Show me the Money:

[Gianni Truzzi]

Dear James,

I hope our conversation at the General Meeting last night helped to bring you up to date on things. I realize that your 1996-97 tenure on the SCNA board was a difficult and frustrating experience. The difficulties of that time were what led me
to run for a board seat. Your grievances are completely valid. But they do not accurately reflect the current state of affairs.

Since that time, there have been a number of improvements, which I hope I was able to make you better aware of last night. The financial information for 1997 has been online for almost a year (since February, 1998). The URL is:

    http://www.scn.org/scna/finances/index.html

This public reporting actually exceeds our requirements under the bylaws. Normally, our public report is the Form 990 that we file with the IRS, and those can be given on request. These detailed reports are normally distributed only to the
board, although board meetings are public. The board has been getting more frequent reports from our Treasurer, working toward a regular quarterly report. Our reports for 1998 are expected shortly, well in advance of our required deadline of
April. We have also drafted a 1999 budget of functional expenses, and are completing that budget process.

Your assertion that the bylaws require an "audit" are not technically correct. We have investigated this, and an audit is a highly involved process that is extremely costly and, according to the advice of a CPA, not warranted for an
organization of our size. What the bylaws do require (as you pointed out), is that our statements be prepared by an independent CPA. We have been investigating this, too, although so far our advice is that this would also be cost-prohibitive
and not necessary.

But the efforts we have already made, and will continue to make, are (I hope you will agree) substantial progress. They are a direct product of your fine effort at making us more aware of our failures in compliance.

As I also told you last night, we are engaging the services of a management company to maintain our complete database of registrations and donations, to process incoming registration forms and process, deposit and acknowledge all donations.
This is expected to address many of the issues you have raised about the poor response time of registrations, and to better track all of our incoming funds. It will also put in place some much-needed financial controls, following our friendly
CPA's advice.

This will also have the vital atribute of freeing up the time of both our at-large volunteers and our volunteer board members to concentrate on other things, like program development, system administration and organization-building. We are
also working to better communicate with our volunteers, and build better systems for coordinating and recognizing them.

As regards the 1995 event, it is not a bit unusual or the least bit unethical for a non-profit to have a mixed of paid staff and volunteers. The Pacific Science Center, for example, works that way all the time, as do most 501(c)(3)
organizations. As it happens, that is the *only* occassion that anyone has ever paid to do anything for SCN, and that was done under the governance of CPSR, with grant funds given for that purpose. SCNA currently operates completely with
volunteers, including all of the board members. This is likely to change within the next couple of years, so that we can address many of the resource issues you yourself have raised.

But currently, SCNA does not operate on a lot of money. We take in less than $30,000 a year, of which nearly 2/3 goes to pay for phone lines. We have a rainy-day fund of between $25,000 and $30,000. That does not suggest that there has been
any fraud or abuse. Our past failures to distribute financial information have been due to the limitations of  our volunteer officers and board members, not any ethical lapses. We can consider ourselves very lucky.

Your participation in SCNA, both as a volunteer and a board member, has been appreciated. I hope you know that you have made a significant difference.

-- Gianni Truzzi
President, Seattle Community Network Association.




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