Anonymous said...
If there is no better channel to investing the earned capital into meaningful charitable activity, the conservative way is to reduce the tuition for sure, I fully agree.
Practically, the Break-even analysis should be performed first, this is also why the Pro Forma Statement of Operation needs to be constructed by new management team as I mentioned in the suggestions of Principal Election Process.
The main source of cash inflow of the School is Tuition, and outflow is Payroll/Labor Cost and related Admin Expense. Activities primarily are cash based, even accounting method is Accrual, so Break-even could be analyzed through the model as follows:
Cash in flow: Tuition (ignore other revenue at this point)
Cash out flow:
1. Payroll and related taxes (FICA, FUTA, etc)
2. Direct Labor and Indirect Labor (Contractors)
3. SG&A Expense (Rent,Utilities,Communications,Ads,etc.)
Break-even:
Cash In Flow = Cash Out Flow
Rate of Tuition * Numbers of Projected Students = Total projected expense
Rate of Tuition = Total Projected Expenses/Total Projected Students
This is just a simple model, I know we have 2 rates, one for Chinese, another for Elective, we need to do in-depth analysis accordingly.
In addition, there are different scenarios, such as, numbers of students with discount, sponsorship,schoolarship, so sensitivity analysis is mandatory too.
There are a lot we can do to make this school's operation more efficiently, reasonably and fairly.
June 12, 2007 8:34 AM 待续
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10 comments:
great suggestions!
这样的建议性言论才是真心地为学校好。谢谢了！！
Very true. We should give back the cash we are setting on to parents by lowering tuition.
NWCS has the highest tuition and shortest instruction hours among the Northwestern Chinese schools in Puget Sound. I feel shame of it, personally.
regarding "NWCS has highest tuition rate & shortest instruction hours" in Puget sound region - if you could provide a brief tally of comparison of tuition & hours, it'll be very helpful to the Board. hopefully the Board will do something about it.
Haha, if after the careful analysis, the outcome is we need to increase the tuition to break even, probably I will be blamed by all of the parents.
Hopefully, this blog will not become a tool to let competitors attack our school.
The School does have its own advantages other ones can't compete. Who else can provide a well-equiped cafeteria to allow parents to enjoy the interactions while their kids are learning? As I know, our school is the biggest one in NW, and we do have a lot of capacities to do things others can't afford.
We have a great pool of talented parents here. So I think the best way for avoiding the conflict and complaining is try to call these parents participating more and more. Show up from the shadow, at least positively in voting the board members, so the competent members really represent parents, students, and school, instead of some person without any ability. We trust a functional board will select a competent, creative principal for us.
Second, to avoid the mess, the principal should not have the right to control both the human resources and money. Her/His responsibility is to raise the good proposal for the board, once the board agreed, the proposal has to be performed accordingly. No any secret hiding, the most qualified teacher should get the best pay. not qualified person has to be replaced for the sake of our kids. All the money flow should be open to the accounting person in the admin and the board members. In fact the money flow should be monitored by these person. What's the "privacy"?"what's the interest conflict? The transparancy is the only way to avoid this kind of issue, and that is the only way to make the school money flow running in the normal track. A reasonable cash flow is a must for school for sure, but there must be something wrong behind an unnormal phenomenon. That will cause someone to lie. And that will raise a series of problem, like huge amount CD.
So I call those talented parents again to involve more about the school issues, at least in selecting the board members, and the principal, because they are representing us to make the decissions. They should be real qualified person to deal with the school issues. Most importantly, they must know who they are!!!
For the sake of our kids.
Concerned parent.
agree. the Board should be more involved. setting teachers' pay rate should be checked/supervised by the Board. someone on the Board should co-sign checks.
Board should not be given total powers either. Anyone in control of money will become corrupted, its just a matter of time
INTERAL CONTROL ISSUE.
As others has mentioned before in this blog, The key to prevent any similar accidents and controversy we currently facing is to improve the internal control and “Check and Balance” mechanism within NWSC organization. NWSC need to revise its by-law and financial guidelines to better protect its assets, assist in its proper management and prevent potential abuse of power or corruption by any individuals. With this goal in mind, I hope the new BOD will consider setting up and implementing some of following financial control measures to monitor and record assets received, held and expended.
These financial controls should be described in an accounting policies and procedures manual. The manual should be reviewed with and given to all directors and Administrative staffs, employees and volunteers. It may include procedures for:
º Preparing an annual income and expense budget and periodic reports – at least each semester preferably monthly - comparing actual receipts and expenditures to the budget with timely variance explanations.
º Writing and signing checks or vouchers and receiving, recording, securing and depositing cash and other receipts. Such procedures should ensure that no single individual is responsible for receiving, recording and depositing funds or writing and signing checks.
º Ensuring that tuitions, fees and contributions received are properly recorded, accountings required as a condition of any contribution are completed and restrictions on the use of such funds, such as contributions given for a restricted purpose (e.g. scholarships, classroom funds), are obeyed.
º Requisitioning, authorizing, verifying, recording and monitoring all expenditures,
including payment of invoices, petty cash and other expenditures. Such procedures should ensure that no single individual is permitted to request, authorize, verify and record expenditures. For example, the same person should not be responsible for cash disbursements and bank reconciliations. These functions should be assigned to different individuals.
ºProviding for regular oversight by an audit committee or, if there is no audit committee, by the board of directors itself.
º Reporting to the audit committee or board by employees and volunteers of allegations of fraud or financial improprieties.
º Ensuring that timely and appropriate financial reports are distributed to all directors and reviewed by them, as well as the president and treasurer.
º Providing procedures for approving contracts to which the organization is a party,including securing competitive bids from vendors.
º Making clear the responsibility of all individuals involved with the organization, including the board of directors, employees, volunteers and consultants, maintaining an organizational chart and updating such information as necessary.
º Developing a prudent investment strategy and providing proper oversight of the investment assets. i.e CDs.
º Complying with governmental and other reporting requirements, including watchdog agencies.
º Complying with obligations to members, employees and the public, including their right to view NWSC's tax return.
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The above-mentioned is exactly from Corporate Controllership's view. I am glad there are more people with their expertises to provide meaningful insights to help the School operate in line with Internal Control Concept and Legal Requirement.
GAAP for Not-For-Profit is specific, I guess there must be someone in our parents with rich knowledge and experience in this regard.
The more we contribute the ideas to the School, the better off.
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