The IUBS Treasurer’s Report

For the Triennium December 2000- Dec. 2003

 

By Osmo O. Hänninen

 

 

1. Introduction

 

The IUBS Treasurer’s Report for the period 2000-2003 provides the IUBS 28th General Assembly with an overview of the Union’s finances for the period since the last General Assembly, held in November, 2000 in Naples, Italy. This document includes the IUBS audited accounts for the years 2000-2002 and the budget for the year 2003, together with a preliminary financial statement of income and expenditure as of 30 October, 2003. It also reviews the major trends of IUBS income and expenditure in relation to the implementation of its scientific programs and activities during the same period.  Finally, this document includes the IUBS Officers’ Proposal concerning Ordinary Members’ Annual Dues for the next triennium (2004 - 2007).

 

The annual financial statements contained in this report are based upon the movement of the funds registered through the Union's bank accounts. Taken by themselves, they do not provide a complete description of the financial situation associated with the IUBS scientific programs. In general, IUBS funds are allocated as a ‘primer’ to the implementation of its scientific programs; they play a catalytic role in attracting funds from other sources, which are not necessarily channelled through the IUBS' bank accounts. Also, the contribution of the IUBS Secretariat to the implementation of the Union’s scientific programs does not appear in their respective financial statements. 

 

2. Financial statements for the period 2001-2003

 

The IUBS Financial Statements for the years 2000-2002,  each ending on  December 31, were prepared and presented by Marsault & Associés (Société Anonyme d'Expertise Comptable, Paris, France) and are given in Annexes 1 and 2.  The IUBS revised budget for the year 2003 is also given in Annex 2.

 

3. Major trends of income and expenditure

 

During the period 2001-2003, hereinafter referred to as the current period, trends of income and expenditure followed the same pattern as in the previous IUBS triennia. The most salient points of this period financial statements are the following:

 

3.1. IUBS Income

 

The IUBS income is composed of the annual contributions paid by the Union’s Ordinary Members, subventions to the IUBS scientific activities received from partner-organisations, interests and dividends on bank accounts, as well as royalties from publications. IUBS loans are considered by the auditors as expenditure when they are paid and, consequently, they are treated as income when reimbursed.

 

The IUBS total income during the current period was 1 211 645 Euros, consisting of: (1) annual dues  of Ordinary Members: 1 054 847 Euros ; ICSU subventions: 81 148 Euros; subventions from other partner-organisations: 12 061 Euros; and bank interest (interest is a collective noun, and is not pluralized): 41 333 Euros. Some income has been realised through royalties from the sale of IUBS publications: 6 209 Euros (figure 1). Loans reimbursed during the same period totalled 16 047 Euros. 

 

 

3.1.1. Annual Dues

During the current period, IUBS income from Ordinary Members’ annual contributions represented an average sum of 351 616 Euros per year, compared with an average annual sum of 326 664 Euros received during the previous triennium (applying 2003’s rate of exchange of US$ to Euro). Although IUBS Ordinary Members complied with the decision of the 27th General Assembly to increase the dues at a rate of 5 % per year, a lower rate, namely 3.6 % per year, is shown in the final accounts. Two reasons explain the discrepancy: (1) delays in complying with the new dues during the first year following the Assembly;  (2) the increasing value of  the Euro with respect to the US$, which prompted some non-Euro-zone Ordinary Members to keep previous levels of contributions.

 

3.1.2. Subventions to Scientific Programs 

The subventions received during the current period from donor partner-organisations in support of the IUBS programs totalled 93 209 Euros. These subventions were received mainly from ICSU and UNESCO. Subventions received from these two partners during the current period are considerably lower than in previous triennia.

However, it is worth noting that substantial financial contributions by the Union’s partners to the IUBS scientific programmes bypassed the IUBS proper bank accounts. For example, the contributions provided by Brazil, South Africa, France, Japan, Spain and USA during this period supported programs and were allocated directly to the convenors of the programs.

 

3.1.3. Interest and Dividends

During the period 2000-2003, the management of the IUBS fund and mandatory reserve, in the form of a portfolio at Merrill Lynch, New York, USA, and current and fixed-term deposit accounts at Crédit Lyonnais, Paris, France, generated a total income of 41 333 Euros, providing  3.4 % of the IUBS total income (Annex 2).

 

3.1.4. Other Sources of Income

An additional, rather small source of income is provided by revenues from the sale of the IUBS publications and in the form of royalties and subscriptions to Biology International. During the period of reference, the modest sum of 6209 Euros has been received. It is worth noting here that Biology International is distributed free of charge to IUBS Ordinary and Scientific Members, and that the individual subscription rate is kept relatively low.

 

3.2. IUBS Expenditures

 

In the period 2000-2003, IUBS expenditures amounted to 1 121 018 Euros, and an average annual positive balance of 17 066 Euros has been realised. This conforms with the general management policy of the IUBS finances adopted since the early Eighties, which advocates very careful and conservative budgeting policy, i.e., not engaging an expenditure before securing the funding source.

IUBS expenditures are comprised of two different categories: (1) Expenditure directly related to the implementation of specific scientific programs and activities, as recorded in the IUBS books and accounts. (2) Fixed expenditure relating to IUBS function and activities, which include the costs of the Secretariat, formal meetings of the Officers and Executive Committee, meetings and travel, publications, representation, annual dues to ICSU, and the financial costs related to the official audit of accounts and bank charges.

 

3.2.1. IUBS Scientific Programs and Publications

IUBS expenditure that is directly related to the implementation of the Union’s scientific programs and activities amounts to 390 363 Euros. It should be noted that this amount represents only the sums itemized in the IUBS bank accounts as attributing to scientific programs and activities. It does not include the related cost in time of personnel and use of facilities of the Union’s Secretariat, nor the financial contributions to these programs by other partners and donors, which are not channeled through the IUBS bank accounts (Figure 2).

 

 

 

3.2.2. IUBS Secretariat

The IUBS Secretariat plays a central role in the Union’s operation, notably in the coordination, information and promotion of the Union' scientific programs and activities, in liaison with the Union’s Ordinary and Scientific Members, as well as with international governmental and non-governmental organisations and foundations. The Secretariat’s annual expenditure represents a fixed component of the IUBS budget. During the period 2000-2003, it  amounted each year to the sum of approximately 103 991 Euros in salaries, 92 019 Euros in social charges, and 38 409 Euros in general office expenses, which consists of the following: ICSU common charges at Hôtel de Noailles (13 984 Euros); communications, i.e., telephone, postage, internet, etc.  (12 017 Euros); office supplies, equipment and miscellaneous (5 750 Euros), and audit and bank charges related to the IUBS accounts (6 658 Euros).

3.2.3. IUBS Contribution to ICSU

In accordance with the ICSU dues system and the IUBS category of affiliation (Category n° 8, which is the highest level among ICSU bio-unions), IUBS paid ICSU 28 395 Euros (or an average of  9 465  Euros/year) over the three -year period.

 

3.2.4. IUBS Loans

IUBS loans are allocated to its members to help in the initial phase of organising international scientific meetings. They are interest-free and  expected to be reimbursed within the  year following the meeting. In the period 2000-2003, one loan of 5000 US$ was allocated to ICSEB VI, held in Patras, Greece, September, 2002), while three loans were reimbursed, totalling 16 047 Euros (Annex-3).

 

3.3. IUBS Fund and Mandatory Reserve

 

The IUBS Mandatory Reserve was set up in order to maintain a provision covering one year’s general and administrative expenses and to meet unexpected financial contingencies (e.g., social charges, income taxes and indemnities payable at end of service of IUBS employees). On December 31, 2002, the IUBS Mandatory Reserve amounted to 720 000 Euros, and the General Fund amounted to 402 850 Euros (See Annex 1). 

 

4. Conclusions and Prospects

 

Based on examination of the IUBS finances during the period 2001-2003, the following trends can be observed: 

4.1. Considering that IUBS is an international, non-governmental, not-for-profit scientific organisation, the notions of direct financial gains and return-on-investment can not be applied to IUBS finances, activities and programs in the same manner as with other corporate bodies and organisations. In financial terms, the cost of the IUBS scientific programs, as shown in this report, represents only a small part of their real value.

4.2. As in the past triennium, IUBS finances enjoy a healthy situation. The current triennium shows well balanced annual budgets, always yielding a positive bottom line.  The “Mandatory Reserve and General Fund,” built up over the years, provides the IUBS with both security and flexibility: (a) it includes a provision to cover one year’s expenditures in case of unexpected delays or difficulties in receiving national dues and to meet the contingencies and legal obligations that the IUBS has vis-à-vis its employees in conformity with French law and ICSU Regulations; (b) it provides the Union with the flexibility needed to take on new initiatives and new challenges.

4.3. Since the last Assembly in Naples, the context of funding international collaboration in science has not improved. On the contrary, due to economic difficulties and political turmoil in many parts of the world, there is less funding available to international science, which is unfortunately becoming the ‘parent pauvre’ of potential donors: foundations and international agencies. It is also worth recalling the comments to my report to the last General Assembly, in Naples, “… donors are increasingly acting as their own implementing agencies for the programs they are willing to fund; the ability to attract funding depends on the degree of development of initiatives proposed by the Union.” In their infancy, IUBS initiatives have difficulty getting external funding, and once they are well developed and promising, they become autonomous.  In this regard, IUBS acts as a nursery  for international biological programs,  to mention but a few recent examples: Tropical Soil Biology and Fertility (TSBF), Species 2000 and DIVERSITAS.

 

As regards the future, also it is worth quoting the Treasurer’s Report to the 27th General Assembly “Were IUBS to keep full responsibility for the operation of its programs, it would have to develop a much larger logistic base and a bureaucracy that would be incompatible with the autonomy, flexibility and reactivity of the Union. In order to preserve these traits, the main responsibility for IUBS funding should always rest with its constituency, i.e., its Ordinary and Scientific Members.”

 

In conclusion, with regard to the next triennium (2004-2007), and considering the current economic and political uncertainties, we propose to the 28th General Assembly :

 

·         To keep, for the period 2004-2007, the level of IUBS Ordinary Members Annual Dues as in 2003.

·         To encourage IUBS Ordinary and Scientific Members to provide financial support to specific scientific initiatives and programs on an ad hoc basis.

 

 

Annex 1 : IUBS Audited Accounts

Balance Sheet at Dec., 31, 2000-2002

 

 

 

YEAR

2000

2001

2002

ASSETS

 

 

 

Cash and Banks

 

 

 

Crédit Lyonnais, Paris

 

 

 

In US $

22 545 

44 748 

5 422 

In Euro

31 752 

-3 170 

-7 882 

In US$ (Deposit Account)

300 352 

300 352 

 

In Euro - Cash (Note 6)

    -

 

1 948 

                                  - Portfolio (Note 6)

274 599 

247 619 

624 486 

Merrill Lynch, N Y - in US $ (note 6)

533 180 

524 850 

503 376 

TOTAL

1 162 428 

1 114 399 

1 127 350 

 

 

 

 

OTHER ASSETS

 

 

 

Other Receivables

 

 

 

LESS LIABILITIES

 

 

 

Sundry creditors (note 8)

-11 560 

-6 796 

-4 500 

Dues received for 2000

-61 323 

 

 

EXCESS OF ASSETS

 

 

 

OVER LIABILITIES

1 089 545 

1 107 603  

1 122 850 

Represented by

 

 

 

General fund