Looking at the PASS FY 2019 Budget

I just spent a few more minutes looking at the FY 2019 budget. It is hard to assess whether it’s good or not beyond being balanced (and that is based on hitting the revenue goal for Summit – if that comes in low, then adjustments would be required). I want to call out a couple of items that bother me a little, with the warning that it’s very hard to be sure we’re comparing apples to apples.

  • The biggest item (from the blog post that references the budget) is the change from a hot breakfast at the Summit to coffee/pastries. $400k savings. One on side I think if its not a highly valued part of registration, sure, cut back to something simpler. On the other side, unless my registration code goes down by $80-$100 (I’m guessing 4000-5000 attendees) then I’m being paying the same and getting less! At best this can be framed as “we had a choice of increasing Summit registration cost or reducing the breakfast benefit”. Which is fair? I don’t know. Cynically, practically, I’m guessing few will argue and/or miss the hot breakfast. So leaving out the framing, in terms of managing Summit costs I think it’s a valid approach. As a tool to eliminate the budget deficit…well, it’s back to framing, right? It feels like a shortcut.
  • Related to that and not called out in the budget (by the nature of how it works), it’s hard to see where we got off track. Did we not manage Summit revenue vs expenses well for the past couple years to the point that a “correction” was required? Or have we added other costs in other areas?
  • I looked back at the 2017 budget to see what the amount was for corporate admin. It was 1,680,234.38 for 2016, $ 2,050,575.11 for 2017, 1,939,911.51 for 2018, and $ 2,052,946.35 for 2019. Worth asking, again, is what we changed in 2017 that increased the admin costs by $400k? Did the buckets change? Or did we add staff/overhead? It bothers me because, perhaps coincidentally, we had to trim $480k or so to balance the budget. I’d really like to understand that change better.
  • Finally, at the bottom of the blog post is a reference to unbilled hours by HQ. It’s the first time I recall seeing this information and it raises concerns. First, should be paying overtime? I don’t know Canadian labor law so I’m hoping that we don’t have anyone that should have been paid overtime. Next, are we taking care of people, are they getting comp time to offset this, or a big end of year bonus? Does the Board monitor this during the year? Is this something we should even see? We’re paying x dollars (about 2 million of them) for a set of services. The whole point of the contracting this out is that we just get a bill to pay and don’t have to get into the weeds. Cynically, perhaps unfairly, this feels like justifying the $2m in overhead and saying it should really be more.

It’s hard to figure it out. Let me give you a more concrete example. Postage costs for mailing Summit USB sticks went up from $18k to $26k. It’s hard to tell without really digging in if that is because we expect to mail more of them (should be a good thing), if the cost went up a lot(!), or some combination of the two. Even then, if the sales of recordings minus the costs of recording and distribution is positive, do we care a lot? A little bit.

Suggestions to make it easier to consume:

  • Display current + past 3 years so we can see the trend.
  • Annotate changes. I think this helps the Board and us. Someone can look at the USB shipping costs and read the note that says “postage went up $3 per item or expecting to sell 10% more this year or whatever)
  • Include something to help us understand corporate overhead. Project managers often use a “blended” rate per hour so that employee costs can be discussed without getting into salaries. More simply, maybe just a number of full time employees or equivalents. I’d expect employee costs to increase year over year just due to raises and we could kind of see that if the FTE count stayed the same. Equally, if the FTE count jumped we’d expect the budget to go up (and would see that in the annotation too!).

The good news is we’re closer to a balanced budget. Bad news? Maybe none for now, the ship is still afloat. But rather than agree with me (or disagree if you prefer), I hope you’ll pour some coffee and read the budget. Look for the delta between years. Think about what goes into some of these items. Find places to ask good questions, questions that might help everyone better understand why a given item is what it is. While it may be hard to consume, it’s there for the reading.

One thought on “Looking at the PASS FY 2019 Budget

  1. Thanks Andy. I feel the same about the OT hour table. Why was this added? Annotations is a good idea. It is good to know PASS is using a balanced budget.


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