Canadian Albacore Association Financial Statements

Jason Roth jason.roth at
Tue Aug 29 20:21:32 EDT 2006

Hello again, Albacore sailors.

First, let me start by thanking all of you who took the time to  
respond to my first e-mail on this subject. I appreciate the kind  
words, and the open sharing of opinions.

I would like to update you on the progress of these discussions over  
the past week or so.

There has been a 4th suggestion made by several members, one which I  
believe bears additional scrutiny.

In lieu of an audit (or a review) by an external accounting firm,  
some not-for-profit organizations use a "finance committee" to do  
such a review (and more).

The finance committee would be separate from the executive. Other  
than the treasurer, no one from the executive will be allowed to sit  
on the Finance Committee. The treasurer would be an ex-officio member  
of the finance committee. There would be (at least) 2 members of the  
finance committee elected from the membership by the members at an AGM.

The role of the finance committee would be to examine the books and  
records of the association to ensure that the financial goals of the  
association are being maintained - that the investment decisions are  
in line with maintaining the safety of the reserve funds, and that  
the executive is spending the association's money wisely.

The finance committee would provide a draft report to the executive,  
and full report to the members at least once per year.

The finance committee would also be asked to evaluate if there are  
opportunities for improvements in the operation of the CAA, and would  
be requested to include any such opportunities in their annual report.

I am 100% in favour of this approach, as I feel it offers the  
membership at least some measure of security as to the accuracy of  
the financial statements. In addition, it adds more value than an  
audit by not just ensuring the financial statements are accurate, but  
also that the (financial) goals of the CAA are being maintained.

So, I will be recommending the following motions at the AGM:

1) That the members accept the 2005 Unaudited Financial Statements as  
presented and reported on at the AGM (this is as it has been for the  
past few years, except that the statements are not being audited for  
the 2005 year).
2) That the members approve the creation of a Finance Committee, and  
that the Finance Committee be requested to examine the books and  
records of the CAA and report back to the members at least once per  
3) That 2 members in good standing of the CAA be elected to the  
Finance Committee at the AGM.

I have had one member already volunteer to be nominated to that  
committee (thanks Alan!). If anyone else is interested, please let me  
know and I will ensure that your name(s) are included at the AGM for  
acceptance by the members.

If you are strongly opposed to the above motions, please let me know  
by e-mail at your earliest convenience. This is not a "speak now or  
forever hold your peace" request - this matter can only be properly  
accepted by the members (one way or the other) at the AGM. I ask you  
to voice your opposition now so that we can all hear your concerns,  
and so that they can be discussed, and hopefully resolved, prior to  
the meeting.

In all honesty, I'm trying to save myself 12 hours of driving in one  
day. I will not be able to sail at the Canadians this year due to  
other commitments on the Saturday and Sunday - and will only drive up  
for the AGM if there remains significant resistance to this matter.  
If people are generally accepting of the above approach, I will  
provide my report in writing for one of the (attending!) executive  
members to present on my behalf.

Thanks again for your consideration of these important matters.

I wish you all happy sailing.

Kind regards,


On 23-Aug-06, at 8:48 PM, Jason Roth wrote:

> Dear Albacore sailors:
> As you are likely aware, KPMG has completed an audit of our  
> financial statements for the past 6 or 7 years. As a result of my  
> past tenure with KPMG, I was able to obtain this audit for a cost  
> of about $500.00 (which rose to $750.00 in the past couple of years).
> Over the past year or so, there have been changes within KPMG, and  
> all of my former colleagues have now either left the firm, or have  
> retired. I am no longer able to obtain the audit “as a favour”, and  
> KPMG would like to introduce a price which is more in line with the  
> market rate for an audit of an organization our size. The fees for  
> a “market rate” audit would be somewhere between $3,000 and $5,000.
> We have three options, as far as I can tell.
> 1)   Continue with KPMG, paying market rates for an audit.
> 2)   Present unaudited financial statements and increase the  
> transparency with additional reporting.
> 3)   Search for an alternative accounting firm to perform the audit  
> on a free or nearly free basis
> We have discussed this matter as an executive, and believe that  
> this is an issue which the membership should have input on. Since  
> this is a fairly major issue, we decided to share the information  
> with you now, well in advance of the AGM, so that a reasonable  
> discussion can be completed before the need to vote on motions.
> Here are the pros/cons of each of the three options, followed by my  
> recommendation.
> If we continue with KPMG, we are receiving an audit opinion from  
> one of the world’s leading accounting firms. However, in Canada, an  
> audit is an audit, regardless of which accounting firm completes  
> the work and signs the financial statements. We would be faced with  
> having to increase fees by approximately $20.00 per member in order  
> to cover the cost of this audit work. In my opinion there is really  
> no sense in spending that kind of money, given that our total  
> assets are less than $50,000.
> However, completing an audit ensured that the financial statements  
> presented to you at the AGM each year were accurate – that the  
> statements reflected the transactions we actually completed. It was  
> still up to the members and the executive to determine if those  
> transactions were appropriate. Basically, the audit ensured that  
> the executive (and especially me, as treasurer) wasn’t spending  
> your money on personal activities and hiding it elsewhere in the  
> financial statements. If we no longer complete an audit, I would  
> recommend that you, through a motion at the AGM, ask the executive  
> to provide interim reporting on all investment transactions and any  
> significant expenditure that is out of the ordinary course of  
> running the association. This would be additional reporting. The  
> treasurer would still be expected to present financial statements  
> at the AGM each year.
> The third option would be the best of both worlds – we wouldn’t  
> have to increase fees, and you would have the assurance that an  
> audit provides. However, to pursue this approach would require your  
> assistance to talk to friends, family, neighbours, crew, etc. to  
> find a small accounting firm (or a sole practitioner) who would be  
> willing to provide the CAA with an audit of the financial  
> statements for little or no cost to the association.
> I propose the following:
> a)    That the membership accept the UNAUDITED financial statements  
> for the year ended October 31, 2005; (they haven’t been audited by  
> anyone yet). They will be presented at the AGM at the Canadian  
> Championships in September.
> b)   That the membership agrees to forgo an audit of the 2005 and  
> 2006 financial statements
> c)    That the membership requests the executive provide interim  
> reporting at least every 6 months, and that this reporting must  
> include details of all investment transactions
> d)   That the membership insists that the above arrangements are in  
> effect only for the next year, and need to be renewed or changed  
> annually.
> Unless there is significant disagreement with the above, I intend  
> to introduce motions at the AGM to make this happen.
> If, in the meantime, someone knows a Chartered Accountant who is  
> willing to take on the CAA as a client (annual fee for the audit =  
> $500 to $750), please contact me as soon as possible.
> I suggest that we make use of the albacore mailing list for  
> comments on this matter (mail to: albacore at If you  
> wish to mail me directly, please use my CAA account:  
> money at
> Sincerely yours,
> Jason Roth, CA
> Treasurer

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