The Chinese Economist Society (CES) Annual Fiscal Report
November 1, 2001 – October 31, 2002
Finance Committee
October 15, 2003
I. Report by the Finance Committee
II. Statement of Assets, Liabilities and Equity
III. Statement of Revenues and Expenses Paid
IV. Supplemental Information
Dear CES members:
On behalf of the Finance Committee (FC), I report CES financial activities and status from November 1, 2001 through October 31, 2002 (FY00-01). This year’s fiscal report is delayed because Kevin P. Martin & associates, P.C., the accounting firm that works for CES, postponed our tax return till June 2003. This report includes 7 sections: 1) assets, 2) contribution to the CES core account, 3) FC expenses, 4) president compensation, 5) accounting system, 6) FC memberships, and 7) Chow family fund.
1. Assets
As of October 31, 2002, the value of total CES assets was $154,738, reduced from $203,096 on October 31, 2001. This reduction was due to two main factors. First, the CES FY2002 president, professor David Li, was in Hong Kong. To simplify accounting matters, CES activities during FY02 were financed separately in Hong Kong as an independent CES branch. Therefore, funds raised in Hong Kong during FY02 were not included in the CES main account. The second factor was the decline of the US stock market during FY02. The value of our stock investment was down 13.7 percent from $80,597 on October 31, 2001 to $69,539 on October 31, 2002. As of October 31, 2002, 65 percent of our stock investment was in S&P 500 market index fund and market growth fund, 28 percent in small or mid-cap valued stock funds, and 6 percent in technology fund.
From November 2001 through October 2002, the following officials operated CES financial transactions:
Shuanglin Lin President, 2002-2003
David Li President, 2001-2002
Aimin Chen President, 2000-2001
James Wen President, 1999-2000
Wei Yu Chair of Finance Committee
In the section of Supplemental Information, we report financial transactions separately for each CES executive board and the finance committee. Please note that the surplus or deficit reported in the Statement of Revenue and expenses for each term reflects financial transactions only within FY2002 (November 1, 2001 – October 31, 2002).
2. Contribution to the CES core account
The surplus of each term is contributed to the CES core account. Because FC’s regular operating costs are around $4,000 per year, a president’s contribution to the CES core account is important, particularly for the past few years when our investment in stock market has negative returns. Contributions from each president since FY1996 are listed below:
President Term Contribution
Xinghai Fang 1996-97 $6,351
Jason Yin 1997-98 $7,382
Baizhu Chen 1998-99 $8,608
James Wen 1999-00 $7,167
Aimin Chen 2000-01 $5,000
3. FC expenses
FC currently pays for bookkeeping, tax return, auditing, and president compensation. The total FC expenses during FY2002 were $7,297. Of the $7,297, $3,000 was lend to President David Li to pay the honorary for a conference speaker (it has been returned in the following fiscal year), $1,570 was for accounting fees, $2,689 listed in the travel and entertainment category was for presidents’ compensations, and $38 was for postage and supplies. In general, more than half of the presidents’ contribution is to cover CES regular costs incurred at FC.
4. President compensation
The CES president receives a compensation for his/her costs of traveling for CES business meetings and of miscellaneous business activities after completing his/her term. The president’s compensation is currently consists of two parts: basic compensation and contribution compensation. The basic compensation is $800 and the contribution compensation is 6% of the net contribution to the CES core account.
5. Accounting system
The CES started a new accounting system since 1997. Under the new system, all CES financial transactions (bank statements and used checks) are recorded by Kevin P. Martin & Associates, P.C., an accounting firm (Ronald A. Gacicia, our accountant joined this company in 2002). Kevin P. Martin & Associates keeps records of every CES financial transaction, prepares an annual report, and files a tax return for CES. The new accounting system has substantially improved CES accounting standard.
On August 1, 2003, an amendment to FC bylaws was passed in the CES business meeting at University of Michigan. The amendment extended the term of FC chair from 3 years to 5 years and clarified FC’s funding protocol and tasks. In the Michigan CES business meeting, members also reviewed the CES accounting regulations proposed by FC. Because of time limit, the regulation was not voted at the business meeting. Members decided to post this regulation on CES network for further discussion. FC posted the new regulation on CES network for 30 days in August 2003 for comments. The accounting regulations become effective on October 1, 2003.
6. FC membership
According to the bylaws, FC members are elected and have no term limit. This membership structure may have potential problems of keeping FC effective in the long run. Given the nature of financial management, however, a frequent membership turnover is also not practical. In the coming year, FC is going to review this and propose a new membership structure. If you have any suggestions, please contact me (
wyu2@stanford.edu) or any of the FC members: Drs. Gene Chang (
gchang3@utoledo.edu), Ping Chen (pchen@physics.utexas.edu), Guoqiang Tian (gtian@tamu.edu), and Jason Yin (
yinjason@shu.edu).
7. Chow family fund
In FY2002, CES received a donation of $208,000 from Gregory Chow’s family to support scholarly research that promotes free-market economics in China. Professor David Li, the former CES president, contributed a great effort to establish the Gregory and Paula Chow endowment. An appendix to the CES bylaws for the Chow family fund was passed in the CES business meeting on August 1, 2003 at University of Michigan, Ann Arbor, Michigan. The fund is managed by a five-member board including Gregory Chow, a member of the Chow family, the most recent past CES president, the current CES president, and the Chair of the Finance Committee. The board funded $12,000 to support research and teaching during fiscal year 2003.
Wei Yu
Chair of CES Finance Committee
