I am just getting curious, if there will be any questions on the Presidents’ Conference in Tartu regarding the critical financial situation of the Federation.
The IOF finances have deteriorated to a point where normal business variation may result in bankruptcy, not to talk about the impact of an unexpected event.
The presidents of IOF member organisations will meet the President, the Council and the Secretary General on Wednesday, 5 July, during WOC 2017. The Presidents’ Conference is an advisory body to the IOF, typically meets every second year in between General Assemblies. Yet, all key participants are the same as on a General Assembly, hence it gives the opportunity to discuss all important IOF questions with the members.
The agenda for this years Presidents’ Conference was sent on 24 April
• Strategic Directions 2018-2024
• Strategic Planning Calendar for IOF Events
• IOF Sustainability Policy
• Update on the IOFs Anti-doping work
• Reports on on-going activities
No mention of financial questions, whatsoever, though it was clear in January that IOF finances took a nosedive after years of steady decline (see here). One may – mistakenly – believe that there are two topics where overall finances may be addressed, but that is not the case.
The strategic directions document is light on numbers (contains only dates and page numbers), despite the sad fact that finances often present hard constraints to strategic dreams.
The IOF Sustainability Policy is all about environmental impact, while the sustainability of the IOF as a financially viable organisation is taken for granted.
(Interesting to note that the Consultation Paper on IOF Sustainability includes fascinating ideas like using Eventor to make participants of orienteering events pay an environment fee dependent on where the participant travel from – but that deserves a separate post).
Yet, the Council knew already in January that the 2016 and 2017 combined financial results were expected to be €160,000 worse than the budgets the Council presented to the General Assembly 5 months before. (see 12.2 and 12.5 in Council Minutes #183).
Compare this with the IOF reserves of €114,630 at the end of 2015, and an estimated €77,000 at the end of 2016. The uncertainty in the budget forecast shown above is comparable to the reserves left after the continued decline since 2008. Another downward revision comparable to what happened in 2016 or expected for 2017 would mean that the IOF looses all its reserves. That is called bankruptcy.
The notable thing that the IOF got to this miserable state finances not due to dramatic events, but as a course of leadership continuously spending above revenues. The Council kept spending above our means.
I will discuss in a separate post how the money got spent (as much as it can be deduced from public sources), and what would mean bankruptcy for the IOF and our sport.
Accountants would call the above downward revision of 2016 and 2017 “material difference”. Finance people would call it “serious mess”. Professional managers would call for crisis management.
Yet, the IOF Council decided to discuss with the Presidents’ Conference how to rearrange the deckchairs on the Titanic.
Will the presidents accept it, or force the Council to talk about real issues?
The reality is that the presidents of member federations have no real power over the President and the Council. In fact, even the General Assembly has no real power over them. Theoretically, the GA elects the President and the Council. In practice the GA has no other option, but to elect the President and the Council. This is a fascinating practice that I will talk about it in a separate post.
Now the President and Council does what they want.
Will they have the courage to talk openly about the serious financial issues of the IOF?
IOF Reflections 