2014 Final Accounts

These are the final accounts for 2014, as presented in the AGM order paper for Harrogate.. The Treasurers report to the AGM is also repeated below, and should be read in conjunction with the financial statements.

If you have any questions or queries, drop me a line and I will try to answer them before the AGM to save time there.  You can find those already asked at the foot of this page.

Treasurers Report 2014 

My report for the year follows. Although you are of course welcome to ask any questions of it at the AGM, I would prefer you to ask them prior to it by email. This isn’t an attempt to hide anything, but it will enable me to answer them properly. The alternative is that I make something up on the day, delay proceedings while I find a proper answer, or both. 

2014 Accounts 

During the year we embarked on a major IT project to replace the existing website, which is ten years old and showing it’s age. This has had a significant effect on our finances, as you would expect. The total cost for the year was £38,670, which has been capitalised and will be depreciated over 3 years, reflecting the long term benefit to 41 Club. The project covered the main website, which by the time you read this report should be live, the conference website and integration into CAS. 

An additional IT project has also been capitalised, a database to manage the details of ex-Tablers who haven’t joined 41 Club. This makes use of data provided by RTBI, and will allow us to target these individuals with a view to bringing them back into the fold. The cost of this was £5,400. 

The 2014 accounts contain 6 months depreciation on both of these projects. As the budget which was set prior to these developments being approved by National Council it has resulted in a significant overspend. 

Other variances of note are: 

  • AGM expenditure included £5k for the webcasting of the AGM and the electronic voting trial. Without this, which again was not budgeted for due to the timing of our AGM / financial year, there would have been a £3k underspend on this budget
  • The loss of Hyundai’s sponsorship of the Presidents car means we have had to dip (£3.3k) into the contingency fund set up during 2013 to cover such an eventuality. This is held as part of our general reserve, and will cover the cost of the car in 2015 as well.
  • An overspend of £5k on Council Meetings was caused by the late cancellation of the October meeting, due to the clash with Vaughan Harris’s funeral.
  • Membership promotion has also been overspent. The spend includes two years of Wider Wallet subscriptions (2013 having been billed to us at £1.20 rather than £1200), postage costs associated with mailings to ex-Tablers who haven’t joined 41 Club, and expenditure on promoting the four families in Ireland. Round Table Family Eire (RTFE) has been championed by Phil Ellis, who I’m sure will be telling you about his many successes in his report.
  • Archiving shows an underspend (it’s not all bad news). This is due to the scanning company repaying a credit note we were holding against future needs. When the initial project was completed, it was envisaged that there would be further scanning to do each year, but of course as all correspondence is now electronic this need has evaporated.
  • After a couple of years of price reductions on old stock, we have bitten the bullet and written off the remaining items. These include redundant items such as car tax disk holders along with slow selling items (Presidents pin badge anyone?). The items still physically exist, but will be sold on a best endeavours basis by Barry Durman, our resident spiv, with any income being treated as a bonus.
  • Capitation is down by £7k. This is due to clubs disaffiliating in the 21 months since the budget was set. There is also a number of clubs which hadn’t paid their 2013 capitation but were included as debtors in that years account, as they had indicated that they intended to remain affiliated. While some were true to their word, there were a number which disaffiliated this year. For that reason, of the 10 clubs that are yet to pay their 2014 capitation, I have only included two as a debtor, as they had paid by the time of this report.

I have often wondered why the Income & Expenditure Account is presented as it is, with no budget to allow easy comparison against the actual spend. I suspect the answer is, like so many things, “because we’ve always done it that way”. Well, not any more! Hopefully you will find that useful, if not it at least it should make the figures so small that you can’t be bothered to read it and ask questions …. 

So, without further ado, Appendix D contains the I&E account and Balance sheet for 2014.

The financially savvy amongst you may have noticed the large drop in reserves this year, which is mainly as a result of the expenditure on the new website. Whilst it is larger than I had anticipated, it still falls within the parameters of the reserves policy, and the reserves will increase over the next couple of years as the effect of the depreciation works its way through the accounts. To illustrate this, I have also produced a cash flow statement for 2014-16, based on this years’ accounts, the 2015 budget and the proposed 2016 budget. (Appendix D)

I would stress that any rumours of impending financial meltdown by the more pessimistic members is unfounded – I’ve reproduced below an excerpt from the reserves policy, which can be found on the Treasurers page on the website.

“To keep the club financially stable, it is important that we maintain a level of reserves sufficient to meet our continuing obligations. Based on the information to hand, our main items of expenditure are:

Magazine £12k per issue - April, July, November 

Insurance renewal £10k - February 

Meetings £35k – Feb, April, June, October, includes expenses 

RTBI Admin contract £2.5k monthly 

Insurance must be purchased, and we are in a 3 year contract with round Table for the Admin the cost of which is charged on an hours used basis. We are required to hold an AGM and 3 NC meetings, so these need to be covered as well. The magazine, although budgeted for, is classed as optional expenditure – if we hit a financial crisis, it could easily be pulled / delayed. Other items of expenditure, including expenses, could likewise be delayed with no reputational loss. Note that this would reduce the cost of the AGM / NC meetings by the weekend allowance and mileage of all who attended, bringing the cost of them down to less than £10k.

So this leaves us with a minimum reserve level of £50k, to cover insurance (£10k), the admin contract (£30k) and meetings (£10k). To allow for a margin of error, it is recommended that an additional 20% contingency is allowed, i.e. £60k in round figures.” 

The Financial Reserves policy at this level was reviewed and approved by National Council in February 2015.

The accounts have been inspected by Duncan & Toplis, our independent examiners, and their statement can be found on page 37 of the Agenda.

Mark Fairchild 

National Treasurer


Q&A


We’ve had some questions on the accounts which may be of interest to you, so I have replicated them below, along with the answers of course!

(1) Can you provide a breakdown of the capitalised IT spend between the new website, conference website and CAS, which totalled £38,670 ?

Main website - £32,510.62

Conference website - £3,872.18

CAS API Interface – £2,287.20

The latter is the interface between CAS and the new website, there were no changes to CAS itself.

(2) A database of ex Tablers who haven't joined 41 has cost £5400. I would like to know how this was spent, how many names are on it and the success rate of bringing people back to the fold.(ie cost per success)

The data didn't cost us anything from RT. The money was spent on the development of the database, import / export facilities and links to CAS (there is a more precise description I'm sure, but I don't have access to it).

The initial data was approx. 53k names. These were filtered down to those with valid looking email addresses (12k from memory), who were then contacted by email and given the option of opting out - a few did. There were also some whose emails bounced. All of the remaining ones were loaded into the database (11k). These have now been assigned to the NC's to work through, which is an ongoing process (started the beginning of March). They have been asked to include progress in their reports for the NC Meeting at Harrogate - we should then have a better idea of how it is going.

(3) Membership promotion was overspent by £3660 (Budget £10K-Act £13660) Some of this was said to be spent on Wider Wallet and Promoting RT Family in Ireland. Please let me know specifically how much in total has been spent on each of Wider Wallet and Family promotion in Ireland. How many members used the wider wallet and by how much did they benefit. How many 41 club members are there in Ireland?

Wider Wallet costs us £1200 a year - in 2014 we paid the 2013 fee as well (I think I mention it in my report, but basically we got sent an invoice for £1.20 in 2013 which I paid without thinking about it, but should have been £1200 !)

From the latest MI reports, there are currently 366 users, who have redeemed 1,107 offers. Of these, the majority are for the Sainsbury’s cards (save 4.5%) and Asda (save 4%), with M&S (5%), B&Q (7%), Boots (6%) and Argos (6%).

We don’t have any information on the amount members benefited by, but I’ve covered my capitation for a few years with the savings on a wood floor at Homebase !

We spent £1,426.18 on RTFE. The idea behind it is to help all four clubs in Ireland.

41 Club – 13 clubs, with 200 members (3 new this year)

Round Table – 5 Clubs, 49 members, with a new club of 6 members being chartered in Belfast on 18th April (along with another 9 members for the existing Tables)

Tangent has 90 members (5 new this year)

Ladies Circle now has its first club with 8 members

More Q&A's .... albeit in a slightly different format.  My answers are in italics :


I note form the AGM papers that you are encouraging queries by email prior to the AGM.

So my questions to you centre around the expenditure on IT. You said: “The total cost for the year (2014) was £38,670, which has been capitalised and will be depreciated over 3 years, reflecting the long term benefit to 41 Club”.

1 What has been the accounting policy for Depreciation? Your notes say write off over 3 years. Has this always been the case and if not, when did it change?
Always been 3 years (or rather, when I did my first set of accounts for 2012, Duncan & Toplis picked up that I hadn't capitalised that years expenditure, and recommended that it was depreciated over 3 years as it had been previously).

2 What is the expected TOTAL cost of the IT upgrade (upgrades if more than one project)? What was the original budget?
Difficult one to answer - the website has had a small amount of tweaking this year. Because of the way we set budgets so far in advance, when 2015 was set we hadn't agreed to replace the website, but I had allowed for £5k of IT spend in the budget based on previous years. The next project will probably be to replace CAS - that is dependent on some of the AGM resolutions and the new governance arrangements. No idea of cost as we don't know the spec, but I have allowed for the depreciation of a 20k project in 2016 budget - this was a real finger in the air guesstimate.

3 If £38,670 was spent on IT in 2014, what is the total written down value of all IT equipment at the end of 2014?

Net book value for capitalised IT spend is 38,970 at end of December 14. This is made up of the 2012 IT spend (2,170), this years spend (36,798) and £2 residual value for previous projects (Office 365 / Sharepoint)

4 At the beginning of 2015, what is the expected cost to finish the IT project?
See answer to Q2 - for the website, approx £5k. Future developments unknown until they are scoped.

4 Is the Depreciation budget for 2015 (£9000) and 2016 (£18000) just for IT Equipment? How do these budgets relate to the answer to items 3 and 4 above?

I see you are trying to confuse me with two Q4's :)

Mainly for IT - the only other assets we have are the presidents jewel (£3,983 cost, NBV £2,831) depreciating on a 5% straight line basis, and an LCD Projector (cost £583, NBV £199, 15% s/l depreciation)

5 Eric Peacock indicates in his submission that the IT project is not yet completed and that a further £20k is required to finish the job. Do you concur? (Sorry, you may have answered this under item 4).
the 20k figure is probably my marker for the CAS replacement. Again, can't cost it as it hasn't been scoped. I wanted to put something in however as whatever we spend will increase the depreciation, which leads us on to Q6

6 If another £20k is required, how does the Depreciation budget of £18,000 for 2016 stack up?
The 18k assumes we spend the £20k in 2016 - the depreciation charge for that year would actually be £18,067.

The answers above led to a further flurry of questions - due to constraints in my real job, I haven't had time to edit them and the questions to present them more logically, so here they are in their entirety ...

What is becoming clear to me is that there may have been a lack of control in expenditure. I fear you are becoming the scapegoat in that you are reporting the figures and are therefore seen as being responsible for the expenditure (or at least the perception might be that you authorised it). In my opinion it comes back to your brief as Treasurer. Does the National 41 Club Treasurer have control of the purse strings, or is his role more like that of an auditor, i.e. to report? I am not privy to what the accepted brief of a National 41 Club Treasurer is. Perhaps one is not defined? What is your view as to your brief? Do you have financial control such that contracts cannot be awarded without your authority?

Along with the Asset Schedule, please provide any information you have as to how programed IT expenditure was notified to you. Were you notified prior to the placing of contracts, or after work was done on behalf of the Association, i.e. by a request for you to pay an invoice?

I guess what’s done is done. If there is a lesson to be learned I guess it will be to put procedures in place such that Officers on the Board are not able to incur expenditure without Board approval and sanction by the Treasurer. I can see why some might think the adjustment in Reserves from £100k to £60k during the year and without presentation to the AGM might be seen by some as a cover-up.

And my response :


The IT spend was agreed by Board and Council, although when it was agreed the estimate was ?26k for the main website (from memory, it will be in the council minutes somewhere). I wasn't on the committee overseeing the development, which was a mistake in hindsight. The first I knew of the overspend was when I paid the invoice which took it over the estimate, we then got a revised (capped) estimate for the remaining work which was agreed by the board and I think notified to Council (again minutes should show this). The overspend was compounded by the quote being ex-vat, and of course as we aren't vat registered we can't reclaim it....

Any additional spend (on anything) will be discussed and agreed by Board / Council - my input is to advise on whether it can be contained within the budget, or whether it will need to be funded from reserves, or of course to not spend it ... it does happen sometimes.

I suspect there is a "job description" for the Treasurer somewhere, although I confess I have never read it.

We have very few contracts - one with RTBI for the administration by Marchesi House, one with Technos for the CAS system and microsoft licences, and now I assume one with Toucan for the new website. There will also be some signed for conference, although that is self funding. Manny will physically sign them (Nat Sec), after checking them with Paul Camiss (Hon Solicitor). The first two have been in force since before I took office, I just check for any price increases when setting the budget. Any new contracts would be agreed by Board / Council.

I think the last thing to clear up is the reserves conspiracy theory. When I took over as Treasurer, we didn't have a formal reserves policy as far as I know. I was advised to "keep it over £100k" as that was effectively six months spending at the time. Rather than just accept this (I dislike "because we've always done it that way" as a reason for continuing to do anything !) I looked at what expenditure we would be committed to. You can see the rationale for this on the web pages. The figure worked out to be £51,653 based on 2012, which I added a 20% contingency to and rounded it to 60k. We finished the year with £121k in cash.

In 2013, the same calculation gave £49,979 - again, with 20% it rounded to 60k. We finished the year with £113k in cash

For 2014, the figures are £54,196. With the 20%, the reserves needed should be 65k rounded, but I know that the AGM was expensive, so rather than amend the policy for a single year I have left it as it has been for the last 3 years.

I've never been one to cover things up - if I make a mistake I'm happy to put my hand up and take the flack. It does annoy me though when members dream up scenarios which fit the circumstances rather than just ask a question. After all, it's not my money, it's all of ours !

There was then one final query, regarding IT spend.

Please advise the annual cost of IT software support/maintenance since 2012. Do such costs show as an expense?

Please advise the expected cost of IT software support/maintenance for future years, when the new IT system is installed and fully operational?

To which my response was :


Attached spreadsheet <schoolboy error, on my work PC, will load tomorrow !> shows the it spend for 2012 – 2014. I’ve analysed it by creditor, from my cashbook entry, so not loads of detail but should be sufficient with the notes below to answer Q1.

Q2 is tricky, as we are in a state of flux – it sort of depends on how far into the future you want to look. If you mean after the website development has finished (which will be done this year, although full year costs won’t make an impact until 2016), then the cost will be broadly the same – approx. £15k a year, which allows for some minor development / tweaks.

If you mean after CAS has been updated / replaced, then that depends on how that is achieved, and whether the move to an organisation of individuals rather than an organisation of clubs (as in the 5 year plan / governance recommendation) gets approved. Potentially, there will be scope to reduce our maintenance / support costs, although there will be a capital cost for CAS2 or whatever we call it.

In my real life, however, I’m acutely aware that promised savings from IT projects rarely materialise !

We will be looking at our use of Office 365 / SharePoint before we renew in August this year, with a view to reducing the number of licences, which will give us some saving on the £3.4k we paid last August.

The hosting service is currently provided by Technos for CAS, and has been at this level since I’ve been Treasurer, but I don’t have a feel for how cost effective this is.  It's a moot point really, as CAS was written by Technos, so the two are interlinked anyway.

Notes to spend analysis

Microsoft payments are for Office 365 / SharePoint – provides each Board member and National Councillor a licence for Word / Excel / PowerPoint etc and a cloud repository.

Postcode anywhere licence enables postcode checking / address confirmation within CAS

AuthSMTP is used for mass mailings – stops them being rejected as SPAM. We needed additional quota in 2014 due to increased traffic and lack of co-ordination between Board members, this has now been ironed out …

Toucan – provide our new website. Maintenance / hosting costs are still being finalised.

Information commissioner – licence for members details we hold

Technos – host and support for CAS, domain names, email system, membership database and old website. From Aug 2014 we also purchase m/s licences from them at a discounted rate (they are now an approved reseller).

Others are odd bits of expenditure :

Martin Green – mileage for a meeting with Technos

David Hewitt – domain names and software used by him as Hon Webmaster

Manny Martins – memory for laptop to run meeting presentations (from memory !)

D Henderson – expenses for presentation to Board when choosing new web site provider

Ray Hill – payment for conference database developed by Ray