4. FINANCE COMMITTEE
4.1 REPORT FROM FINANCE COMMITTEE MEETING, FEBRUARY 2000
Dr. Przybylowicz noted that due to his inability to fly to Z�rich
because of bad weather, Prof. Ward had chaired the meeting.
Specific items discussed at the Finance Committee meeting of
interest to the Executive Committee would be discussed under
the appropriate headings of the subsequent agenda items.
4.2 STATEMENT OF ACCOUNTS FOR 1999
Dr. Buxtorf observed that the overall financial situation of
the Union is very good. He noted that 51% of the Union's revenues
came from National Subscriptions, more than 33% from publications,
and 15% from dividends and interest plus miscellaneous sources.
He reported that the Finance Committee had had an extensive
discussion of the desirability of taking exchange rates into
account when setting National Subscriptions. It was decided
to continue using US dollars because any attempt to change to
an alternative, such as a basket of currencies, would lead to
excessive complications. Special situations would continue to
be handled on a case by case basis.
4.3 NATIONAL SUBSCRIPTIONS
Dr. Buxtorf reported that the Finance Committee had discussed
the current formula for calculating National Subscriptions and
had concluded that the formula should not be changed. The Executive
Committee recognized this discussion and approved the decision.
4.4 REVIEW OF BUDGETS FOR 2000-1 AND CAPITAL BUDGET FOR 2000
Dr. Buxtorf noted that care would have to be exercised in considering
requests for additional funds from the operating reserve. How
do we make sure that the first to apply do not gain funds at
the expense of later, possibly better, projects? Dr. Becker
described the evolution of the procedure for approval and funding
of projects, as described under item 14. He pointed out the
need for flexibility in funding during the transition period,
2000-2001, when Commission operations consume a large fraction
of divisional budgets. He briefly reviewed the situation in
Division VI that had led to a request for funds in addition
to the original budget as an example.
Dr. Hayes asked that the column labeled over/under in the Management
Accounts Reports be instead labeled favorable/unfavorable to
make interpretation easier.
4.5 ALLOCATIONS TO IUPAC BODIES, 2002-3
Dr. Becker briefly described the earlier discussions of how
to approach the subject of allocation to IUPAC bodies in 2002-3,
especially to Divisions. The scheme labeled C in the paper from
Prof. Ward had been adopted by the EC last year as that giving
the most flexibility. The intention is to increase the allocation
to Divisions in future biennia based on the experience gained
in allocating the undistributed Division/Standing Committee
reserve during the biennium on the basis of needs. There was
a discussion of the value of a zero based budget approach to
allocations. The conclusion was that such an approach, while
attractive in the abstract, had too many practical difficulties
to be adopted.
4.6 COMPANY ASSOCIATE FEES
Dr. Jost reported that a letter that had been sent to those
NAOs whose Company Associates paid their fees directly to the
Secretariat. The responses received covered all the possibilities
regarding the use of the fees. Most NAOs had not responded.
Fees from Company Associates of those NAOs would continue to
be added to the general funds of the Union. Dr. Jost also noted
the certificate of membership developed for Company Associates.
These certificates have been sent to the NAOs for distribution
to Company Associates when they have paid their 2000 fees.
4.7 OFFICIAL IUPAC ADDRESS - ACTION
The change of the Union's official address to Reber and Co.,
Z�rich, Switzerland proposed by the Finance Committee was approved.
4.8 DISCUSSION OF INVESTMENT POLICY STATEMENT
Dr. Przybylowicz informed the Committee that USD 200 000 had
recently been taken from the Union's checking account and invested.
In addition, USD 50 000 had been transferred from the operating
reserve to the Southern Hemisphere Fund and USD 600 000 had
been transferred from the operating reserve to the Endowment
Fund. The return of the investment portfolio had been ~11% in
1999. The Investment portfolio was invested in stocks and bonds
with a ratio of 60:40. The stock portion of the portfolio was
invested in US and European funds in a 60:40 ratio.
Dr. Przybylowicz described the reasons for the proposal of the
Finance Committee to adopt an Investment Policy Statement. The
Committee felt that such a statement would be useful in communicating
with the Council and other groups. The Executive Committee asked
the Chairman of the Finance Committee to continue development
of an Investment Policy Statement. In addition to the subjects
covered in the draft statement, the final statement should include
a discussion of the Operating Reserve, the Endowment Fund, and
the Southern Hemisphere Fund. The Committee suggested a separate
policy statement be developed regarding the use of the income
from the Endowment Fund. After approval by the Finance Committee,
these statements should be brought to the Executive Committee
and the Bureau for approval in 2001.