Treasurer's Commentary on 1997
Accounts
The balance sheet and bottom line of the income and expenses
account show a deficit of income on expenses of USD 238,164 but
this amount takes into account the cost of moving the Secretariat
from Oxford to Research Triangle Park, North Carolina, some USD
240K, and the cost of several extraordinary meetings called to
discuss and formulate the future strategy of the Union, USD 52K.
These items were discussed and approved by the Executive Committee
and the Bureau but were not put into the budget because these
were non recurrent items. If the costs of these items are removed,
the deficit becomes a surplus about USD 54K. Even if these are
included, the surplus from 1996 (excluding the Barings windfall)
of USD 290,690 added to the deficit of USD 238,264 gives a biennial
surplus of USD 52,526. The principal causes that give rise to
these figures, and our being able to move the Secretariat and
stage several extraordinary meetings yet finish the biennium
with a small surplus, are that the Publications surplus was some
USD 110K over budget and that the Geneva Assembly came in USD
83K below budget against all expectations due, in turn, to the
absence of a number of TMs and to the cost of air fares remaining
flat. Also, in spite of my exhorting Division Presidents to use
all their allocations, and granting substantial extra funds to
Division II, there was a divisional biennial underspend of USD
48K.
Our reserves remain strong. The heavy calls on funds to cover
the exceptional items during 1997 reduced the value of the total
reserves from USD 3,582,324 to USD 3,525,912; a fall of 1.6%;
in real terms about 5%; however, over the biennium there was
an increase in value from USD 2,753,916 to USD 3,525,912, 28%;
in real terms, 19.5%. But this figure is inflated by the Barings
windfall, without it, the biennial gain was 7.9%. Our investment
strategy continued to give good returns. There was a total gain
in the equities (shares) held throughout the year of 23.4% and
a total gain on bonds of 6.3% giving an overall gain on the portfolio
of 16.8%.
The windfall received from Barings in 1995, USD 343,800, has
been used to found an Endowment Fund. It is intended to use the
interest and dividends from it for special purposes, while preserving
its capital value in real terms. At the Finance Committee meeting
in February, it was decided to dissolve the Building Fund and
to move its assets to the Endowment Fund to give a total in this
fund of USD 783,405. It is hoped to encourage outside organizations
and chemical industries to make contributions to it. To this
end, part of the fund (USD 219,802) has been set aside as the
Endowment Reserve Fund that will be used to match contributions
to the main fund.
Overall, aside from the Endowment Fund and the Southern Hemisphere
Sinking Fund, the operating reserve remains sufficiently above
target to implement at once measures arising from the recommendations
of the Strategy Development and Implementation Committee including
extra funding for Divisions and Standing Committees to enable
them to accelerate the completion of existing projects.
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Page last modified 10 November 1998.
Copyright © 1997, 98 International Union of Pure and Applied
Chemistry.