communication department

By W. C. Wiese, STC Treasurer

Over the past two years, the STC Board of Directors has recognized that the Society’s budget cycle was inefficient, driven by the need to make a community funding commitment to the chapters during the annual conference. This, in turn, required the Board of Directors to pass a preliminary budget in May and then redo it in the fall after year-end revenues were reported. Two of the Board’s three face-to-face meetings were being spent on adopting a budget.

Now that STC continuously sends member dues payments to the chapters, the opportunity to look at changing the Society’s fiscal year became available.

At the January 11, 2008, STC Board meeting, Andrew S. Lang, CPA, a recognized expert in the area of financial management for associations, strongly agreed that STC should change its fiscal year. Lang confirmed similar recommendations from STC’s internal accountants and external auditors and noted that, while there would certainly be some disruption during the transition period for both STC and its chapters, the resultant increase in fiscal control was so significant that the change should be made.

Currently, STC's fiscal year begins on July 1 and ends on June 30, but the Society receives the vast majority of its income between January and June. This is when STC’s memberships renew and also when income for the annual conference is received.

Rationale for the Change

The problem with STC’s current fiscal year is that the Society has a limited opportunity to manage its expenses in response to its major revenue streams. Changing the fiscal year to January to December will give Society leaders clear vision into the revenue we receive with plenty of time to reduce expenses, fund initiatives, or make investments as required.

The Board therefore voted to implement a January–December fiscal year effective in 2009. Since the IRS allows a maximum of twelve months in any one reporting year, the Society will have a "short" fiscal year running from July to December 2008. This short year will require its own audit and IRS filings.

Impact on STC’s Chapters

The change will impact STC’s chapters. Because most STC chapters are not separate corporations but legally a part of STC, their financial activity and financial position must continue to be reported by the Society in its filings with the IRS. Initially, there will be no change; chapter treasurers will need to send a copy of their June 30, 2008, bank statement and completed financial report to the Society office by September 30, 2008.

The change stems from the need to report on the short fiscal year. To meet requirements, treasurers will need to work with their administrative councils to prepare a budget for the July–December 2008 short year. A copy of the chapter’s December 2008 bank statement and completed financial report for the short year must be sent to the Society office by March 31, 2009.

In the same time frame, treasurers will need to prepare a chapter budget for the 2009 fiscal year (January to December 2009). In 2010 and future years, financial reports will be due to the Society office by March 31.

For Further Information

Please contact Evelyn McCamey, Community Relations Manager, at +1 571-366-1919 with any questions.