Operations Report and Annual Operating Plan Goals Review

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Operations Report and Annual Operating Plan
Goals Review

• Neal J. Couture, CPCM
• Executive Director
• August 3, 2008

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Objective 1 Develop the Next Generation of
Contract Management Professionals
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Objective 1 Develop the Next Generation of
Contract Management Professionals (continued)
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Objective 2 Increase Professional Advocacy
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Objective 2 Increase Professional Advocacy
(continued)
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Objective 2 Increase Professional Advocacy
(continued)
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Objective 3 Reach More People in the Federal
Contracting Community
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Objective 3 Reach More People in the Federal
Contracting Community (continued)
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Objective 3 Reach More People in the Federal
Contracting Community (continued)
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Revenue Unaudited FY07-08
7.9 annual growth rate! .035 variance from
budget!
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Income Statement unaudited FY07-08
61,500 improvement in operations from last year!
384,000 negative variance in investments from
last year!
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New IRS Form 990 This is a Form Required to be
Filed Annually by most Tax-Exempt Organizations
including NCMA
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History

• Last major revision was in 1979
• In light of several recent scandals (e.g. World
  Wildlife Fund) Congress determined insufficient
  information required in old Form 990
• Directed IRS to develop new form
• IRS acted very quickly First Draft Issued June
  2007
• Final Draft issued December 2007
• Final Comments were due by June 1, 2008
• Final Form and Final Instructions Fall 2008

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Objectives of the New Form per IRS

• Enhance Transparency
• Promote Compliance
• Burden Minimization (while accomplishing the
  other two goals)

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Effective Date for NCMA

• First applies for the year ending June 30, 2009
  Filing date November 15, 2009
• This means the next filing (November 15, 2008)
  for the year ended June 30, 2008 NCMA will be
  using the old form
• Very advantageous from the perspective of NCMA as
  there are many uncertainties and ambiguities in
  the new form and instructions
• A lot of these should be clarified over the next
  year

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Highlights of the New Form

• Old Form 9 page core 2 supporting schedules
• New Form 11 page core 16 supporting schedules
• AICPA estimates that it will take 28 hours to
  read and understand new instructions
• Was a tax return now both a tax return and an
  information return
• Remains a public document may become an
  organizational annual report to constituents

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Reaction to the New Form

• Example of IRS overreaction
• Sarbannes Oxley spillover
• Body of opinion in AICPA who consider this one
  further step by the IRS in their goal of
  integrating all their tax databases allowing
  cross checking of all personal and business data
  reported
• Will increase tax filing fees by 2X to 3X

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What Does This Mean to NCMA ?

• Focus on Governance and Compensation
• IRS has no authority to ask about Governance but
  is asking anyway their theory being that good
  governance is good operations and good compliance
  with tax policy
• Some Associations are considering declining to
  answer all Governance questions but may raise
  audit profile

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What does this Mean to NCMA Governance
Information Requested on the Following

• Board Structure
• Voting Procedures
• Independence Matters e.g. Is there an
  independent contractor used by NCMA who has a
  relationship with a Board member
• Relationships between Directors, Officers and Key
  Employees
• Are minutes taken for all Board and Committee
  meetings
• Is there a Conflict of Interest Policy
• Is there a Retention and Destruction Policy
• Is there a Whistleblower Policy
• List of all Directors

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What does this Mean to NCMA Compensation
Information Requested on the Following

• Disclose compensation of five highest paid
  employees over 100,000
• Disclose compensation paid to former Directors
  if over 10,000 5 year look back period
• Are there written polices on Governance expenses
• Disclosures re First class travel
• Is supporting documentation required
• How is compensation of Executive Director
  established
• What bonuses are paid and on what basis
• Note Both the Governance and Compensation
  requirements are still being negotiated by the
  IRS and interested parties (AICPA) and may be
  subject to change

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What does this Mean to NCMA Activities

• Description of Mission
• Provide list of accomplishments/activities during
  the year addressing three largest programs
• Total number of employees
• Estimated number of volunteers used
• Establish process for Board to review Form 990
• New Schedule O This asks essentially if there
  is anything not requested by the Form 990 but
  that you would nevertheless like to disclose
• Extensive additional information required in
  respect of the Unrelated Business Income Tax
  calculation

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Summary

• Well try to cooperate with the IRS, because as
  citizens, we feel a strong patriotic duty not to
  go to jail Dave Barry

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New governance website
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Chapter Feedback Survey

• Annual requirements per Chapter Policy.
• Survey issued July 16th to all chapter volunteers
  on record.
• 127 responses received, 27 from Chapter
  Presidents.
• Median volunteer experience 4 yrs
• 25-50 of respondents had no opinion for many
  questions.
• Concern about of respondents that dont know
  what CMLDP, CoPs and Macfarlan programs are.
• 80 contacted national office, 88 rated us
  responsive.
• Areas of improvement needed
• Membership reports
• Certification preparation materials

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Membership Survey

• 27,116 surveyed, 3,306 responses (12 response
  rate).
• Age small decrease in avg age to 48.3 y.o., but
  there are more people lt35 y.o. and less 45-54
  range.
• Race 72 C, 10 AA, 4 H, 3 A, 1 NA
• Education unchanged 12 ND, 88 B, 51 M, 7 D
• Experience avg remains 16 yrs, but more lt5 yrs
• Certification fewer NCMA certification-holders
  as of respondents likely broader survey
  distribution.
• Employers shift towards more industry continues.
• Levels fewer

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Membership Survey (cont.)

• Reasons for not renewing membership are shifting
• Fewer cite dues amount, no time, or
  dissatisfaction.
• More cite other, miscellaneous (personal)
  reasons.
• Fewer people are joining for personal growth and
  development reasons.
• Factors affecting continued membership
  continuing education opportunities, and my career
  plans.
• Employers are increasingly paying dues 30
  personally pay for their continuing education.
• Trend of preference for all things virtual
  increased value of audio seminars, e-courses,
  websites, CMjobs.com

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Membership Survey (cont.)

• Overall satisfaction is improving?
• Very satisfied increased from 29 (2005) to 36
  (2008)
• Dissatisfied decreased from 10 (2005) to 4
  (2008)
• Issues that concern members (very important)
• Best contracting practices.
• Ethics.
• Career development.
• Cost and pricing.
• Moving up
• Certification and education.
• Long term job security.
• Aging of the workforce.
• Contracting as core organizational workforce.
• The economy.
• International contracting.

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