This meeting calls for a full, independent financial review of the Institution’s operations
Why do we call for a full, independent financial review?
The annual financial reports make it difficult for members to gain a clear
understanding of the true financial situation of the Institution, including its trading subsidiaries.
Any attempt to understand the financial performance of the subsidiary businesses under our trading arm is thwarted by the inconsistent approach to allocating central costs between our charitable activities and commercial activities, making overall trends impossible to discern.
The financial health over a 3-year rolling period should be measured by applying consistent standards and should show a steady and reliable picture of prudent financial management. Our annual accounts fall considerably below the required standard for such clarity and openness.
The sale of the Institution’s publishing business in 2010 converted an asset of the Institution into cash, received in the form of an up-front payment of approx. £11m followed by staged receipts over the following 5 years amounting to a further £10m, around £21m in total. However, since 2014 the Institution has been eating into this large injection of funds as can be seen from the fall in our unrestricted funds (excludes those ringfenced funds to support awards, scholarships, etc).
Extracting the funds from the sale of Publishing from the Consolidated Annual Accounts allows us to see the underlying operating income for the whole Institution. This is a disaster. In effect, the Institution has been loss making since 2011 and in very steep decline.
All the above is in total contrast to the messages put out by the CEO and the Trustees!
And what has been happening to the CEOs remuneration during this period? Extracted from the annual accounts are the following figures.
Note: A more complete analysis of the Institution’s finances, including the latest figures from the 2017 Accounts, can be obtained from Patrick Kniveton at email@example.com or Andrew Ives at firstname.lastname@example.org
It is clear that something needs to be done and the starting point must be a full and independent financial review.