End March early May
In the fall of 2009, the Board was advised by the Audit Committee that the organization was facing a deficit budget. By December, the Committee advised that a deficit was a reality that could not be avoided. The Board was prepared for this eventuality and was of the understanding that the money in reserve would be sufficient to cover the projected shortfall. This position was brought forward at the point that the 2010 budget was to be approved. After extensive questioning, the budget was approved with reservations by the Board, noting that both the process used and the forecasts would require considerable work in the months to come, with changes to occur in the 2010 process.
Waiting for the year end numbers, Board members worked in their zones to discuss the financial challenge with members and to prepare them for the less than positive financials in the 2009 audited statements to be presented at the AGM. By mid- March, the Board was advised by the CEO that the revenue situation had become worse through the last quarter and that our deficit was far greater than had been anticipated. With this information, we began the AGM week end and moved forward to establish an agenda to stabilize the CKC. Decisions were taken at this meeting, with the assistance of members in attendance from many zones in the country, to work on fees, expenditure reductions and a rationalization of the office to ensure efficiencies were gained.
At the end of March:-
· there was insufficient money in our account to pay salaries for the next pay period,
· our ability to cover other obligations was minimal,
· our reporting mechanisms were inadequate to support the financial crisis we were facing,
· our communication was inadequate to meet the needs of staff and our members and we were in the midst of a crisis.
· Our mandate to register dogs was able to continue but all other activities of the CKC were in question.
With this state of affairs now clear, immediate actions were taken to manage our situation. The interim Chair was tasked with meeting with the CEO to develop an action plan for the organization, with input and direction from the Board. During this meeting, a three phase strategy was developed. Phase one was the resolution of the cash flow crisis. Phase two is the development of a Business Plan to respond to our changed circumstances and to move the organization forward until more substantive changes can occur. Phase three is the longer range strategy that requires by law revisions to better enable the CKC to operate efficiently. This strategy was outlined to staff that week and the beginning of a dialogue was established with the membership through the use of the CKC Special Bulletin.
That same week, the CEO structured a Working Group to assist him in moving the organization through the financial crisis. Michael Shoreman joined the group on Friday and the following week began a file review and analysis of the financial situation the CKC was facing. Supporting the three phase strategy, Mr Shoreman offered sound advice in areas of increased and more current forecasting requirements, decisions to be taken on major areas like APEX’s position within the CKC and a mid-range beginning on a Business Planning process.
Since early April, much has been accomplished. Our accomplishments in this short timeframe (1 month) are as follows:-
1. Donation program (Club and member) established with moderate success to date ($65,000 as of mid-May).
2. Improved communication plan established to ensure members, staff and partners are informed and aware of changes occurring and an openness to accept input
3. A cash flow reporting system was developed and established as a financial tool now able to be used to ensure our obligations are understood, reported and able to be managed effectively
4. Monies were managed so that wages were able to be paid through improved cash flow management practices
5. A cost-benefit analysis was begun, by sector, to identify all costs to the organization by type and to enable analysis based upon the service provided
6. A staff reduction plan was instituted and reductions to date are at 15% (one month) with one resignation and the remainder of the staff in lay off status until money is available for severance.
7. A new contract was implemented for printing and mail room services as a result of an RFP for service. This has netted a saving of $22,000/month.
8. A system has been implemented to suppress billings with credit balances
9. With its’ actions, the Board was able to maintain the show season, uninterrupted.
10. A staff bulletin and communication process has been instituted to ensure staff are aware of actions taken, the focus of the Board and management and the reason for actions being taken that impact workloads in the office
11. We have moved our year end projection from a loss of in excess of $600k to a positive $200k. While this is not yet a full answer to the issues facing the organization, it is a quantum leap from our position just one month ago.
12. Decisions taken at the March meeting are now coming into effect, raising revenues from shows and trials to better support that sector of our operation.
13. Have moved from our March deficit position to today’s bank balance of $410,688.25 – an amount that covers not only our June obligations but also takes us into early July.
14. We have had countless meetings with members, have responded to thousands of emails and have opened a dialogue that has been useful to us in taking decisions that will help support the future of the organization
15. |In communicating with other kennel clubs, we are advised by AKC that their registrations have dropped at a level consistent with the numbers we have seen in CKC. Open communication with our partners has resulted in encouragement and support.
16. The layoffs and resignation have netted a 2010 saving of $252k to the end of 2010 in salary commitment
17. A top down registration process is being developed to maximize full registration of purebred dogs
18. Member benefit packages are being explored to ensure value added is more able to be quantified
19. Have begun the process to move to a paperless financial statement
20. The move of Kennel and Bench to an on line property will result in a saving of $84,000
21. Options are being developed to streamline standing committees, streamline workloads and to save significant cost and to better support members in the registration, discipline and appeal processes.
22. A space analysis is underway to release space in the office as a sub-let
23. Dialogue has been established with Agriculture Canada
24. A major study of APEX publishing has been undertaken by the APEX Board with a view to fundamental change in our for profit arm. Recommendations will be brought to the Board table in June.
25. Instituted a hiring freeze
26. Terminated term employees
27. Instituted a discretionary spending freeze
28. Are beginning to make plans for the future to include the addition of an accountant to the staff of the CKC as funds are freed up
29. Future plan to better support our IT staff to make efficiencies and reduce paper and time
30. Plan to be developed to manage termination expense
31. Standard to be developed to institute operating costs as a % of revenues
32. Beginning of a change in culture of the CKC from policing to client focus. This will require policy and procedure changes and will reduce costs in the office, reduce workloads, reduce paperwork and should increase membership
