LNC Meeting of March 2002

Financial Update

Our current, overall financial picture involves mixed results. First, the good: I am pleased to report that, generally, we are in the best "static" financial condition I've seen in my tenure as your Treasurer. The section below entitled "Operating Results" will hopefully demonstrate that a snapshot of our financial health looks fairly good. However, the bad is that revenue receipts in January and February were below budget projections. Thus, our "dynamic" position doesn't look as healthy. The "Budget Variances" section below details these results.

Operating Results

You may remember that January 2001 revenue was almost a quarter million dollars. That figure was not grossly out of line with what was expected. However, February of 2001 represented the first significant revenue drop from prior levels. As the data below demonstrates, February of 2002 represented quite a turnaround in comparison. There are two identifiable reasons for this:

1. Some degree of revenue shifting has unintentionally occurred this year due to the annual report being mailed a little later than usual. Hence, revenue normally received in January may have been postponed until early February.

2. The email appeal for funding the War of Drugs ad represents part of the revenues in the latter part of February.

The net effect is that February overcame a weak January, somewhat of a reverse from 2001. On average, we're at about the same cash flow position we were a year ago for this two-month period. Although far from conclusive, this upturn is a very good sign that perhaps (only perhaps) our financial situation is beginning to stabilize.

Average Receipts per Business Day
		2001	2002
All of January		$11,551	$7,777
	1st half	$10,905	$9,257
	2nd half	$12,035	$6,431
All of February		$7,449	$11,919
	1st half	$10,871	$11,864
	2nd half	$3,267	$11,995
Two month AVG		$9,602	$9,745
	1st half	$10,887	$10,623
	2nd half	$8,343	$8,774

An additional word of caution is in order however. The WOD ad is included in these totals. Thus, this "special" project significantly boosted February totals which somewhat clouds any concrete conclusion.

The "Balance Sheet Changes" below show exactly how our static position has improved through January and February.

Balance Sheet Changes
Report Date->	31-Dec	8-Jan	18-Jan	25-Jan	2-Feb	15-Feb	22-Feb
All Checking	$ 29,086	$ 46,615	$ 12,745	$ 9,241	$ 48,813	$ 25,090	$ 66,091
plus CD	25,591	25,591	25,591	25,591	25,591	25,591	25,619
plus Other	(2,194)	(1,726)	(2,503)	(422)	2,646	2,395	(450)
equalsTot.Near-Cash	$ 52,483	$ 70,480	$ 35,833	$ 34,410	$ 77,050	$ 53,076	$ 91,260
minus Accts.Payable	50,789	62,071	51,491	39,237	8,032	15,194	4,008
equals Calc.Reserve	$ 1,694	$ 8,409	$ (15,658)	$ (4,827)	$ 69,018	$ 37,882	$ 87,252
Quick Ratio	1.03	1.14	0.70	0.88	9.59	3.49	22.77

In early February, the printing charge for the Annual Report was paid. Because the postage was paid in advance, staff was then able to significantly lower accounts payable while generally increasing near-cash. The result is a vastly improved financial position relative to recent months. Notice that the calculated reserve is creeping upwards. This figure must average $85,023 at month-ends for the final six months of this year under the current budget. I will request of staff various measures to be included in monthly reports in order to monitor our reserve position going forward.

Budget Variances

1. Basic Operations
2. Development
3. Marketing, Organizing, Political Action, & Convention

As required by new policy manual changes, our Executive Director also detailed separate yearly and monthly totals for categories 1 and 2 and a yearly total for category 3. Of note, category 3 generally included items related to implementation of our new strategic plan.

Budget Variances (categories 1 & 2)
	Jan	Feb	Total
Budgeted Revenue	$ 215,699	$ 181,699	$ 397,398
Actual Rev.	$ 163,330	$ 226,475	$ 389,805
Difference	$ (52,369)	$ 44,776	$ (7,593)
% of Budg.	-24.3%	24.6%	-1.9%
Budgeted Expense	$ 204,637	$ 173,750	$ 378,387
Actual Exp.	$ 166,001	$ 240,318	$ 406,319
Difference	$ 38,636	$ (66,568)	$ (27,932)
% of Budg.	18.9%	-38.3%	-7.4%
Expected Gain/Loss	$ 11,062	$ 7,949	$ 19,011
Actual Gain/Loss	$ (2,671)	$ (13,843)	$ (16,514)
Difference	$ (13,733)	$ (21,792)	$ (35,525)

The chart above contains actual versus budgeted revenues and expenses for January and February. It is very important to realize that the "Budgeted Revenue" and "Budgeted Expense" figures cover only categories 1 and 2 above. In other words, to make any significant headway on our strategic plan requires revenues in excess of these projections. As you can see from the chart, the year-to-date results put us $35,525 behind achieving our goals for just the first two categories, much less our strategic plan. The implication for implementation of our strategic plan is clear; at the current level of operations, we are unable to fund much if any of our strategic initiatives. Thus, our currently measured dynamic position should be of much concern to all of us.