ECF Finance Council Meeting 22 April 2023

[Roger Lancaster]

Without wishing to breach confidences, I have since been told by what I consider to be a reliable ECF source that the Board (including the CEO) fully respects the independence of the Finance Committee and that the purpose of the suggested meeting was simply "to offer ideas". I don't believe it's useful to speculate on how or why any misunderstanding arose, the important point being (unless I've missed something) that this is no longer an issue.

[Kevin Thurlow]

"I have since been told by what I consider to be a reliable ECF source that the Board (including the CEO) fully respects the independence of the Finance Committee and that the purpose of the suggested meeting was simply "to offer ideas"."

The last bit doesn't really agree with the earlier bit, does it?

"I don't believe it's useful to speculate on how or why any misunderstanding arose"

I recall from my days of employment that if a staff member falsely accused a manager of corruption, stupidity or any other wrongdoing, that that was a "lie", whereas if a manager did the same to a staff member, it was a "misunderstanding". After a while, I decided that I didn't trust "misunderstandings".

[John Reyes]

i just wonder if any of the other rep has sent out email to their members and to see there views?

i know i have put my post, but it was just done by myself

[Ian Thompson]

i just wonder if any of the other rep has sent out email to their members and to see there views?

I haven't received anything from the Gold member reps.

[Roger Lancaster]

I'm not at all clear where "falsely accused ... (of) wrongdoing" comes from as I haven't suggested anything of the sort. However, I'd like to press on with my next question. Over the issue of membership classes, I'd favour the status quo not least because I don't feel the Federation has yet got to grips with the full financial implications of rolling membership. These will become more significant over the years as an increasing proportion of ECF members have subscription renewal dates other than 1 September.

My question concerns the accounting treatment of anyone who joins the ECF midway through the year, for example now so that his/her first year's membership expires 31 March 2024. I'm not an accountant, and I'll defer to those who are, but my view would be that 7/12ths of the sum paid should correctly be regarded as a prepayment (normal definition = a payment made in one accounting period for goods or services to be provided in a later period). Considering this person, and assuming s/he upgrades from bronze (£18) to gold (£39 less £9 rebate) after six months so that the service provided by the ECF spans part or all of three financial periods, how exactly will the accounts deal with this?

[Angus French]

i just wonder if any of the other rep has sent out email to their members and to see there views?

I haven't received anything from the Gold member reps.

Nor me from either of the Bronze members' reps. FWIW, last I knew, Gareth Ellis, one of the Bronze members' reps, was scheduled to have a serious operation at the time of October 2022 AGM (I hope I'm not betraying a confidence by saying this and that Gareth is well). (Gareth was a Bronze members' rep when I held that position and is, in my view, a decent chap.)

I think membership representation at tomorrow's meeting is important as:
- membership fees will be set for 2023/24 with an indication provided by the Finance Director / Board (in the management accounts spreadsheet) as to what might be proposed for 2024/25 (the adult Gold and Silver fees increase by £1 each while the adult Bronze fee increases by £2 - sounds fair?).
- the whole membership system is up for discussion - see the published paper.

[Roger Lancaster]

As to international spend, the FD's report mentions that "the late Olympiad move to India ended up taking us £20k over budget on International spend"

[Angus French]

As to international spend, the FD's report mentions that "the late Olympiad move to India ended up taking us £20k over budget on International spend"

I've been intending to post something about this... The 2021/22 spend on the Olympiad of £69,532.83 (according to the management accounts spreadsheet) was way over the budget of £43,000 and way over what has been spent previously on participation in Olympiads. I think this needs to be explained in detail - how, exactly, was the money spent? Who authorised the increased expenditure? The net spend on International as a whole for 2021/22 at £88,302.88 seems to me (though I think it needs to be confirmed) to have bust the budget of £74,514 to an extent (£15,000 or 20% of the reserves, whichever is lower, as defined in the F4.(d) of the Financial Bye Laws, with reserves for 2021/22 budgeted to be £55,630) that approval is needed by Council though there's nothing about this in any of the papers or on the agenda for tomorrow's meeting.

[Roger Lancaster]

As to international spend, the FD's report mentions that "the late Olympiad move to India ended up taking us £20k over budget on International spend" which might leave casual readers thinking that figure represented the increased costs associated with the late move from Chennai to Moscow. The quoted phrase is literally correct but more careful readers might conclude, as per the spreadsheet, that Olympiad-related costs rose from the budgeted £43k to £69.5k with some £7k being offset by savings elsewhere.

No matter which figure, but particularly the higher, one is left to wonder how this happened. For England, there were 5 men players and 5 women. Four played each round, one sitting out, so presumably little need for supporting staff (eg seconds) except perhaps someone to deal with all those tiresome little administrative matters. So, depending on which of the earlier figures one takes, it seems to me that's an approximate per capita cost increase of £1800 (£20k/11) or £2400 (£26.5/11) being the difference between a fortnight in Chennai and in Moscow.

Convenient return flights from London to Chennai in late July this year seem to be around £1200 and were probably closer to £1000 a year ago, against which one has to assume that one can subtract the budgeted costs of flights to Moscow. (They're a bit harder to quantify right now, due to international sanctions, but wouldn't have been insignificant). Obviously the players, or many of them, are professionals but it's not immediately obvious to me why they would require more for a fortnight in Chennai than in Moscow. No-one else seems too bothered but I'm left wondering how the rest of the bills were run up - and, before anyone gets too upset, I'm very willing to accept that there might be a very reasonable explanation. But, as a bonus, it might even attract more sponsors if sponsorship expenditure was a little more transparent.

Note: Sorry, finished typing this only after Angus had responded to the initial sentence which my computer had sent in error.

[Roger Lancaster]

As an aside I'll add that, while I'm aware that not every member of the ECF Board believes this forum is the best thing since sliced bread, if chat here manages to clarify one or two issues - such as the FD typo and the question of the FC's independence - ahead of tomorrow's meeting then it will, in my opinion at least, have served a useful function.

[Kevin Thurlow]

"I'm not at all clear where "falsely accused ... (of) wrongdoing" comes from as I haven't suggested anything of the sort."

I know - I was defining one source of "misunderstandings", although there are other misunderstandings... I was trying to agree with you.

[Ian Thompson]

No matter which figure, but particularly the higher, one is left to wonder how this happened. For England, there were 5 men players and 5 women. Four played each round, one sitting out, so presumably little need for supporting staff (eg seconds) except perhaps someone to deal with all those tiresome little administrative matters. So, depending on which of the earlier figures one takes, it seems to me that's an approximate per capita cost increase of £1800 (£20k/11) or £2400 (£26.5/11) being the difference between a fortnight in Chennai and in Moscow.
a bonus, it might even attract more sponsors if sponsorship expenditure was a little more transparent.

At least 13 people went to Chennai. The photo of the women's team in this report also includes the team's performance coach. It says he wasn't paid for his work, but it doesn't say who covered his expenses.

Convenient return flights from London to Chennai in late July this year seem to be around £1200 and were probably closer to £1000 a year ago, against which one has to assume that one can subtract the budgeted costs of flights to Moscow.

Maybe not. They might have been non-refundable tickets.

[Roger Lancaster]

"I'm not at all clear where "falsely accused ... (of) wrongdoing" comes from as I haven't suggested anything of the sort."

I know - I was defining one source of "misunderstandings", although there are other misunderstandings... I was trying to agree with you.

Apologies, Kevin, if I failed to take your point. This had seemed to me to be a situation where, for whatever reason, two sides had left a discussion with different impressions of what had been agreed. Sounds as though you were of similar opinion so sorry again if I seemed abrupt.

[Roger Lancaster]

At least 13 people went to Chennai. The photo of the women's team in this report also includes the team's performance coach. It says he wasn't paid for his work, but it doesn't say who covered his expenses.

Well spotted, Ian. That's a slightly different matter to the question of finances where one now presumes that both budget and actual figures relate to 13 (or possibly 14) persons making the divisor in my earlier post 13 (possibly 14) rather than 11. That would be a partial explanation. But of course it raises a separate question - and I'll preface this by stating clearly that I'm not in any way suggesting that the supernumeraries were there for the ride - of wondering aloud whether 13 or 14 people were really needed for an event where only 8 were required to play in any round.

Of course, it's entirely possible that the extra cost there was covered by sponsorship or similar sources, in which case someone (perhaps Malcolm) might fairly reply by saying that no extra cost fell on the ECF membership as a result. But I think it's also fair to say that this argument only holds good up to a certain point - applying the reductio ad absurdum approach, it wouldn't hold good for 23 or 24 people.

There's the wider question of how much ECF directors can reasonably be expected to disclose about the intricacies of sponsorship negotiations. There's a certain amount which, for perfectly legitimate reasons, and I say this with some personal experience (almost all, admittedly, outside chess) of fundraising, the Board might wish to remain confidential. I'm also keenly aware that it can be irritating to have outsiders who haven't had to put in the hard work of securing sponsorships, such as myself in this instance, to ask questions. At the same time, I think it makes little sense for any organisation to put up a wall of silence and say that "the sponsor wouldn't want us to discuss this" because, outside of those confidential areas, the short answer is that the sponsor almost certainly couldn't care less. My assumption is that, privately at least, the ECF Board probably considers the ECF membership collectively (and probably the ECF Council in particular) can't be treated as a bunch of grown-ups and - in all honesty - I'd have to say I'm not entirely unsympathetic to that view.

[Mike Gunn]

Platinum members received a mailing from their reps.