USFA Election 2008 Debate Question #8: USFA back payments

[telkanuru]

Can we afford the sacrifice, though? International attendence is international experience is international results. Yes, our current top fencers can still make the results, but we're hurting the next wave of talent by limiting attendence. Hurting the next wave of talent hurts our bottom line further down the road.

[peet]

Can we afford the sacrifice, though? International attendence is international experience is international results. Yes, our current top fencers can still make the results, but we're hurting the next wave of talent by limiting attendence. Hurting the next wave of talent hurts our bottom line further down the road.

This is true in general, but in the first year of a new quad, perhaps it's a livable sacrifice.

-p

[epeemike81]

This is true in general, but in the first year of a new quad, perhaps it's a livable sacrifice.

-p

those people who are Cadets in year one of the quad may develop into top seniors by the last year in the quad, and those who may (with international experience) end up at the top of the senior list may not currently be at the very top of the cadet list and might be affected by the cuts notalent suggests. To use a common metaphor, by limiting what we throw against the wall, we're limiting the opportunity for something to stick.

-m

[fluidfencer]

This does not appear to be an either/or situation. Unfortunately, I haven't studied or seen the USFA financial statements to know the extent of our needs. If we are really strapped for cash, a "balanced budget" doesn't begin to solve the problem (and I know Greg is aware of this), since you have to pay down debt and build your cash reserves to a safe level.

So, an analysis of our situation will determine the need for an increase in fees. We don't have the structure to support fundraising yet (as was noted above) so we can't count on it in the short term. In order to include fundraising as part of the budget, we need a clear plan for operations and goals of the USFA (I certainly won't donate money if I don't know if it will be spent wisely), and then I have to be ASKED to donate by someone whose task it is to do so. I haven't got piles of cash laying around but, if you give me a good case for doing so, I could easily be talked into donating an amount well in excess of my annual dues.

That said, I would like to explore the idea of giving by the membership as an alternative to increasing membership fees. This could be in either a straight up charitable contribution to the sport, or via plea for increasing the number of life memberships. Anyone with a multi-year experience with fencing knows that it inspires passion among its participants. Many are successful professionals that already contribute to charities regularly. Has anyone on the NC slate seriously discussed either of these ideas as useful supplements to making up the difference without a substantial jump in membership fees?

[breaks out his checkbook]

Thanks,

Dave G.

[Greg_D]

That said, I would like to explore the idea of giving by the membership as an alternative to increasing membership fees. This could be in either a straight up charitable contribution to the sport, or via plea for increasing the number of life memberships. Anyone with a multi-year experience with fencing knows that it inspires passion among its participants. Many are successful professionals that already contribute to charities regularly. Has anyone on the NC slate seriously discussed either of these ideas as useful supplements to making up the difference without a substantial jump in membership fees?

[breaks out his checkbook]

Thanks,

Dave G.

Hi Dave,

We've spoken to a number of development professionals over the course of the last few months to understand what is going to be required to set up a robust fundraising program. My understanding from those conversations is that it takes some time to put an appropriate structure into place and that it's generally unreasonable to expect immediate responses. That's why we need to have professional development director in the office who thinks and works on this full time. Unfortunately, I don't think that we can plan to see results in the first year. As I mentioned in my post we've planned for higher levels of giving in previous budgets. It's never come in. I do believe that our commitment to put in the necessary structure will help over time, but I won't be comfortable budgeting it in the next season and maybe not even in the season after that.

In my opinion, we need to develop budgets and plans to pay off our debt and clear the books by the end of the 2009/2010 season. I'm going to work to make that happen. I further believe that it makes sense to try to do it by about 1/2 each year. Thus, I'll be preparing budgets that will clear 1/2 of our anticipated year end (the 2007/2008 season that ends in July) deficit by the same period next year. If donations come in now that lessen the debt we'll need to make fewer hard choices and sacrifices. If additional donations come in next year we might be able to loosen the reins a bit in the 2009/2010 season.

I'm sure that others could come up with a different plan. I've laid out the one that meets with the approval of all the nominated officers and that I feel is reasonable and achievable. However, I've really only laid out the framework. The specific cuts to costs and increases to revenues still need to be determined. I think that there is significant benefit in getting many perspectives and points of view about what would make sense for the budgets of the next couple of years. If you have an idea either drop me a PM, send me an email (r_greg_d1@yahoo.com), or give me a call 617-947-5012. I'm happy to take all the suggestions I can get and will attempt, with the rest of the Budget and Finance committees to come up with something that will balance our need to be financially responsible with the specific needs of our different types of fencers and their support systems (coaches, parents, referees, etc.).

That said, please, if you can, send a check to the USFA. We can really use it right now and the funds we get will either go to continue to support our team to the Olympics this year or will go to pay someone who has already supported that effort throughout the year.

Greg

[keith]

Can we afford the sacrifice, though? International attendence is international experience is international results. Yes, our current top fencers can still make the results, but we're hurting the next wave of talent by limiting attendence.

Agreed.

Hurting the next wave of talent hurts our bottom line further down the road.

This however seems a false assumption.

On another front the controls outlined seem to be missing how expenditures will be controlled.

Are there going to be hard caps? What will happen should a program 'accidentally' exceed its cap? Should those running (or benefiting) from a program have any personal liability for overspend?

[peet]

those people who are Cadets in year one of the quad may develop into top seniors by the last year in the quad, and those who may (with international experience) end up at the top of the senior list may not currently be at the very top of the cadet list and might be affected by the cuts notalent suggests. To use a common metaphor, by limiting what we throw against the wall, we're limiting the opportunity for something to stick.

-m

I hear you, but something's got to give. Then again, I'm no expert about international programs, and I'm certainly not in a position to weigh the full spectrum of the USFA's financial priorities.

But if every part of the USFA is asked to take part of the pain, maybe that's the international programs' part?

I dunno.

-p

[telkanuru]

This however seems a false assumption.

On another front the controls outlined seem to be missing how expenditures will be controlled.

Are there going to be hard caps? What will happen should a program 'accidentally' exceed its cap? Should those running (or benefiting) from a program have any personal liability for overspend?

I disagree. If our top fencers do not do well, we lose the interest of the USOC and the media market, which is a vast pool of revenue that we have just begun to be able to tap. Do you think it a coincidence that we're getting more media coverage as we finally start to get some gold medals?

[keith]

I disagree. If our top fencers do not do well, we lose the interest of the USOC and the media market, which is a vast pool of revenue that we have just begun to be able to tap. Do you think it a coincidence that we're getting more media coverage as we finally start to get some gold medals?

...but the USOC monies are separate funds, it is the USFA budget that is in a hole. As to more media coverage - where?

I think Greg_D is correct that it would be foolish to budget based on increased revenue from wishful sources. After all the last gold medal might have been presumed to drive new revenue; yet here we are.

[teacup]

If the expectation was to pay overdue expenses from NAC's, I do not know the details, but I can't imagine that the April NAC made a huge profit on a four day event with 44 strips, refs, etc. seeing the number of fencers that attended.

Now maybe it did make money but even so, when it was realized that the April NAC was going to be small relative to the venue and strips, etc, why didn't the TC suggest adding a Div IA or other event to make additional revenue?

[Greg_D]

For instance, there are training grants specified based on an athlete's performance on the international circuit in the previous calendar year. These grants haven't been paid, either, even though they were due in January, according to the NO. What happened to the money that should have already been set aside for these known items?


You mentioned the new formula for Performance Grants a couple of times. Who is proposing a new formula, and what are the preferred changes? I would also characterize a bill for a day spent refereeing and a Performance Enhancement Award slightly differently. The ref is waiting for money to reward him for his service. The PEA person is waiting for money that has already been spent, and needs re-imbursing. The financial impact is significantly different...which makes me ponder why refs from Atlanta have been paid, but PEAs from before Richmond 2007 have not.

Refs and others: I know you want to be paid, as well. I stand here in solidarity, a Tommy Smith-style Olympic salute with moth-stuffed checkbook thrust high in my gloved, clenched fist!

In the grand list of things I don't know yet is included how the office determines whom it is going to pay first out of the very long list of people/organizations that are owed. This was part of the reason that, in addition to the Budget* committee, we established an Audit committee. I've been in contact with members of that committee and know that they are examining the details behind the various higher level accounts. Should I be elected Treasurer I'll work to get additional details and will be able to understand some of those individual decisions.

(At this point, at the cost of harming my relationship with my colleagues on the FOC and with referees everywhere I will state that my personal preference is to prioritize reimbursements at the cost of honoraria. Thus, if coaches, athletes, or officials - particularly those going overseas where they pay for their own hotels and such - are actually getting reimbursed for expenses they've paid from their own pocket those should come first and per diem and honoraria a little later...)

As to the performance grants... this is a line item in the budget that has ALWAYS - for as long as I can remember - come in at a higher expenditure than was budgeted. In the 2006/2007 season, expenditures were over five times the budgeted amount. As a member of the Budget committee, I attended an HPC meeting earlier this year and expressed my frustration with that fact as a BOD member and as someone who is at least partly responsible for preparing the next budget. They appointed a task force to examine the performance grants, to stress test them against previous results, and to come up with formulas that are more likely to result in actual expenses coming in at the budgeted amount. Thus, the new formulas mentioned. I don't know what they'll be and am, at this point, trusting that they'll work.

Greg

*For any further posts that I make in this thread I will use the term "Budget committee" in lieu of the longer "Budget & Finance committee."

[tchwojko]

What about paying a percentage of what's owed, sooner rather than later but to a broader audience?

Those who went over budget, don't get immediate fully reimbursement, and those that put in effort get something for the time being?

That complicates the logistics, but might make more people at least less unhappy?

[keith]

As to the performance grants... this is a line item in the budget that has ALWAYS - for as long as I can remember - come in at a higher expenditure than was budgeted. In the 2006/2007 season, expenditures were over five times the budgeted amount.

Of course in this case - projected revenue not meeting actual revenue - you should take a leaf out of the NIH's book and just cut everyones grant by the required percentage to make the numbers match.

While I feel sorry for the Capt'n I don't really see why the HP committees inability to either project or keep to a budget should be absorbed by the general budget.

I don't know what they'll be and am, at this point, trusting that they'll work.

So assuming that the proposal above is unsuitable and past over spend will be made good by the USFA how do propose to penalize the bits of the organisation that overspend in the future?

Any candidate can answer that - please.

[Greg_D]

While I feel sorry for the Capt'n I don't really see why the HP committees inability to either project or keep to a budget should be absorbed by the general budget.

Essentially it's a matter of following through on promises. The performance grants are laid out in the Athlete's Handbook. If you achieve X result you get Y payment. We really can't change those in the middle of the season.

So assuming that the proposal above is unsuitable and past over spend will be made good by the USFA how do propose to penalize the bits of the organisation that overspend in the future?

The Director, High Performance would be held accountable. That's what's written in the proposal at this link: http://usfanominees.com/proposals/national-office/. For those that don't feel like going somewhere else I quote the relevant portions below:

The Director, High Performance would be responsible for developing and maintaining a plan to develop athletes at all levels, would hire and monitor the performance of the National Weapons Coaches, and would select and manage the provision of staff for our various Jr., Sr., Veteran and Wheelchair teams as they compete in championships and Olympics/Paralympics. The High Performance Committee would act as consultants to the Director, High Performance. However, the ultimate decisions and responsibilities would lie in this individual rather than with the committee as they do now.


Approximately 40% of the total USFA budget goes to elite athlete activities. Around 20% of the total USFA budget is provided by the USOC and the US Fencing Foundation. They both mandate that some or all of their funding be spent on particular weapons and often for specific programs. Obviously, this would continue. Beyond that, the Director, High Performance, in consultation with the ED, would have the authority to move monies around between different categories of spending as they thought appropriate.


In the fiscal 2006/2007 season spending on items that would fall under the authority of the Director, High Performance was over budget by around $600K. A communication from the joint Budget & Finance and Audit Committees was prepared and posted to the USFA website discussing how this happened. It describes a lack of process and a “death from a thousand cuts.” Much of the problem came from a lack of direct accountability and oversight. Were this problem to be repeated, we would have a specific individual to hold accountable, making it less likely to occur.

<<Campaign speech to follow... please ignore if you must.>>

Thanks for the chance to point out that the Nominated Officer Candidates really have thought these things through. We're a team. The above portion of the proposal was written as a team. The ideas in the proposals posted on our website go together to transform the USFA in a measured and organized way. No matter who is elected things will change. I believe that the question is whether that change will be carried out in a measured and organized way, resulting in greater member satisfaction, or whether the change will be haphazard and disorganized. I believe that Tracy and her team have the right goals. I just don't think that they have plans to get from where we are today to where we all want to be (as evidenced by the technology thread). That, in my mind, is the fundamental difference between our groups.

<<End of campaign speech.>>

Greg

[keith]

The Director, High Performance would be held accountable. That's what's written in the proposal at this link: http://usfanominees.com/proposals/national-office/. For those that don't feel like going somewhere else I quote the relevant portions below:

That doesn't answer the question of what happens next time they come in 5 times over budget. Accountable can mean many things would you care to give your preferred definition?

Essentially it's a matter of following through on promises. The performance grants are laid out in the Athlete's Handbook. If you achieve X result you get Y payment. We really can't change those in the middle of the season.

That is fair enough but, going forward, would you accept that if any part of the USFA was promising monies, beyond those budgeted, the USFA would only cover the budgeted portion?

<<Campaign speech to follow... please ignore if you must.>>

nice speech.

[Mr Epee]

What happens when people owed funds by the USFA begin to resort to the legal system for payment?

Surely, honoring contracts, debts and promises made by the organization should be a priority.

[Greg_D]

That doesn't answer the question of what happens next time they come in 5 times over budget. Accountable can mean many things would you care to give your preferred definition?

My preferred definition is you get fired...

That is fair enough but, going forward, would you accept that if any part of the USFA was promising monies, beyond those budgeted, the USFA would only cover the budgeted portion?

No. I wouldn't accept that. When you promise to do something you follow through. I actually think we have a legal obligation to do so. But even if we don't it's not the athlete's fault that the organization over promised. They shouldn't bear the burden.

Beyond that, if every single fencer that's going to the Olympics this year got a medal or if we had 6 world champions and 6 world champion teams next year we would need to find a way to pay them what was promised - as Capt. Slo-Mo pointed out, it's less than they've already spent to get there. I'm not willing to discourage success. It's less that I have a problem with our being over budget once as a result of extraordinary and unexpected success. It's more that I have a problem with it happening every year. That's a breakdown in process and has to be fixed.

nice speech.

Thanks.

GD

[Capt. Slo-mo]

Beyond that, if every single fencer that's going to the Olympics this year got a medal or if we had 6 world champions and 6 world champion teams next year we would need to find a way to pay them what was promised - as Capt. Slo-Mo pointed out, it's less than they've already spent to get there. I'm not willing to discourage success. It's less that I have a problem with our being over budget once as a result of extraordinary and unexpected success. It's more that I have a problem with it happening every year. That's a breakdown in process and has to be fixed.

Darned WS fencers. Who knew last year (when the budget was being drawn up) that they'd win 6 of the 7 designated Senior World Cups and Grand Prixs so far this year, and place 2nd in the 7th? Bunch of over-achieving budget breakers....

In all fairness, they DID try to take some of the end of the season budgetary pressure off in St. Petersburg.

[T]

But even if we don't it's not the athlete's fault that the organization over promised. They shouldn't bear the burden.

But they are bearing the burden along with the referees that haven't been paid. Whose fault is it? Is it Massik's? I suspect he's continuing to collect his salary every month. Why is his name at the top of the creditor list when he is on his way out AND he was in charge of $$ when it was overspent?

The problem with this discussion is that Greg has access to information that no one else does so he is able to make statements and claims that no one can verify. We know that the USFA was wayyyy over budget. But which items were over budget, who was responsible, was it the weapons coaches, staff, who was it? If Massik wasn't watching the money, why wasn't he and if he was and all that extra money was spent, why is he allowed to continue on under his own terms until after the Olympics? Was there a staff person that spent more than they were supposed to? Where is the accountability? We know there is no transparency.

My understanding is that there was a report by the Audit Committee made this past Saturday that details exactly where the USFA stands financially as well as making recommendations about some remedies. I have asked for this report twice from Nancy Anderson but have not yet received the courtesy of a reply. However, that report is information that the membership should have access to and it is my understanding that the committee (or at least someone on the committee) recommended that the report be made public as soon as possible because of the election. I haven't seen a report yet and your slate has 2 people on the Exec Committee that I'm sure have that information but have not yet come forward with it in any way. I'm having a little trouble reconciling this with accountability and transparency promises. This all sounds like the same processes to me - there are just new faces involved.

I'm not willing to discourage success. It's less that I have a problem with our being over budget once as a result of extraordinary and unexpected success. It's more that I have a problem with it happening every year. That's a breakdown in process and has to be fixed.

By the date of Feb BoD meeting (and the announcement of the significant deficit) there had been 2 designated WS world cup events and sr. world championships that had taken place in this fiscal year. While our women performed quite well at the world cups (which means that they were to receive significant performance enhancement $$), those 2 events and the associated performance money did not put us in the size of hole we are currently in (if we had access to the audit report, we would know exactly how deep that hole is). And since they didn't do all that well at the world championships (which occurred in the same fiscal year), their perf award money probably wasn't out of line with expectations at the time of the budget deficit announcement.

With that said, budgets were made and approved. I don't think that anyone who was involved in the budget process thought that our WS squad wouldn't have sizeable perf awards this season. However,

I'm going to state a few assumptions (I'm sure you will correct me if I'm wrong)...
Weapons budgets are primarily funded by the USOC.
Performance money comes out of non USOC monies.
Only successes at Designated events = performance money award.
National coaches choose Designated events.
There have been 7 Designated WS world cup events since January so far (with 2 more to come).
Out of this, only 3 were Team events (plus 1 to come).
The Team qualified for the Olympics.

If the USFA was so concerned about budgets and if performance money was 'breaking the bank' as extraordinary and unexpected success, why was the National Coach allowed to Designate 9 world cup events when it was a pretty good bet that significant performance money would be earned?

I'm not picking on w.saber at all. I believe they deserve the funding they get. That is not the point that I am making. My point is how can this expenditure be due to "extraordinary and unexpected success"? It seems that it was pretty predictable. So, I'm going to rule this out as the source of the huge budget deficit.

Since this was the first year with a sizeable deficit (as a percentage of the total revenue), this is not a repeated offense nor is it a problem that has happened every year. It's not that this deficit has been building slowly but surely every year. We had a relatively small deficit last year and this year there was a huge one.

So, with this logic, and assuming that reasonable budgets were made last year (granted, that is a big assumpion), where was the breakdown in process? And who was responsible for that breakdown? Were the budgets not realistic (and since this year is the first sizeable deficit, I find this hard to believe)? I keep coming back to the same spot. SOMEONE is responsible -- not a process. And I suspect that person is still collecting a paycheck every month and getting a free trip to the Olympics while the rest of us are 'bearing the burden'.

[mdstasinos]

So...we throw Mr Massik out for this taking place under his watch, and explain how we transition to a new ED? You are not yet elected so you do not have the authority to do so. As you recall, you were there, he announced his resignation at the February BOD meeting. The BOD accepted to keep him for a transition until the new ED took position. Have you forgot this?
Next, there has been a number of individuals that wanted to hear from Sharol Pestotnik of her thoughts and her professional opinion of what she would propose to do to help the Association to gain stability with its finances. After all she is running for Treasurer. Greg has posted numerous times information and fact to the issue and the only person who responds is you, Tracy, not the individual who will be focused on managing the financial situation and who will be accountable for the future financial health of the USFA. Please if she is running for office, please let her speak.
MD Stasinos
http://www.usfanominees.com