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Networking the World

TM. Networking the World. Introduction. IEEE has three special studies underway: Branding Budget Reorganization Streamlining. Introduction (Continued).

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Networking the World

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  1. TM Networking the World

  2. Introduction • IEEE has three special studies underway: Branding Budget Reorganization Streamlining

  3. Introduction (Continued) • Budget reorganization is being accomplished by the Board of Directors (with the Institute’s Finance Committee on the “point”) via the development of a New Financial Model (NFM).

  4. Introduction (Continued) • This presentation will address issues related to budget reorganization and the New Financial Model (NFM).

  5. Overview • Background • The Transition • Goals of New Financial Model • Terminology (“A” Words) • Probable Effects • Possible Effects

  6. Background • Financial Strengths of Institute • Overall Financial Condition Strong • Operating Processes Adequate • Financial Weaknesses of Institute • Revenue Streams Assigned to Entities • Infrastructure Support Leveraged Against These Revenue Streams

  7. Background (Continued) • The current financial model • Does not always match revenue and expense within the Institute. • Does not promote good business behavior. • Produces a false understanding of ownership of funds. • Produces a false understanding of return on investments.

  8. Background (Continued) • The current financial model • Wastes administrative effort. • Does not include all Institute units (entities, departments, Societies, Regions, Sections, Councils, Chapters, Branches, and Conferences) as presently required by Corporate Auditors.

  9. Background (Continued) • The financial model should • Promote good business behavior. • Provide an accurate indication of the real financial health of each operating unit and not give the appearance of phantom wealth. • Fully fund the Institute’s infrastructure approved by the Board of Directors. • Provide the Institute with adequate processes and funds for investment spending.

  10. Background (Continued) • The financial model should • Not raise member dues or fees unless absolutely necessary. • Ensure that all Institute units (i.e. entities, departments, Societies, Regions, Sections, Councils, Chapters, Branches, and Conferences) follow the same, simple, easy-to-understand rules. • Be simple and easy to implement.

  11. The Transition • 1993 - Attempt to Solve Problems Initiated • 1996 - Volunteer Financial Oversight Structure Changed • 1998 - Corporate Commitment to Restructure Finances

  12. The Transition (Continued) • 1999 - New Financial Model (NFM) Being Defined • 2000 - Transition Budget Implemented; NFM Finalized • 2001 - Transition Completed

  13. Goals of NFM • Simplify investment options in order to • Eliminate administrative overhead • Eliminate misconceptions about “investing” • Charge units direct costs that are clearly identifiable for services provided • Charge remaining Board-approved costs as an “infrastructure charge” • Address funding needs of all units (including Regions and Sections) as budget line items

  14. Goals of NFM (Continued) • Eliminate allotments for entities and departments (Bylaw Amendments Required*) • Address funding needs of all units • Continue to more forward with concentration banking • Require up-front approval of all expenditures (budgeted and not-budgeted items) over fixed amount (based upon unit classification)

  15. Goals of NFM (Continued) • Require approval by a “higher authority” for deficit budgets • Require that all units follow consistent time-table and process for budgeting and reporting year-end status • Pursue “new opportunities” for covering infrastructure costs

  16. Terminology (“A” Words) • Allotment1 - Bylaw assignment of income • Allocation2 - Budget assignment of infrastructure charges • Assessment3 - Member assignment of special charge to fund activities • Appropriation4 - Annual budget designation of income • 1Eliminate 2Revise 3Consider Eliminating 4Expand

  17. Probable Effects • Region and Section “rebates” will be budget lines rather than a RAB “pass through”. • Region and Section budgeting for each year must be accomplished in the previous summer and reported to the Institute for incorporation within Institute’s budget by early fall.

  18. Probable Effects (Cont.) • Region and Section year-end financial reporting must be accomplished in January. • Region and Section investment returns will be fixed and not optional. • Regions and Sections will be moved to concentration banking.

  19. Possible Effects • Region and Section funding from the Institute may no longer be based upon the number of members. • IEEE-USA Region and Section support levels may be significantly reduced. • RAB may assess Regions and Sections an “infrastructure charge”.

  20. Possible Effects (Cont.) • SoutheastCon and Southcon may be assessed a “franchise fee” (in the form of a per attendee charge) for the use of IEEE’s name and logo as conference sponsor.

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