Greetings:
Many of you responded to the earlier message (from Pete MacPhail) about AYSO's financial challenges with positive and constructive suggestions for helping us achieve greater financial security. Thank you for your ideas and for your willingness to help. You have reaffirmed what has always set AYSO apart from other youth sports organizations - AYSO has the best volunteer corps ever
assembled!
The Board of Directors had predicted a small surplus of revenues over expenses for the fiscal year ending June 30, 2006. However, year-end figures provided at the Board meeting in July showed AYSO had:
. Total operating loss $1,395,504
. Less one-time gain on
sale of AYSO House $ 529,164
. Net operating loss $ 866,340
An immediate inquiry was started at the July Board meeting to determine the reasons for exceeding our 2005-2006 budget. At the same time, immediate steps to prevent a similar occurrence in fiscal year 2006-2007 were implemented. The purpose of this memorandum is to provide information for this unexpected and disappointing loss and to detail the specific steps taken to assure the financial performance for the current fiscal year.
Based on our inquiry, all funds were spent on AYSO business purposes. No misappropriation of funds were found. Simply put, our actual expenses exceeded our budgeted expenses. The most significant variances were:
. Over spent $322,023 on capital expenditures
. Section Conference cost overrun of $439,964
. NAGM cost overrun of $248,020
. Higher than anticipated Supply Center costs - $193,590 (inventory stock
reductions and more expensive player & volunteer registration forms)
. Loss of $112,500 in automobile sponsor revenue
Capital Expenditure Overruns: The single largest item in this area was $146,455 for the project to integrate the eAYSO events module to the Great Plains financial system. $40,248 was due to renovating space formerly sub-leased by US
Volleyball. $92,041 was used for other unbudgeted eAYSO enhancements and modifications.
Section Conference Cost Overruns: As was announced a year ago, fiscal year 2005-2006 was the first in a three year experiment to combine Section Conferences. New programs were added to improve the experience for everyone involved. Feedback from attendees was overwhelmingly favorable with many citing the positive energy they took home from the conferences as one of their finest AYSO experiences. A cost savings was anticipated from combining conferences which would offset cost increases from improved programming. Unfortunately, those synergies did not materialize.
The cost for bigger facilities to accommodate a larger attendance was inadequately recognized. Several conferences experienced attendance below
expectations, and many conference expenses exceeded budgeted amounts. Historically, Section Conferences operate at a budgeted "deficit", with expenses exceeding revenues. This year it was by a much larger margin.
NAGM Cost Overruns: Expenses for the NAGM exceeded budget by $248,020, mostly because Hurricane Katrina forced us to move from New Orleans to Orlando. Approximately $161,000 of the total NAGM expense was a direct result of this
unbudgeted move. Again, the National budget absorbed the full amount of the short-fall.
HOW ARE WE FIXING IT?
First, the NBOD expanded direct timely reporting of all significant financial matters to include the entire Board, Treasurer, and AYSO President, in addition
to the National Executive Director.
Second, an improved contract review process has been implemented. The process will now include Legal Commission and outside counsel review.
Third, appropriate checks and balances on expense authorization privileges at the NSTC have been restructured to assure greater control.
Fourth, the Audit Committee has been given a more pro-active role in monitoring financial reporting. The Audit Committee's charter is being reviewed to increase its responsibility for assuring compliance with sound general business practices.
Fifth, an Operations Committee is being formed to perform additional reviews to identify ways to improve our current business practices.
Sixth, hotel registrations and reservations for Section Conferences and the NAGM have been changed:
. Examples:
o Earlier registration cutoff dates will enable
AYSO to lower our financial exposure as to the number of hotel rooms and meals we must pay for.
o Requiring advanced payment from attendees will mean no-shows will no longer hurt us financially.
o There will be strict adherence to refund policies.
Seventh, a more timely and on-going review of Section Conference expenses will be undertaken to assure they are within budget.
WHAT DOES THE FUTURE HOLD FOR AYSO?
Growth! We must increase our player base and our sponsorship revenues (sponsorship is directly tied to the size of our player base). The alternative
is to increase player fees or reduce services. We must focus on what makes AYSO unique. We need to identify new and creative ways to increase our player base without further overloading our volunteer community.
AYSO is strong and healthy and is delivering on our promises to our children. Together, we will find the answers we need to continue delivering programs that enhance children's lives.
Thank you for your continued support and verything you do for the kids of AYSO. We trust that the Fall Season has gone well, and we all look forward to the next time we can get back to the fields, to see the kids smiling, laughing and having fun playing AYSO Soccer. That is why we all volunteer for this mazing organization!
Best regards,
AYSO National Board of Directors
Pete MacPhail - AYSO National President
Fred Gregory - AYSO Chairman of the Board
Frances Stronks - AYSO Vice President
Mark Stewart - AYSO Vice President
Mike Wade – AYSO National Secretary
Burton Haimes – Board Member
Bill Hummell - Board Member
Paula Berriz - Board Member
Shawn McCormick - Board Member
Jim Schauer - Board Member
Jim Gregory - Board Member
Steve Lacher – AYSO National Treasurer