Accounting/Finance Questions

Frequently Asked Questions

Why should money be centralized?

By integrating finances, the sum of FPA will be greater than the independent parts. The consequence of combining resources is the elevation of FPA’s influence in the landscape, FPA’s relevance to members, and the opportunity to realize greater buying power to support our communities and members. Importantly, local communities will still have authority over their budgets and manage their resources on a day-to-day basis. The OneFPA Resource Coordination Committee will optimize support to help TNCs determine the most effective ways to develop and manage their budgets.  

What’s the specific dollar amount of the dues that will be distributed to TNCs?

Relevant OneFPA committees and the Board of Directors will explore and answer what to do about dues and local assessments, including if there will be the same dues amounts across all TNCs, if TNC assessments are allowed and, if so, for what, and what portion of dues is allocated to TNCs. Ultimately, the OneFPA leadership, in the spirit of participatory governance, will have to assess and determine what is in the best interest of FPA that provides the best experience for members. It will be one of the core issues that will be addressed over the next two years.  

What happens to annual TNC surpluses?

TNCs will continue to control their current and future reserves under the new system. While the new accounting system will include all TNC and National monies, TNCs will continue to direct how their reserves are utilized.

Will all FPA communities, not just TNCs, have annual budgets?

All FPA communities will be responsible for developing a business plan and submitting a budget in coordination with the OneFPA Resource Coordination Committee. 

Are reserves the same as operating accounts? 

They are different. Operating accounts deal with the ongoing day-to-day operations of FPA communities. Reserves come under investment policy guidelines to ensure the current and future financial well-being of FPA and its communities.   

How will strategic partnership dollars trickle up or down to TNCs?

Under the OneFPA Network, the intention is to coordinate and leverage the potential of FPA’s strategic partnerships, financially and otherwise. All FPA communities have a role to play in sponsorships and partnerships. Specifically, as it relates to TNCs, they will work with the OneFPA Strategic Partnerships Committee on national sponsorships and have a key role with respect to local sponsorships. TNCs should have the freedom and authority to enhance local relationships while coordinating more nationally based relationships. The OneFPA Strategic Partnerships Committee will assess and recommend the most effective approach to the strategic partnerships and how the monies get distributed.   

Integrating accounting and operations under one system sounds good, but it also sounds very complex and do we have the skill and resources to make it happen effectively? 

Other organizations that are as or more complex than FPA have created the same type of centralized accounting and operational system with satellite entities/offices. We have searched for the right partner to support this important aspect of the OneFPA Network and have secured the services of RSM (rsmus.com) to help us assess and design a system that will meet the operational vision of the OneFPA Network. RSM will engage in conversations with chapter leaders and executives in the assessment, design and testing of a new OneFPA Network centralized system. 

What happens to my chapter’s money? 

Through participatory governance, the Board of Directors and all OneFPA committees, which have significant representation by TNC leaders, oversee FPA’s financial system and policies. All FPA money, including FPA national money, will be housed in one bank account under one accounting system. TNC finances (operations and reserves) will be accounted for by each TNC. TNCs will have control over their existing finances, existing reserves and future reserves.

Do TNCs get to keep the revenue their events generate? 

Yes, TNCs will keep revenue generated by local events. These revenues will flow into a single FPA accounting system accounted for by each TNC.  

Will TNCs have the authority to use/spend funds the TNC has locally generated?

TNC leaders have a fiduciary responsibility to both FPA and their TNC. As such, TNC leaders will act responsibly with respect to their reserves, budgets and all protocols that are established now and will be established in the future.   

How will TNCs know their budget? 

TNCs will develop their own budgets and then work with the OneFPA Resource Coordination Committee for support and budget finalization. TNCs will receive monthly reports and TNC executives will have ongoing access to budget and financial information through a single, integrated accounting system. 

When does this new budget process go into effect?

It’s anticipated that the process to develop budgets for 2020 will begin mid-year 2019. 

Will TNCs and state councils be dis-incentivized to generate money if they don’t have control? 

Headquarters and TNCs will be pooling their finances so that it is everyone’s money that lifts the whole of FPA. Both national and TNCs will have to see the benefit of contributing their efforts to the benefit of their local communities AND the whole organization. Under the OneFPA Network, there are still separate component parts, but all communities are part of FPA. The incentive is still present if leaders can embrace that the sum of OneFPA is greater than its parts. Also, baselines and metrics will be established so that TNCs will be able to benchmark and measure their success with a greater understanding of the benchmarks and measures of other TNCs.       

How will local and regional financial constraints be considered when determining budgets? 

Since TNCs develop their own budgets, local cultural, strategic and operational differences will be considered.  

What happens if a TNC “overspends” in any given fiscal year? What are the consequences, if any? 

The OneFPA Network is designed to be instructive and supportive – not punitive. If a TNC is struggling to meet its financial obligations, the OneFPA Resource Coordination Committee will be available to support the financial health of the TNC. Support could include providing enhanced expertise, tapping into TNC or FPA reserves, or other options, depending on the situation. 

Will national be sharing its financials with chapter leaders? 

In the spirit of OneFPA, while FPA has always supported transparency, the level of sharing will increase dramatically in the OneFPA Network. To this end, in January 2019, FPA will hold a special meeting with chapter leaders to review in detail FPA’s financial situation, including preliminary financial results for 2018.

Why does FPA need chapters to provide detailed general ledgers now? What is it being used for?

The purpose of providing detailed general ledgers to RSM, the accounting firm that is helping us assess and design a system that will meet the operational vision of the OneFPA Network, is to see the chapter account structure (chart of accounts), as well as FPA National’s account structure. This will enable/inform the creation of a draft master chart of accounts for the OneFPA Network and allow for work to begin on a mapping process and beta testing.

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