Inline
-----Original Message-----
From: Harald Tveit Alvestrand [mailto:harald(_at_)alvestrand(_dot_)no]
Sent: Wednesday, November 17, 2004 22:16
To: Fred Baker; ietf(_at_)ietf(_dot_)org
Cc: isoc-board(_at_)isoc(_dot_)org
Subject: Re: AdminRest: Finances and Accounting
Thanks for the followup, Fred!
I think the number of changes in chapter 5 reflects quite a bit of
uncertainty about what it should say... we (the IETF
community, with ISOC)
should work together on this to make sure it says neither too
much nor too
little.....
Some specifc points (my opinions):
--On 17. november 2004 16:55 -0800 Fred Baker <fred(_at_)cisco(_dot_)com>
wrote:
A question for those maintaining the document?
There is a fair bit of change in section five, regarding IASA funding.
In a nutshell, it now says:
- IETF has three revenue streams:
* IETF meeting fees
* Donations of various kinds designated to the IETF
* ISOC funding derived from other sources
- the first two get deposited in the IASA checkbook
- the third gets deposited in quarterly lump payments
- there is an intent to have built up enough money for the IASA to
run for six months without receiving a dime, over a period of
three years.
[skipping description of how ISOC works]
A significant part of IETF expenses will be in deposits for future
meetings. Generally, the most expensive way to plan and pay for an
excursion in a hotel or conference center is "at the last minute". As a
result, most organizations that plan conferences have deposits on hotels
and such at least a year out. A quick look at
http://www.icann.org/meetings/, for example, shows meetings paid for
through next summer, and on in development in December 2005. When the
document talks about a six-month reserve, I therefore have to ask: which
six months of the year? Does this cover one planned meeting fee, or two?
On an accrual basis, that's not much of an issue, but on a cash basis, it
is a big one.
Actually the words are:
In normal operating circumstances, the IASA would look to have an
operating reserve for its activities sufficient to cover 6-months of
non-meeting operational expenses, plus twice the recent average for
meeting contract guarantees.
This is 6 months of the expenses that occur throughout the year (assuming,
probably too blitely, that they are reasonably smooth) + some funds that
allow us to schedule at least two more meetings, beyond the ones already
committed - or that's how I read it, which may not be the intent of the
writers (I would think that one meeting's guarantees would be enough).
So Fred, does the clarification that Harald gave help?
In my reading, I think the document says it correctly, and so there
would be (once we reach the "normal operating circumstances") sufficient
money to pay the deposits for future meetings.
Do you agree? If not, pls send better text.
The effect of section 5, if I am reading it correctly, is to transfer
these budgetary bumps and grinds to the IASA rather than allowing the
ISOC to help out, making "oops, we're low on cash" something that has to
be discussed as opposed to ISOC simply backstopping things as we have
heretofore agreed. By treating them on a cash basis rather than an
accrual basis, this section seems maximize the pain they cause.
I think we need to find a reasonable way to budget & expense stuff.... you
sure make an accrual basis sound tempting, but we do have to have cash in
hand too.
In my (personal and conservative) view, it is not so much
"to have cash in hand" as it is "as adults we must save money
to be able to handle bad times in the future".
We are no longer kids that want to keep relying on our parents
to chime in (with money) when bad things happen. We want to try and
be responsible and run our own show based on a planned budget and
planned income. We want to build reserves in case the future planned
income/expenses cause a bump.
One thing that I heard people say in commenting on budgeting was that the
IETF needs to show budgetary responsibility too - we can't ask for the sky,
and say "it's ISOC's job to pay for it". The separation of accounts may
also have been intended to show this - that the IETF, and IASA, has its own
responsibility to behave responsibly wrt finances.
exactly
But there may be better ways to express this than overconstraining our
structure...
In my view, we (IETF) may (most porbably WILL) need help from ISOC for
a number of years to ensure we can "run our own show" so to speak.
I'd hope that ISOC wants to help us achive that status.
I'd hope we can do so by a yearly budget that will reduce the amount
of money that ISOC must hand to us (IETF) in order to bridge the gap
between income (meeting fees and earmarked donations) and expenses.
Part of that "initial" gap is the need to build up reserves.
Again.. those are my personal views on this.
I wonder whether the IETF would consider talking with ISOC's accounting
office to normalize these issues now, and whether the problem really
needs to be this tightly constrained?
I think this is a very valuable piece of advice. I know that I don't know
what I'm talking about when it comes to accounting methods....
I'd hoped that the transition team (once it's set up) could go into this -
the IESG and IAB are hoping to finalize picking the transition team Monday
of next week.
At the one hand it would be nice if we can just leave that all to the
transition team. But some principle need to be layed down in the BCP.
Actual details and implementation can be done by the transition team
or even by the IAD/IAOC once they come into existence.
So getting in touch with the ISOC accountants to try and make sure we
do not specify things in the BCP that seem absoluetly inpossible would
be good. Not sure how we arrange for that. Suggestions?
Bert
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