Trust Fund Committee Report
2002 - 2003
The value of our investments in both the Charlotte '88 Trust Fund Account and the NCACAA Board Savings Account continued to decline during 2002 due to the continued decline of the stock market. By the end of 2002 the value of our investments had dropped to the lowest level ever, and were far below the amount of our initial investments in 1989. Thankfully, the stock market has rebounded during the first two quarters of 2003 and as a result the value of our investments have rebounded as well.
NCACAA maintains two (2) separate trust accounts, each with specific purposes and goals. The Bylaws and Policies of NCACAA provide that the three (3) immediate past presidents shall make up the Trust Fund Committee which shall be responsible for overseeing these investments, make recommendations as needed to the Board of Directors about the use of these funds, and counsel as necessary with financial advisors about the management of these investments. Everett Davis, 1993 Past President, was appointed by the Board of Directors as ongoing chair responsible for coordinating the activities of this committee and to provide continuity from year to year.
CHARLOTTE '88 TRUST FUNDS
Over $100,000 surplus from the Charlotte '88 National Meeting was invested to provide income stability for support of our association's awards programs, professional development of our members, and financial support for officers and eligible members to participate in official regional and national activities.
These funds are invested in mutual funds primarily for growth and secondarily for security. When appropriate a small balance is maintained in a money market account. During the 2002 fiscal year, the value of these investments decreased by 27.01 percent.
On August 7, 2002 $9,000, was withdrawn from securities and transferred to Lenny Rogers, NCACAA Treasurer, to support 2002 professional development activities as approved by the Board of Directors and to provide funds needed to support the awards program of our state meeting.
NCACAA BOARD TRUST FUNDS
NCACAA, over time, has surplus funds resulting from earnings from state meetings, excesses from election campaigns, sponsorships, et cetera. These funds are invested similar to the Charlotte '88 funds and are also managed by the Trust Fund Committee. However, these funds are available to the Board of Directors to be used at their discretion.
These funds are invested in mutual funds primarily for security and secondarily for growth. As appropriate, a small balance is maintained in a money market account. During the 2002 fiscal year, the value of these investments decreased 21.24 percent.
On July 6, 2002 $5,000 was withdrawn from securities and transferred to Lenny Rogers, NCACAA Treasurer, to provide sufficient funds for the association to carry out the activities approved by the Board of Directors.
TAX REPORTING
All income statements and tax documents resulting from these accounts during 2002 were properly transferred to Gayle Smith, CPA, on March 7, 2003 for accounting and income tax reporting.
RECOMMENDATION FROM TRUST FUND COMMITTEE
The Trust Fund Committee strongly encourages the NCACAA Board of Directors to reconsider its current policies of allocating Charlotte '88 funds as have been done in past years. Committing to the same level of financial support for awards, recognition, and professional development at a time when the value of our investments is declining will continue to deplete significant funds from this account.
This association is considering the possibility of hosting another national meeting as was done in 1988. If successful in securing the bid for this meeting, the goal of this association is to generate surplus funds that can be deposited into this account. However, due to an unsettled economy and the uncertainty of the level of financial support from our agricultural friends there is a risk that this effort may not generate the profits anticipated. In fact, this account may serve as a reserve if expenses for this meeting exceed the income generated.
We encourage the NCACAA Board of Directors to either restructure the amount of funding for our awards and recognition program, or to develop specific strategies and goals to either fund or partially fund anticipated expenses. There are some hard decisions to be made by the NCACAA Board of Directors, and the general membership is encouraged to support these actions. It may be necessary to return to pre-1989 operations and to look for other creative methods of funding the current needs of our association. Even if the stock market does rebound significantly, efforts should be made to replace some of the large amounts that have been withdrawn from the Charlotte '88 Trust Account and the NCACAA Board Trust Account or we will never return to the comfort level we enjoyed several years ago.
FINANCIAL INFORMATION AVAILABLE TO MEMBERS
Due to the sensitivity of financial information, detailed financial reports and information will not be posted to the NCACAA Annual Report web pages. Any member requesting it will be provided detailed financial and investment information by the Trust Fund Chairman.
Submitted by Everett Davis on 6/12/03
Everett Davis, Trust Fund Chairman
Johnny Hensley, Past President, 2002
James Cochran, Past President, 2001
Rett Davis, Pasty President, 2000