated from January end of
$40,479 to the
March end of $17,438. Thus, our prospective 2001 year-end goal of a
networth of
$175,000 is in question. Also, cash and CD's currently exceed
accounts payable
by approximately $12,000. A year-end goal of this excess being at
least $160,000
is also in doubt. This excess has also deteriorated each month
this year.
Suggestions:
- The monthly summary reports to be received by the LNC are a
major step in the
right direction. We will now be able to contemporaneously monitor
such variances and take action before they become larger problems.
- To maintain an acceptable level of operating cash, we may need
to reconsider
our original plan of putting $150,000 into CD's before mid-year.
- Staff should continue to control expenses as much as possible,
perhaps even
exploring here-to-fore unexamined methods.
- Implement any cost saving and revenue-enhancing measures
devised by the
SPT as soon as possible.
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