Monday, May 9, 2016

Show me the money

It’s budget time for our synagogue, which means the board is reviewing a spreadsheet of the past couple of years of budgeted line items, actual expenditures, projected expenditures, and next year’s proposed budget.

The budget numbers are presumably reviewed and discussed in some detail by the finance committee. The head of the finance committee resigned last winter, and I don’t think he’s been replaced. The finance committee discussions (if there are any) are not really reported, so we don’t know which line items they have examined carefully or what conclusions they’ve drawn.

At the last board meeting, people raised questions about random line items. It didn’t matter whether the line item was a summary line for a $200,000 operation or a $250 expense. The response was the same for pretty much all questions: it’s too hard to know why we’re spending that money, changing it won’t really affect our overall budget, or this is not the right time of the year to try to change that item.

I’m not sure how any of this should ideally work, but it’s pretty clear that the current approach is far from any ideal. Some suggestions:

Some items are non-discretionary and/or non-negotiable. We should know what we’re spending on worker’s comp insurance or employment taxes, for example, but we cannot change them except as a side effect of changing our payroll. Those items should be marked in the budget, because they are not worth discussing on their own.

Some items are recurring annual expenses that should be shopped around periodically, such as property and liability insurance ($21,000 per year) or photocopier leases ($7000 per year). We should track when each of those was most recently verified to be a reasonable price and when contracts are due for renewal. The board or the finance committee should discuss how often the prices should be examined and make sure a plan is in place to have an actual person do the actual work, not sit around speculating at length about what a reasonable price might be.

Some items such as advertising for our preschool are optional expenses, where we should discuss how the money is being spent, whether it seems to be effective, and whether we should allocate more or less money to that item.

Our goals in reviewing the budget should explicitly be to verify that it is accurate, identify ideas for raising revenue or decreasing expenses, and to identify what choices we actually have and understand the budget implications of those choices.

None of that is happening in a coherent fashion, and I object to that. Recurring annual expenses are not being shopped around periodically, and I object to that. There are specific optional expenses which are being wasted with no oversight, and I object to that. But I don’t know if those objections add up to enough reason to vote against the proposed budget for next year. It would be a symbolic protest vote, because there is no actual hope of forcing a change in practice or a change in the proposed budget. The executive committee talks about the board having an obligation to approve the proposed budget, but has not provided any meaningful path for the board to change or even productively question any aspect of the budget. I’d rather not vote at all.

No comments: