More Dollars and Sense

My Dear Rotarians and Friends, in particular my Action Presidents,

At the risk of boring you to tears with figures, I would like to begin with yet another clarification on the Ballot-by-Mail for the 2000-2001 Per Capita Levy for the District Fund. I would try to be brief. For serious readers, please refer to Issue 15 of my letters dated 30 April 2000.

Last year, that is the year ending 30 June 2000, the total estimated expenditure on District activities amounted to $1,917,000. In the Ballot-by-Mail, I am asking for a Per Capita Levy that would support a proposed Budget for 2000-2001 of $1,834,900. It is clear that I am asking for a slightly lower Budget for a similar level of activities. The obvious question is why the Per Capita Levy for a Rotarian in Hong Kong would need to go up to $1,100.

The reasons are simple. Last year, or for that matter, for many years, the District did not collect from each member an amount that would reflect the share and commitment of the individual towards expenses on the District Fund and District projects. Instead, the District has relied on two additional sources of income. First, the District effectively has been asking each club to pay surcharges from time to time for District projects. Last year, for example, each club was asked to pay $15,850. Secondly, the District drew down $288,470 from District reserves. Indeed, consistent and repeated drawdowns on the District reserves have meant that the District now effectively does not have a workable reserve.

In a word, the state of finance of the District is weak and vulnerable. There is no budget for many recurrent District functions and activities. This is not conducive to planning and is anything but prudent, as far as financial management is concerned. Whether I like it or not, I have inherited this state of finance, and my mission is to introduce financial reforms that would put the finance of the District on a proper footing and to hand over to my successor Johnson Chu a logical and workable budgetary process that would be seen to be fair, open and acceptable to all.

The financial reforms are actually taking shape quietly. The Action Presidents approved at the last District Assembly the setting up of a District Finance Committee to be presided by the District Governor with all current Presidents attending as members. This Committee is to the District what the Finance Committee of the Legislative Council is to the Government of the Hong Kong Special Administrative Region. For the first time in our District, the Presidents will have executive power: the power to approve and amend the Budget, the power to examine new expenditure proposals, and quite foreseeably, the power to call to account expenditure incurred by District Committees which have sought appropriations from the District Fund. We are in the process of drawing up Standing Orders and Terms of Reference for the consideration of the Action Presidents at the first District Finance Committee, to be convened immediately after the second Joint Presidents’ Meeting scheduled for 8 August 2000.

It is my sincere hope that we would have a Budget by then. I therefore appeal to all my Action Presidents to study the papers I have given you and return to me the Ballot in the prescribed form by 1 August 2000, 5:00p.m.

Someone has asked, “What if the Ballot-by-Mail does not return sufficient votes to approve the Budget?” Well, if that happens, we would effectively be left without a District Fund, and we would cross that bridge when we get there, if we get there. I am reminded by what I said in the Closing Remarks at the last District Assembly. I said, “This morning, I quoted from Dr. Martin Luther King that the ultimate measure of a person is not where they stand at times of comfort and convenience, but where they stand at times of challenge and controversy. I also said that your next Governor does not court controversies, but would never run away from them either.” This is my pledge, and I rely on you, Action Presidents, to help me make a start by explaining to your Board and membership what the Budget is all about and why they would not be having had even though they are being asked to pay a higher per capita levy. If you do that, we would make a difference, and history will show that at the beginning of a new millennium, the Action Presidents had creates awareness and taken action to put the District finance on a proper footing.

If the Budget is approved, I would put to the Finance Committee a draft Budget timetable for next year, Johnson Chu’s year. It would begin with District Committees preparing draft estimates for 2001-2002. These budgets will then be examined by the Finance Committee after which a Provisional District Budget would be worked out in full consultation with the District Management Committee and the Governor’s Policy Committee. The Budget will then be presented at the District Conference with a motion to adjourn debate on the Budget until the District Assembly when the Budget will be voted upon.

My Action Presidents, now is the time to be bold and courageous. It is far easier to do nothing, but when one looks back on one’s life, one will regret the things one did not do more than the ones one did. We must have the courage to change, and now is the time.

Talk to you soon.

John Wan

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