<HTML><BODY style="word-wrap: break-word; -khtml-nbsp-mode: space; -khtml-line-break: after-white-space; "><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Dear Albacore sailors:</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">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).</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">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.</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">We have three options, as far as I can tell.</SPAN></FONT><O:P></O:P></SPAN></DIV><P class="MsoNormal" style="text-indent: -24px;margin-left: 0.5in; "><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">1)</SPAN></FONT><SPAN style="font:7.0pt "Times New Roman""> </SPAN></SPAN><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Continue with KPMG, paying market rates for an audit.</SPAN></FONT><O:P></O:P></SPAN></P><P class="MsoNormal" style="text-indent: -24px;margin-left: 0.5in; "><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">2)</SPAN></FONT><SPAN style="font:7.0pt "Times New Roman""> </SPAN></SPAN><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Present unaudited financial statements and increase the transparency with additional reporting.</SPAN></FONT><O:P></O:P></SPAN></P><P class="MsoNormal" style="text-indent: -24px;margin-left: 0.5in; "><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">3)</SPAN></FONT><SPAN style="font:7.0pt "Times New Roman""> </SPAN></SPAN><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Search for an alternative accounting firm to perform the audit on a free or nearly free basis</SPAN></FONT><O:P></O:P></SPAN></P><DIV class="MsoNormal" style="text-indent: 0px;"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">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.</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Here are the pros/cons of each of the three options, followed by my recommendation.</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">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.</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><FONT class="Apple-style-span" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">However, c</SPAN></FONT><SPAN class="Apple-style-span" style="font-size: 16px;">ompleting 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 <B>additional</B></SPAN></FONT></SPAN><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> reporting. The treasurer would still be expected to present financial statements at the AGM each year.</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">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.</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">I propose the following:</SPAN></FONT><O:P></O:P></SPAN></DIV><P class="MsoNormal" style="text-indent: -24px;margin-left: 0.75in; "><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">a)</SPAN></FONT><SPAN style="font:7.0pt "Times New Roman""> </SPAN></SPAN><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">That the membership accept the <B>UNAUDITED</B></SPAN></FONT></SPAN><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> 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.</SPAN></FONT></SPAN></P><P class="MsoNormal" style="text-indent: -24px;margin-left: 0.75in; "><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">b)</SPAN></FONT><SPAN style="font:7.0pt "Times New Roman""> </SPAN></SPAN><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">That the membership agrees to forgo an audit of the 2005 and 2006 financial statements</SPAN></FONT><O:P></O:P></SPAN></P><P class="MsoNormal" style="text-indent: -24px;margin-left: 0.75in; "><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">c)</SPAN></FONT><SPAN style="font:7.0pt "Times New Roman""> </SPAN></SPAN><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">That the membership requests the executive provide interim reporting <B>at least every 6 months</B></SPAN></FONT></SPAN><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">, and that this reporting must include details of all investment transactions</SPAN></FONT><O:P></O:P></SPAN></P><P class="MsoNormal" style="text-indent: -24px;margin-left: 0.75in; "><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">d)</SPAN></FONT><SPAN style="font:7.0pt "Times New Roman""> </SPAN></SPAN><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">That the membership insists that the above arrangements are in effect only for the next year, and need to be renewed or changed annually.</SPAN></FONT><O:P></O:P></SPAN></P><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Unless there is significant disagreement with the above, I intend to introduce motions at the AGM to make this happen.</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">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.</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">I suggest that we make use of the albacore mailing list for comments on this matter (mail to: </SPAN></FONT><A href="mailto:albacore@myfleet.org"><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">albacore@myfleet.org</SPAN></FONT></A><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">). If you wish to mail me directly, please use my CAA account: </SPAN></FONT><A href="mailto:money@albacore.ca"><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">money@albacore.ca</SPAN></FONT></A><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">. </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Sincerely yours,</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">CANADIAN ALBACORE ASSOCIATION</SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;"> </SPAN></FONT><O:P></O:P></SPAN></DIV><DIV class="MsoNormal"><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Jason Roth, CA</SPAN></FONT><O:P></O:P></SPAN></DIV><SPAN lang="EN-GB" style=""><FONT class="Apple-style-span" face="Tahoma" size="4"><SPAN class="Apple-style-span" style="font-size: 16px;">Treasurer</SPAN></FONT></SPAN> </BODY></HTML>