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IEEE Finance Review 2012 Preliminary Actuals vs. Budget Analysis

This review provides a detailed comparison of the 2012 preliminary actuals versus budget in terms of revenue, expenses, reserves, and spending rules for the IEEE organization. It highlights major variances, reserve risk requirements, and the allocation of funds for new initiatives. Additionally, it discusses budgeting and spending guidelines for the NPSS section and poses important questions about the allocation of initiative funds to different stakeholders.

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IEEE Finance Review 2012 Preliminary Actuals vs. Budget Analysis

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  1. IEEE Finance Review Harold Flescher NPSS FinCom Chair

  2. 2012 Preliminary Actuals vs Budget(Unaudited) *Net Budget includes: Interactive Content Project, Initiatives, R1-6 Strategy

  3. Major Variances • Revenue • Primarily unanticipated IP revenue (ASPP-AICTE (India)) ~$5.5M • Sections Revenue (revenue for sections not included in budget)* • Expense • Regions/Sections expense not carried in budget* *Offsetting

  4. IEEE Reserves • Prelim. 2012 – $269.8M • Reserve Risk Requirements – • Upper Limit - $307.1M • 70% point - $215.0M • Above the 70% point, the BoD may approve reserve spending rules

  5. Reserves • So we have great reserves. • Does this matter if we can't use them?

  6. Spending Rule • The BoD has approved the budgeting of 4.5% of IEEE Investable Assets (LT Inv Fund) to be used for new and continuing initiatives • Up to 1.5% for History Center, Awards, Honors Ceremony, IEEE Foundation and Fund Raising functions • Up to 2% for New Initiatives Committee • Up to 1% for OUs with balanced budgets whose reserves exceed 50% of annual expenses • For individual S/Cs, each may budget up to 3% providing the integral of all of TAB not exceed the 1% number

  7. What this means to NPSS • Budgeting - For Budgeting Purposes, we may budget for initiatives in the following year up to 3% of our reserves. What this means is that in any single year, we can have a negative budget of up to 3% of our reserves • Spending - Within any year, we may spend up to 50% of our previous year’s Operational Surplus (actuals positive to budget excluding investment returns ~300k). This spending will be shown in the ongoing forecasting process and does not impact future budgeting.

  8. Discussion • Given that increasing initiative money (normal and special) will be used in the future, who are the right people to use that money: • Those closest to the members who earn the money? • Those closest to members who don’t earn the money? • Higher level elected volunteers and staff who are furthest from our members?

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