View source for 2013Q3 Reports: Treasurer

'''Treasurer's Report to ACL Executive for year ended 2012-12-31'''<BR>
'''Graeme Hirst, Treasurer'''<BR>
July 2013

Attached are four files summarizing the ACL's finances for the calendar year 2012.


FILE 1:  Our  [http://ftp.cs.toronto.edu/pub/gh/ACL-balance-sheet-2012.pdf balance sheet], which shows a snapshot of our assets and liabilities at 31-Dec-2011:

On 31-Dec-2012, we had about $701,000 in the bank and another $184,000 in abstract assets such as deposits and advances that we have prepaid for future conferences.  Against this, we had liabilities of $213,000.  This number is anomalously high, as it includes substantial then-unpaid bills from the ACL 2012 Jeju conference for which the invoice was sent only in late November 2012; normally the invoices would have been sent to us much earlier and paid well before the end of the year.  Other liabilities include multi-year memberships and money owed to The MIT Press for Computational Linguistics (see below).

Thus our net equity is just under $673,000, up a little from $658,000 last year; ideally, it would be substantially even higher.(*)

A substantial proportion, about 37%, of ACL's equity is in the subaccounts of chapters and SIGS.  NAACL's subaccount balance (taking into account the conference results below) was $54,000, and EACL's was €9600.  SIGs collectively have just under $180,000, of which $114,000(**) is SIGDAT's (surpluses from EMNLPs are piling up) and $39,000 is SIGDIAL's.  Other SIGs have balances ranging from a few thousand dollars down to zero or less (SIGPARSE has a $2800 deficit).

(*) We need to maintain very substantial equity for two reasons: (a) We need to be able to survive disastrous losses on conferences, perhaps two in the same year, as in 2010.  (b) When we sign contracts with hotels and convention centers for $100-400K of conference services, these businesses are extending us a very large amount of credit (even though we also pay big deposits), so we undergo credit checks which, obviously, we need to have sufficient assets to pass.

(**) This figure does not include SIGDAT's share of the surplus from the Jeju conference, which is not yet computed; see below.


FILE 2:  Our [http://ftp.cs.toronto.edu/pub/gh/ACL-P+L-2012.pdf overall profit and loss statement]  (technically so-called even though we are a non-profit organization and therefore have surpluses, not profits):

Note that some lines on this sheet are misleading because they are horizontal sums that aren't particularly meaningful (such as the sum across the conferences at Jeju, Montreal, and Avignon of the costs of each component of the banquets).

Our overall revenue in 2012 was $1.37 million, which is substantially more than in 2011.  The primary reason for the increase is, of course, that we had three *ACL conferences in 2012 instead of the more-usual two (and under the new conference calendar, two per year is now our steady state).  Overall expenditure in the year was $1.35 million, giving a net income in the calendar year of $15,000.  However, this is not a surplus on our operations for the year, because as noted above, it does not take into account various unpaid bills.  In fact, our activities for 2012 made a loss overall.  See below for details of major expense and income classes.


FILE 3:   [http://ftp.cs.toronto.edu/pub/gh/ACL-P+L-conferences-2012.pdf Profit and loss statement for conferences]:

(a)  The EACL 2012 conference in Avignon made a surplus for EACL of €2850 on gross revenue of €159,300 -- a razor-thin margin.  (The statement shows a slightly larger surplus, but the local organizers' own accounting in euros produced the smaller amount and this is what they remitted as an absolute final payment; the difference is apparently due to some late registrations not being counted.)

(b)  The NAACL 2012 conference in Montreal made a moderate surplus of about $22,000 for NAACL on gross revenue of $371,500.  This includes a windfall tax rebate of $17,300 from the Canadian government under a program that encourages international conferences to locate in Canada.  SIGs that sponsored events at the conference will share in the surplus; I have not yet completed the allocation of costs and income to the individual components of the event.

(c)  The ACL 2012 conference in Jeju, including the co-located EMNLP/CoNNL conference, posted a surplus of $51,000 for ACL on gross revenue of $571,000.  SIGs that sponsored events at the conference will share in the surplus; I have not yet completed the allocation of costs and income to the individual components of the event.

(d)  In addition, two independently-located SIG-sponsored events, INLG-2012 and SIGDIAL-2012, each made a comfortable surplus for its SIG.


FILE 4:  [http://ftp.cs.toronto.edu/pub/gh/ACL-P+L-core-services-2012.pdf Profit and loss statement for the journals, membership, and operations]:

(a)  The CL journal, of course, has no income any more.  The costs, about $50,500 in 2012, are supposed to be covered by membership fees and surpluses from the ACL conference.  They comprise the cost of the editor's part-time assistant and services (copyediting, typography, online distribution) by The MIT Press.  Because of erratic billing by The MIT Press, by the end of 2012, we owed them a large amount of money ($85,400) for past services dating back to 2010 that we were just waiting for them to invoice us for.  (This has since happened and the debt has been paid.)  The amount of $65,596 shown includes not only the portion of this debt that was accrued in 2012 ($38,500) but also approximately $27,100 of the costs for 2011 that were unknown and hence not included in last year's statement.  The additional $19,800 of our debt to The MIT Press was accrued in 2010.

(b)  Our new journal, TACL, has not yet started incurring costs.  This journal has been designed to be cheaper than CL by forgoing both the quality enhancements of professional copyediting and typography and online distribution through a publisher.  Moreover, the editors are presently working without any paid editorial assistance.

(c)  Membership is required for attendance at any ACL conference, and many people do not pay for memberships any more except when registering for their first conference each year.  (Also, we still have many multiple-year memberships current from past years when we "gave away" one-year memberships, or membership extensions, with HLT registration.)  We grossed $97,700 in memberships in 2012; the cost of processing and other membership services was about $14,400, leaving a net income of $82,300 in this class.

(d)  Miscellaneous income and operating expenses:  Income here includes such things as interest on our bank accounts and bonds, and expenses include office rent and utilities, insurance, bookkeeping and accounting, Business Manager's time not allocated to other specific classes, and the cost of maintaining the ACL Portal.  Our net operating cost was $52,100.  Covering these expenses from membership fees leaves us with about $31,000 for the costs of the journal, giving it a deficit of about $19,500 for 2012, to covered from conference surpluses.  

(e)  Not shown on this spreadsheet, because they cut across a number of categories, are scholarships, sponsorships, and other awards.  These include awards to students to attend conferences and the annual Johns Hopkins Summer School, and contributions to the cost of events organized by other CL and NLP groups.  These awards are made by the chapters from their subaccounts, by central ACL from the Walker Fund, and by the organizers of student research workshops at conferences from funds that flow to us specifically for this purpose from sources such as the U.S. National Science Foundation and some of the conference sponsors (and hence appear as conference income and expenses).  In 2012, these awards totaled $94,500.  


OTHER MATTERS:

ACCOUNTANT:  We rely on the services of an accountant to take the books produced by our bookkeeper, Chiaki Nemoto, and turn the data into our required annual filings with the U.S. Internal Revenue Service and the State of New Jersey Division of Consumer Affairs (which oversees non-profit organizations registered in that state, including us).  We have been increasingly dissatisfied over the last few years with the service rendered by our accountant.  After a search for a suitable replacement, the Exec has ratified the engagement of Mr Tom Dartnell of Nisivoccia LLP, who has extensive experience with U.S. federal and state filings for non-profit organizations in New Jersey.  He will begin his work next month with an audit and the filing of returns for calendar year 2012.

THE SAFETY OF OUR EUROPEAN ASSETS:  About half of the ACL's assets (€268,000 as of 2013-06-30) are held in euros in investments and accounts in Malta, where they are overseen by the EACL Treasurer, Mike Rosner.  (But they are nonetheless ACL's assets, not EACL's; EACL's relatively small subaccount is contained therein.)  The recent bank failure in Cyprus, with partial confiscation of large deposits to help pay for a bail-out, has understandably made people nervous about the safety of bank deposits and other investments in other small eurozone nations on islands in the Mediterranean.

Obviously, the government of Malta is concerned about this perception, and asserts that Malta is not at risk.  Mike Rosner writes: "Obviously, anything can happen, but I have seen several articles in the press claiming that the case of Malta is quite unlike that of Cyprus (see quoted article below). More significant is that the results a recent study on imbalances commissioned by the EU (published April 2013) did not find that Malta had any significant imbalance and praised the Maltese Central bank and the Maltese banking system for its prudent approach."

--------- 
''The Times of Malta, 2013-03-27''

Central Bank Governor Josef Bonnici has dismissed as “misleading” any comparison between Malta’s banking system and that of Cyprus.

He said the size of the Maltese banking sector relative to GDP was strongly influenced by institutions that virtually had no economic or financial links with the economy.  He insisted that assets of the all-important banks amounted to “just below 300 per cent” of GDP, which was within normal limits.

Unlike Malta’s core banks, the large Cypriot banks were also very active internationally with a high dependence on foreign sources of funds and high exposure to losses on foreign assets.

“The problems facing Cypriot banks included losses made on their holdings of Greek bonds, whereas Maltese domestic banks have limited exposure to securities issued by the programme countries,” he said.

''end of quotation from Times of Malta''
-------------------

Mike groups our Maltese assets into four risk groups as follows (where 0 is the lowest risk):

0. Insured current bank deposits €52,000*<br>
0. Guaranteed bank term deposits €76,000*<br>
1. Government bonds		 €20,000<br>
2. Bank bonds			 €15,400<br>
3. Company bonds		€104,700<br>
*Jointly covered up to €100,000.

It should be understood that category 3 is not a high risk in absolute terms.  Mike notes that "all these companies are 'gilt-edged' in local terms -- well established and backed as well as being economically successful. They are generally felt to be pretty safe provided they are held to redemption. There is not much of a market for buying and selling them mid-term."  

Nonetheless, as they mature we should consider diversifying our bond investments into other economies.  The maturity dates cover the period from 2014 to 2020.

As context for the above discussion, it should be noted that the other half of our assets (around $300,000 as of 2013-06-30) is held in U.S. dollar bank deposits in the United States.  In 2008, that country also suffered a number of failures of banks and other investment houses, including the bank in which our deposits were held, Wachovia Bank.  Fortunately, no deposits were lost when this bank was merged with another, Wells Fargo, which now holds our accounts.