AIS Treasurer & Finance Committee Update

AIS Treasurer & Finance Committee Update AIS Council Meeting December 2012

Topics • Finance Committee Members • Finance Committee By-laws • AIS Fiscal Year End 2011/12 Financial Statements & Auditor’s Report • AIS Financial Trends • AIS Reserve Status & Analysis • 2013 Conference Budget Review Highlights from Finance Committee • Supplemental Topics • Key Assumption Documents • Membership Dues Rate Impact • Finance Agenda Points (in Block Vote) • 2013 ICIS Conference Budget • 2013 AMCIS Conference Budget • FY 2011/12 Financial Statement & Auditor’s Report

New AIS Finance Committee Members • Matthew L. Nelson, Finance Committee Chair • Dennis F. Galletta, University of Pittsburgh (ICIS Rep) • Eldon Y. Li, National Chengchi University (R3 Rep) • Nancy Pouloudi, Athens University of Econ. and Business (R2 Rep) • Sandra Slaughter, Georgia Institute of Technology (R1 Rep) • VallabhSambamurthy, Michigan State University (AMCIS Rep) • Jane Fedorowicz, Bentley University(President-elect) • Pete Tinsley, (Executive Director) THANK-YOU TO ALL NEW FINANCE COMMITTEE MEMBERS For Limited Distribution Only to AIS Executive & AIS Council Members Only

AIS Finance Committee Roles (By-laws) • Selection assistance with Auditors, Bonding, Officers and Directors Insurance, Investment Committee (if necessary) • Budget Reviews • ICIS and AMCIS Budget Reviews • The scope is at a higher level (not account level), with more emphasis placed on how much surplus is needed from the conferences. • Since conferences are such a large part of AIS Revenues, this funding is critical to driving the development of new and innovative programs through-out AIS. • Make recommendations to council regarding • New initiative proposals • Designate amount of funds available for use in excess of reasonable and necessary for AIS operations (if applicable)

AIS Treasurer Roles “Traditional” Treasurer Roles in Non-Profit Associations • Member of the board • Provides annual budget to the board for members approval • Ensures development and board review of financial policies and procedures • Manages finances of the organization • Administrates fiscal matters of the organization AIS By-laws Alignment • Member of Finance Committee & Council • Serve ex officio on ICIS & AMCIS Committees • In conjunction with Executive Committee • Prepare annual budget for adoption by council • Provide membership with access to audited financial statements • Monitor accounting & business practices of the business office • Forecast revenues and expenses • In conjunction with Finance Committee • Help to assess financial impact of new proposals • Advise on compensation levels of business office • Assist in arrangements of outside audit • Advise / recommend of surplus funds management FML is Free Management Library (http://managementhelp.org/board/)

External Auditors Report Highlights • Independent External Audit Results • Audit conducted Aug ~ Oct 2012 • For AIS Fiscal Year End 2011 / 12 (7/1/11 through 6/30/2012) • Tabb & Tabb conducted the audit, but AIS Management is responsible for the financial statements (council, committees, staff, presidents, ED, ect.) • Thank-youfor prompt responses & participation to inquiries • Report issued September 26, 2012 • The report could not have been more favorable • Continue to be marked “Draft” until AIS Council approves these documents. • Included in Block Vote

AIS FY2011/12Balance Sheet Highlights Notes / Highlights Invested according to Reserve Policy in AIS By-laws (a) 65% fixed, (b) 35% equity (30% in 500 Index, 35% mid-cap index, 35% small-cap index). Unrealized Gain $2k Note 4: Investments in (a) CD/Bonds $400k + Money Mrkt Funds $18k (65%), (b) Equities $223 (35%) ConfAdv/ Prepaid Expenses similar accounts (Accrual GAAP, no expenses booked until conference occurs.) Accts Pay from ongoing operations (short-term), includes amounts for AIS “owned” items (incr. larger AMCIS size.) Amounts Held for Others ($2k LACIS, $5k ANIEI JV, $22k MWAIS, $1k journals). These are not booked as revenue / expense on AIS (vs. AMCIS & ICIS ). Deferred Revenue (Early conf registrations, Accrual GAAP), increase due to faster AMCIS12 registrations (vs. AMCIS11) Undesignated Net Assets (Net Asset Balance & Net Rev Ops $11k.) No Restrictions in Net Assets, but there are Designations (SIGs $195k, NIF $72k, Working Capital Operations Designated $364k)

AIS FY2011/12 Income Statement Highlights Notes / Highlights 62% of Direct “Revenues” from AMCIS & ICIS 5% of “Revenues” from AIS Level Sponsorships 20% of “Revenues” from annual AIS membership In-Kind Contr $15k GSU office space (THANK-YOU GSU!) + $100k FUDAN office space ICIS11 60% of expenses from AMCIS & ICIS .5% “return” on revenues in 2012, vs. 17% in 2011 (2012 was a break-even fiscal year for AIS) The FY 2011/12 Budget was $9,625. AIS exceeded budget by $279! Within .015% of Budget.

AIS 12-Year P&L Financial Trends • Notes on Data Sources: • 2003-04 data through 20011-12 data taken from Audited Financial Statements. • 2012-13 Taken from AIS Financial Reporting Budget, with NIF Activity included • 2001-02 data and 2002-03 data taken from pro-forma budget spreadsheet with estimated conversions from calendar year to fiscal year reporting. Note Cycles of Year-End Budget Surplus / Deficits over the 12 Years

AIS 12-Year Revenue Trends (By Service Lines)

AIS 8-Year Expense Trends (By Service Lines)

AIS FY2011/12 Budget Vs. Actuals (Monthly Financial Reporting by LOB)

AIS FY 2012/13 Approved Budget • Updated based on approved motions from June 2012 Council Meeting • Fiscal Year July 1, 2012 through June 30, 2013 • Council agreed to fund the deficit through Operating Reserves (cash reserves, not long-term)

Call for New AIS Initiatives 2013/14 “Call” for New Initiative Requests • Part of Annual AIS Budgeting Process • Call out on February, 2013, two ~ three weeks to respond • All new initiative proposals should include; • Estimated cost • Estimated new revenue (if any), • Related benefit statements that show how the initiative supports the mission of AIS • Sample Separate Attachment • Accepted on an ongoing basis! • Recent e-mail to AIS President… Why doesn’t AIS maintain a central location to virtually store all major literture review publications by research stream December 14, 2012. For Limited Distribution Only to AIS Executive & AIS Council Members Only

New Initiative Fund Status

AIS Treasury Update Reserves Levels vs. AIS Reserve Policy ‘Checks’ Consider increase to reflect more recent fiscal year expense trends $427,284 (3-month working capital from FY2012/13 approved budget) December 14, 2012. For Limited Distribution Only to AIS Executive & AIS Council Members Only

AIS Treasury Update Reserves Levels vs. AIS Reserve Policy ‘Checks’ December 14, 2012. For Limited Distribution Only to AIS Executive & AIS Council Members Only

Topics • Finance Committee Members • Finance Committee By-laws • AIS Fiscal Year End 2011/12 Financial Statements & Auditor’s Report • AIS Financial Trends • AIS Reserve Status & Analysis • 2013 Conference Budget Review Highlights from Finance Committee • Supplemental Topics • Key Assumption Documents • Membership Dues Rate Impact • Finance Agenda Points (in Block Vote) • 2013 ICIS Conference Budget • 2013 AMCIS Conference Budget • FY 2011/12 Financial Statement & Auditor’s Report December 14, 2012. For Limited Distribution Only to AIS Executive & AIS Council Members Only

AMCIS 2013 Budget Review High / Medium / Low Scenarios / Models Expense fluctuations based on attendance levels Approved by 1st Round by Finance Committee. FC Requested to meet week prior to go-live conference registration dates to review registration rates (in light of sponsorships, expenses, etc.) All scenarios earning favorable returns, comparable to AMCIS 5-year run rates. December 14, 2012. For Limited Distribution Only to AIS Executive & AIS Council Members Only

ICIS 2013 Budget Review High / Medium / Low Scenarios / Models Expense fluctuations based on attendance levels • Change Highlights based on 2nd Round Review w/ FC • Reduced Facility & Transportation expenses (Bocconi) • Reduced Registration Rates • FC Requested to meet week prior to go-live conference registration dates to review registration rates (in light of sponsorships, expenses, etc.) • Review & Approved in 2nd Round by Finance Committee All scenarios earning favorable returns (meeting 5-year run rates), and maintaining significant $ surplus contributions December 14, 2012. For Limited Distribution Only to AIS Executive & AIS Council Members Only

Membership Dues Change Impact

Membership Dues Rate Changes Incremental Impact Only of Dues Increase • Amounts already reflected in AIS FY2012/13 Budget • Dues in certain Non-Very High categories were phased in during 2012, based on council decisions in June 2011

Key Assumptions Document

Key Assumptions Document - Background Typical Conference Budgeting Challenges • 3 to 4 years in development • 13 supporting spreadsheet “tabs” with detailed calculations and assumptions • Hundreds of general ledger accounts & sub-account entries with supporting estimates • 3 Year Gap with minimal Review by Council & Finance Committee • At the point of bid…. A high-level budget is reviewed with conference committee(s) and AIS Council at the bid • Not typically seen again by Council nor Finance Committee until the December prior to the conference date • At the point of bid review and vote, committee members were asking outstanding questions • But most answers were not readily accessible to committee members

Key Assumptions Document - Background Typical Conference Budgeting Challenges • Standard Reporting • 3 lines • Multiple years • Versus (Needed Something In between 3 lines and tons of detail) • Detailed Budget Development • 3 ~ 4 years in development • 13 supporting spreadsheets • Many GL accounts & subaccounts

Key Assumptions Document – Initial Purpose • Work in Progress • Response to Dov’s call for greater conference governance • Initial aim track a conference’s budget 3-years out, 2-years out, 1-year out • Single Page, Highlight 7 ~ 8 Key Assumptions (only) that account for 70% ~ 80% of conference expense & revenues • Based on what is used in industry for large capital expenditure new initiatives (events) • One-page Summary of Key Project Assumptions (to avoid weaving through tons of supporting detail ) • Primarily used during committee / board member project reviews & approvals • Initial Draft • Location, Est. Attendees, Registration Rates • Sponsorship Estimates & Qualified Contributions (if any) • Social Event & Welcome Event (Identify important T&Cs of these contracts) • Facility Expenses (Identify important T&Cs of these contracts) • Food Expenses (Identify important T&Cs of these contracts)

Key Assumptions Document – Enhanced Purpose Over Time • Initial aim track a conference’s budget 3-years out, 2-years out, 1-year out • Modified to track multiple conferences over time (prior 4 ~ 5 years) • Dropped notion of tracking the same conference over time • Single Page & Highlight 7 ~ 8 Key Assumptions that account for approximately 90% of revenues and 55% of expenses • Updated Draft • Location, Est. Attendees, Registration Rates • Sponsorship Estimates & Qualified Contributions (if any) • Social Event & Welcome Event (Identify important T&Cs of these contracts) • Facility Expenses (Identify important T&Cs of these contracts) • Food Expenses (Identify important T&Cs of these contracts) • Added Exit Clauses / Strategies • Never became ‘official’, simply Work in Progress to see how it would evolve or may be used

Key Assumptions Document – AMCIS

Key Assumptions Document – ICIS

AIS Treasurer & Finance Committee Update