[Public consultation] Financial transaction limit

constitution
consultation
Tags: #<Tag:0x00007f2466cf9478> #<Tag:0x00007f2466cf92e8>

#1

Wellington’s proposal to rehome its gear has uncovered a constitutional problem around financial transaction limits which threatens the ability of NZLARPS to fund existing projects. The National Committee is currently planning an SGM to implement a temporary fix to allow business-as-usual to continue (formal notification of this will happen in the next few days), but a permanent solution clearly requires membership input.

TL;DR

  • NZLARPS’ constitution currently requires any financial commitment of $3,000 or more to be approved by SGM or AGM. The clause has been overlooked for years.
  • Venue hire for large campaign larps now regularly exceeds that amount.
  • If we want campaign-level projects to be approved quickly, then the transaction limit needs to change.
  • Questions of the level of financial control and what sort of transactions should need membership approval are rightly questions for the membership.

The detail

The NZLARPS constitution includes a financial transaction limit:

3. SCOPE OF POWERS
The Society shall be given the widest possible powers to do all things that may be necessary in the pursuance of the Society’s purposes:
(a) To purchase, take on lease or in exchange, on hire or otherwise acquire whole mortgaged land and dispose of any real personal property and any rights of privileges which the Society shall think necessary or expedient for the purposes of attaining the aims of the Society or promoting the interests of the Society and of its members or such other persons. Where financial commitment exceeds Three Thousand New Zealand dollars (NZ$3,000) all such actions must be approved by AGM/SGM…
(b) To use the funds of the Society as the Society may consider necessary or proper in payment of the costs and expenses of furthering or carrying the purposes of the Society.

(Bolded for emphasis)

When NZLARPS was established in 2006 $3,000 was more money than we ever thought we’d have. But NZLARPS has grown, as has the size of our projects. The venue hire for a large weekend-long event (such as Saga or Exile) now exceeds the limit - and such events have now become routine business in the Auckland region.

Under the current rules, we would require SGM or AGM approval for every large event budget. This is impractical, and the need to approve a budget for an upcoming large event - Saga - means that the national committee is planning an SGM to implement a temporary fix which raises the transaction limit and allows the national committee as well as an AGM/SGM to approve large expenditures. This will allow business-as-usual to continue, but it is not intended to be permanent. The level of financial control and what sort of transactions should need membership approval are rightly questions for the membership, and we would like to vote on a more permanent solution at this year’s AGM.

The key questions to consider are:

  • Should there be a transaction limit, and if so, at what level should it be set?
  • If there is a limit, who should approve large transactions? The committee? The membership? Either? Different bodies depending on the size of the transaction?

The question is complicated by regionalisation. The regions have very different levels and types of activity and financial resources. A defined limit which allows Auckland to continue business-as-usual large projects without undue delay would effectively exempt all other regions from scrutiny. But a limit expressed as a proportion of a region’s current balance would likely mean that those other regions required approval not just for venue hires, but also relatively minor transactions.

Once we’ve got some input then we can move to some polls to try and shape a clause. Alternatively, members are free to propose anything to be voted on at the AGM.


NZLARPS National Committee quarterly summary July 2017
Notice of Special General Meeting 12 July 2017
#2

And here’s the temporary fix we will be offering at the SGM, developed after consultation with the Auckland committee:

Motion 1
That s3(a) be repealed and s3(b) be replaced by the following:

(b) To use the funds of the Society as the Society may consider necessary or proper in payment of the costs and expenses of furthering or carrying the purposes of the Society. Where financial commitment exceeds seven thousand New Zealand dollars (NZ$7,000) all such actions must be approved by the National Committee or regional AGM/SGM. In cases of conflict, the SGM/AGM vote prevails.

(Bold text indicates new material for clarity).


#3

That seems a reasonable fix in the first instance. Of course, inflation means this amount will probably have to be adjusted again at some stage in the future


#4

I’m keen for this adjustment.


#5

Voted in favour, thanks.


#6

I vote in favour, in the sense of a temporary fix until the next AGM.

However, in terms of the discussion that’s going to have to happen then, I’m going to point out the awful and say that theft sometimes happens in volunteer organisations. It happened in an amateur theatre society I was involved with a long time ago, and it was a thoroughly shitty experience for everyone - the thief, the thief’s partner who had unknowningly benefited and had to try to live it down with her friends, the general members who stopped feeling able to trust each other, and the people who got stuck trying to sift through the accounting data trying to work out what had actually happened. So it’s best to have controls in place that make dishonesty difficult while still enabling projects to carry out their business in a reasonably timely manner. Would it be possible for the committee to share what their oversight procedures are for large payments? Do they sight any quotes or invoices before approving spend?


#7

[quote=“Stephanie, post:6, topic:21716”]
Would it be possible for the committee to share what their oversight procedures are for large payments? Do they sight any quotes or invoices before approving spend?[/quote]

The national committee hasn’t developed any process yet, because the amendment hasn’t passed. But speaking for myself, I would certainly want to see a quote first for anything requiring our approval, and I’d expect the regional committee to be paying such expenses directly by invoice rather than reimbursing someone. We expect expenses on this scale to be things like venue costs (e.g. if we ever use Camp Adair again), so quotes and invoices should be easy to provide.

As for the general concern: each regional committee has its own processes, and each project manager makes their own decisions about what expenses get paid directly and what they front themselves and seek reimbursement for. Projects are required to provide both an up-front budget (allowing committees both to decide if its viable and spot any unusual expenses) and post-event actuals. In practice, large expenses like camp venues are almost always paid directly by invoice. For smaller stuff, committees should be demanding invoices and receipts before any non-trivial reimbursement, and Wellington certainly does. (This will become more important if we have to register for GST, as no tax invoice means no GST refund for NZLARPS). For major one-off expenses (e.g. gear, business cards, gear storage), I’ve observed committees getting quotes and estimated prices from websites before approving payment, and again such expenses are paid directly by invoice.

We also have several pairs of eyes on the accounts, and I’ve queried things in the past where payments have been wildly out of whack with budgets (it was mislabelled, and for another game), or where cash expected after an event has not been banked (that resulted in the project being suspended until the money was found). So we’ve got some protection against control fraud as well.


#8

[quote=“Stephanie, post:6, topic:21716”]
I vote in favour, in the sense of a temporary fix until the next AGM.[/quote]

If you haven’t already, please make sure that you cast your vote by email to the designated address (see here)

Also: what would you like to see long-term? That’s what this consultation is meant to find out.


#9

Thanks for the clarification, I’ve sent a voting email to the address.

I do need to say that I don’t have any specific concerns about dishonesty in this group of people, it’s just me being aware that it can be a problem and wanting the society future proofed.

Paying large amounts directly to an invoice sounds like a good idea. I guess I’d like there to be guidelines that more expensive projects require more oversight - so things like quotes and invoices for large expenses, provision of receipts where possible, if possible at least one of the pairs of eyes should be someone who isn’t on the organising team of the project (and if it isn’t possible, I suggest that the project statements be made public).

It was certainly handy when I ran Break Room 3 to be able to provide an estimate for the cost of supplying things from my household stores, but it was for a relatively small amount - maybe give guidance on what size of transaction can be estimated versus documented?


#10

[quote=“Stephanie, post:9, topic:21716”]
I do need to say that I don’t have any specific concerns about dishonesty in this group of people, it’s just me being aware that it can be a problem and wanting the society future proofed.[/quote]

Absolutely. Fraud is one of our official nightmare scenarios (along with someone being seriously injured at a larp), and something we want to protect against. NZLARPS exists to serve the larp community, and committees have an obligation to be good stewards of community resources.

The limit for an estimated expense is $50. Anything more than that and we have to have a receipt or invoice for tax purposes.

The Auckland committee has the most experience in overseeing large projects (Wellington’s largest has been Cerberus, which was ~$2,500, and other than that we’re all small stuff with well-known costs). Perhaps someone from @nzlarps_auckland would care to chip in with their processes?


#11

The proposed amendment has passed unanimously and has been received by the registrar of incorporated societies. So the new status quo is that regional committees can approve financial commitments - meaning individual budget items, like venue hire or gear purchases or long-term storage rentals - of up to $7,000, above which they need the approval of either the national committee or their regional membership (with the latter prevailing).

NZLARPS can administratively live with this, at least until the point where we’re running so many large events that the national commitee is effectively usurping the decisions of the regions (at which stage we’d probably just have to raise the limit again). And it means Auckland can approve budgets for things like Saga (which face venue charges over the old transaction limit). But to bring this consultation back to its original point, do we want something different for the future? Is there any great support for a different arrangement (and if so, what?), or are people happy with the de facto situation of the temporary fix effectively being permanent?


#12

I’m struggling to come up with anything better right now, so I suppose I’ll have to be happy enough with the current system. It should still be blanket policy across the Society for event organisers to try to arrange for direct invoicing to NZLARPS as much as possible, and of course always expecting appropriate receipts for any other expenses that are claimed. Both of those should help to guard against most fraud - spur of the moment type things at least. It would require some proper planning (and possibly some collusion) for someone to get something through the system if the basics are being enforced.