Message from the Honorary Financial Secretary
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Introduction
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This is my second term serving as Honorary Financial Secretary. After witnessing a turbulent year in MDA last year, it is felt that greater transparency and accountability on financial spending has to be established, as such there must be a clear cut financial policy to guide us in running the Association and no one should be above the rules. I wish to register my gratitude to the President Dr Sivanesan in permitting me to implement this clear and transparent policy to guide the Association into greater financial health and stay clear of any possible irregularities.
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Financial Policy for the Year 2008-2009
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1. To achieve fiscal surplus in each Financial Year |
As at 31 July 2008, we have a worth of RM1,410,555.30 in our non-current asset and RM1,766,616.53 in net current asset, this translates to a total of RM3,177,171.83 for total Members Fund or Shareholders Fund or equivalent to RM1234 per member based on 2574 total number of membership. Thanks to the efforts of past Councils in bringing this positive surplus for our Association as well as members. However, I need to highlight that this positive surplus is fragile and could only be sustainable if we pursue and implement a clear financial policy or it could be easily lost by unscrupulous spending and poor budget control. To achieve this end we must have a positive fiscal balance in every financial year. Let us take a look at the financial surplus/deficit in the past years
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Yr |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
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RM |
118,543 |
215,882 |
418,986 |
351,653 |
324,320 |
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From the Table above, it is evident that from 2003 to 2007 we accumulated surplus to a total of RM1, 429,384. In 2008, we expect a big dip in surplus because of huge spending and hang over effect from 2007, however we would deliberate to bring this under control and hopefully to preserve a budget surplus if we are politically determined to implement our transparent and prudent financial policy.
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2. To Continue the foundation laid by my predecessor Dr Lee Soon Boon on prudent financial spending and self sufficiency for each project |
The former Honorary Financial Secretary Dr Lee Soon Boon had done a good job in controlling the financial spending and implementing the policy of achieving self sufficiency for each project and this policy has to be maintained if we want to keep our financial surplus for each financial year. There must also be strong political will and determination to see this policy being carried out to its fullest effect. Salute to Dr Lee for a job well done.
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3. Greater Transparency of Account – Quarterly Financial Report to the General members |
We have presented the Balance Sheet of MDA as at 31 July 2008 (Annexure 1) and Profit and Lost as at 31 July 2008 (Annexure 2) for our members’ scrutiny. In the Balance Sheet, it confirms our strong financial position of having zero debt and positive surplus in non-current and current asset. Our asset is also bringing us slow but steady income to help finance our huge operating cost and secretariat expenditure. In the Profit and Loss Sheet, we noted the membership subscription and MPS subscription is on the rise, this is certainly positive news as it reflects the members’ confidence in the current Council. The challenge to the present Council remains on how we could spend our money wisely to benefit the members in general. Traditionally, our Association derived 54% of sources of incomes from Convention and Sponsorship; 14% from membership subscription; 18.9% from Advertisement & Product Accreditation; 4.5% from MPS project; 2% from rental income and 2.5% from interest income. This means that the President and I as well as the financial team have a tall order to find enough sponsorship money to meet end needs for our MDA machinery. Whereas for the Expenditure, there is a fixed and variable expenditure component, fixed expenditure is like Secretariat expenditure, which is about 16% of total expenditure; 44.8% on Conference spending to subsidize our members’ participation; 10% on International Conference e.g. FDI, APDC, CDC etc and 3.5% for Council meeting which is very reasonable.
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4. All Committee Chairman must submit a budget proposal for their project |
To prevent any surprises and unexpected spending, the Council had decided that All Committee Chairman must submit a budget proposal for their project. Each project would be allocated with a certain budget to spend and amount to be raised in balance proportion by the Finance Committee in consultation with the President and Council. The amount of budget allocated would depend on the availability of funds as well as the nature of the spending. As a general rule, the nature of the spending should be directing at benefitting the membership at large. The Committee Chairman would also not be given a blank cheque to spend, they would have to look into ways to find sponsors and achieve self sufficiency in each project organized.
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5. Focus of spending on projects that benefits the members at large |
The focus of spending would be geared towards benefitting the membership at large. We are now in budget surplus therefore this would be the time that we give back to the membership. However, we believe in giving back not by handing out cash to the members or giving out free bees. We believe in giving back by organizing quality CPD Talks around the nation and printing quality Newsletter and MDJ. We now find a new avenue to give back to our members, which is to start up the e-Journal project in our Homepage. Our President-Elect is spearheading this project, to start up with this project, we would subscribe to a few popular and informative e-journals. Our members could access to these journals for free which otherwise they would have to pay a premium to gain access to it. We believe this policy is in line with the compulsory CPD points which would be implemented in 2009.
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6. Claim Policy |
Finally to put the Association in order, we have established a Claim policy as well as House Order Financial Rules to keep things in order. All claims would have to be conformed to these Claim Policy and Financial Rules. No one is supposed to be above these rules. We believe only with an established system, a clear policy guideline and a strong political will and determination to implement it to the fullest effect would ensure that our beloved Association to stay in pink financial health.
Thank you.
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With best wishes,
Dr How Kim Chuan
Hon. Financial Secretary |
