GGR 2019 Financial Statements
Following the example set by the Porsche Club of America national office (see pages 132-135 of your latest, July Panorama), the GGR Board of Directors resolved last February to publish the club financials on an annual basis. Those financials are attached to this blog post as a PDF.
As I’ve related in this column throughout the year, there were a number of challenges faced in the beginning of the year. We needed to clarify governance roles, accountability, and transparency at the board level. We likewise needed transparency in the club financials and budgets, which were near-impossible to decipher due to accruals and allocations. Lastly, we needed to get a handle on what was going on in the track series.
To meet these challenges, we developed and the Board adopted a formal club financial policy which lays out the roles and responsibilities. It is brief, succinct, and clear by design (only 2 pages long) and can be summarized even more briefly:
- All proposed expenditures need to be written up in a budget and submitted to the board for approval before any commitments or expenditures are made.
- The Vice President keeps the approved budgets. When expenses come in, the VP checks if they’re covered under an approved budget and, if so, approves them for payment.
- The Treasurer handles the accounting, cash flow management, banking, and financial statements, including creating and categorizing checks.
- The President only signs the checks after okayed and processed by the VP and Treasurer.
- All this gets reported back to the board.
A number of people pitched in to clean up the club financials and draft the financial policy, including past Treasurers Joe Ramos and Larry Adams, current Treasurer Canyon Chan, myself, and an outside CPA (to make sure everything was done correctly).
A key part of this was converting GGR from an accrual to a cash basis of accounting. For an organization like GGR where revenue receipts and associated expenses occur within a few months, drawn-out accruals and allocations didn’t reflect reality and obscured what was really going in. The attached, cash-basis 2019 financials present a clear picture of what the club took in over the year and what it spent. For almost all club activities, you can see everything the club received and spent on it. The only exceptions are New Year’s Party and Annual Awards Banquet where some expenses and receipts occurred in 2019 and some in 2020. (Note: for all events, the Board also reviews a budget versus actual report which includes all expenses and revenues for an event for regardless of when they occur.)
The challenge faced with the track series is also clear. Track Chair Jim McClelland has taken the charge to bring the track series in this year on a break-even basis and the Board has been watching closely. With the event cancellations this year, our first track events are just now coming up but, as of now, the numbers look good for breaking even.
For questions about the financials, please email the entire Board (which includes me!) at firstname.lastname@example.org. The Board takes very seriously its responsibility to manage the club and its financials responsibly, and its responsibility to the members. We value and appreciate all member feedback and inputs.