[Announce] linux.conf.au 2014 Financials

Hello community, This email is to inform you of the current financial position of LCA2014 and the Council's plans for the longevity and continuation of the conference. What has happened? ================== linux.conf.au 2014 books are nearly wrapped up after an excellent event in Perth. The conference is looking to have a final loss of approximately $40k. Why has this happened? ====================== There are are a number of contributing factors. When selecting a host city for linux.conf.au 2014, we were aware of the higher cost of running the conference in Perth, largely due to geographic location and cost of services. We also knew the team was expecting to hire an events manager for help which would increase costs. Nevertheless the conference team did not want to lose the format or community feel, in neither the bid nor the event, that is so integral to linux.conf.au. The Council accepted the Perth bid with the preliminary budgets at the time showing a positive return. The change in the state of the conference budget occurred slowly over the year leading up to the conference. It is difficult for a conference team to estimate how many attendees to expect. Constraints were encountered with availability of the key venue, leading to a less than desirable date for the conference, and sales figures were lower than previous years. Unfortunately due to poor tracking of the forecast financial state it was not discovered that the conference was heading towards a loss until it was too late. Commitments had been made with suppliers/vendors and non-refundable items purchased. However the Council stands by the fact that it is better to run a linux.conf.au at a loss than not to have a conference. This has clearly highlighted some areas in which Linux Australia needs to address. While we have the cash reserves for exactly this scenario it is clearly unsustainable and measures need to be taken to mitigate the risk of it happening multiple years in a row. What immediate actions are being taken to address the situation? ================================================================ A lot can be learned from this experience and the Council is taking action to secure the finances for the organisation into the future. We have followed up on the last outstanding debtors and creditors to confirm the situation. The Council has reviewed the Linux Australia operating budget for the current financial year (running from 1st of Oct 2013 through to 30th of Sept 2014) and has made amendments to reduce expenditure. These amendments will be published in the next few weeks for transparency. The Council has also prepared a draft scenario budget for the following financial year which shows a healthy growth back to a similar level of equity. What actions are being taken to prevent something similar from happening in the future? =============================================================================== The primary action already in motion by the Council and respected ghosts of past conferences (not limited to LCA) is to rework the subcommittee structure. This has been described in a previous email[0] and can be found here[1]. These unfortunate circumstances highlighted the need for better oversight, risk management and budgetary tracking that is being addressed by the new subcommittee policy in the following ways: 1. Past organisers and community members outside of the conference will be better embedded in the executive leadership of the conference. They are to ensure logistical and budget items are not overlooked. 2. process for proposing and approving budget. 3. Formal documentation requirements on significant items contributing to the budget (such as venue contracts etc). 4. This results in a more informed Council and better alignment between projected and actual expenditure. 5. Requiring subcommittees (including non LCA conferences) to return a profit. The Council is also implementing a formal Risk Register, with a risk breakdown structure that covers all of our core activities, such as linux.conf.au and financials. The Risk Register will be reviewed regularly and mitigation actions undertaken to address risks proactively where justified. We are also working with linux.conf.au teams to restructure the budget so that conference activities are funded in a sustainable manner. We are improving the processes and materials available to better assist Subcommittees in managing finances, enabling better decision making and financial modelling. What does this mean for linux.conf.au and other conferences? ============================================================ As an attendee? Nothing. linux.conf.au will not change its format, nor will prices increase significantly[2]. We do not expect the feel, structure or atmosphere of the events to be affected. None of Linux Australia?s conferences are expecting to change due to these circumstances. At this point we are purely adding additional risk mitigation procedures. What does this mean for Linux Australia's activities? ===================================================== Linux Australia has yearly operating expenses in the range of $50-60k each year, incorporating activities such as grants, face to face meetings of Council, reviewing future bids for future linux.conf.au events, seeding other events and administrative costs such as formal auditing and bank fees. Linux Australia relies predominantly on the profit from linux.conf.au to cover its operating costs, and to a much lesser extent on earnings from interest bearing accounts. This means that in all likelihood we will need to curtail some activities in 2014, such as the amount and quantity of grants that are awarded. There are some costs which cannot be easily reduced, such as the costs for auditing the organisation in line with NSW law. Although a loss is forecast, we still have significant equity as an organisation (> $300k), and our future is not in jeopardy. We simply need to 'tighten the belt' for a year. Even with a smaller budget for grants and activities the Council does not expect to be any less approachable than in past years and wishes to continue encouraging the community to be active. What does this mean for Linux Australia's future? ================================================= To be clear, our future is not under any threat. This scenario is one that has been predicted and planned for by previous Councils, and is one of the reasons a large cash reserve has been held by Linux Australia. We are working hard to ensure a similar financial loss does not occur again. Our long term goal is to ensure Linux Australia has the cash to fund an linux.conf.au if for some reason in the future it is necessary. This means returning our financial reserves to a level that could absorb running a linux.conf.au. What does this mean for Linux Australia members or me? ====================================================== Nothing is changing. However, I would like to continue encouraging our community to keep up the awesome work we are doing. Please keep volunteering and looking for more ways you can contribute. It is our awesome members that make this organisation what it is. As always your comments and feedback are warmly welcomed. Kind Regards, Joshua Hesketh - President, Linux Australia [0] http://lists.linux.org.au/pipermail/announce/2014-May/000180.html [1] https://github.com/linuxaustralia/constitution_and_policies/blob/master/new_subcommittee_policy.md [2] Our Hobbyist and Professional prices have never risen above inflation https://docs.google.com/spreadsheet/ccc?key=0AjWLKrdgysx1dHFFWU80ZVJReWEzRUIxbmNsLVlWVHc&usp=drive_web#gid=9 -------------- next part -------------- An HTML attachment was scrubbed... URL: http://lists.linux.org.au/pipermail/announce/attachments/20140601/18537e65/attachment.htm -------------- next part -------------- A non-text attachment was scrubbed... Name: signature.asc Type: application/pgp-signature Size: 884 bytes Desc: OpenPGP digital signature Url : http://lists.linux.org.au/pipermail/announce/attachments/20140601/18537e65/attachment.pgp