The Chinese Economist Society (CES) Annual Fiscal Report
November 1, 2002 – October 31, 2003
Finance Committee
December 15, 2004
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, 2002 through October 31, 2003 (FY01-02). This report includes 7 sections: (1) amendment to the FC Bylaw and personnel change, (2) assets, (3) contribution to the CES core account, (4) FC expenses, (5) president compensation, (6) accounting system, and (7) Chow Family Fund.
1. Amendment to the FC Bylaw and personnel change
During this fiscal year, two amendments to the FC Bylaw have been passed: (1) the amendment on FC membership, and (2) the amendment on the principles of using the CES core fund. The amended FC Bylaw replaced the “no limit” on FC membership with a five-year term limit. To follow the new FC membership Bylaw, we have started a plan that retires the existing members in five years. In August 2004, FC had several personnel changes: Dr. Ping Chen, our first FC chair, left FC; Dr. Baizhu Chen, a CES former president and professor of management from South California and, joined the FC; Dr. Jason Yin, our former CES president, and professor of management and Chair of the Management Department at Seton Hall University, has taken the Chair’s position. I will serve one more year as the FC member to smooth the transition and will leaving FC in 2005. We plan to add one new member each year in the next three years to replace those who have served more than five years in the FC. The second amendment specifies the principles of using the CES core fund managed by the FC. The most important change in this amendment is that FC members cannot fund themselves for any CES initiative. The only allowed expenses for the FC is management costs. Please see the new FC Bylaw for details about this change.
2. Assets
As of October 31, 2003, the value of total CES assets was $403,875, increased from $163,344 on October 31, 2002. This increase was due to two main factors. First, Professor Gregory Chow donated $200,000 to CES and $196,000 was directly deposited to the CES core fund. The second factor was the gains from our investment in the US stock market. The total unrealized gains on October 31, 2003 was 24,158, a 14.8% return.
From November 2001 through October 2002, the following officials operated CES financial transactions:
Shunfeng Song President, 2003-2004
Shuanglin Lin President, 2002-2003
David Li President, 2001-2002
Aimin Chen President, 2000-2001
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 FY2003 (November 1, 2002 – October 31, 2003).
3. 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
Shuanglin Lin 2001-02 $0
Shunfeng Song 2002-03 $0
Please note that both Presidents Lin and Song have not completed their planned tasks. They may have surplus when they close their accounts.
4. FC expenses
FC pays for bookkeeping, preparation for tax return, auditing, president compensation, and administrative expenses. The total FC expenses during FY2003 were $2,665. Of the $2,665, $1,004 was the travel expenses for Jason Yin and I to propose our amendment to the FC Bylaw at the CES business meeting at University of Michigan, $1,500 was for accounting services and preparing tax return, $161 were administrative expenses.
5. 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.
6. Accounting system
The CES started a new accounting system since 1997. Between 1997 and 2003, CES financial transactions (bank statements and used checks) were recorded by Ronald A. Gacicia, CPA. Starting in 2004, Joseph Yung, CPA, has taken the responsibility of maintaining CES accounting system and preparing for tax returns. Mr. Yung is a very responsible and professional accountant.
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 the 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 after incorporating comments from members.
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 (FY 2004)
