2. Rationale for formalising financial accounting of UEMS Sections

3. Current financial support for Sections by UEMS
Meets the costs of meetings in parallel to UEMS Council
Venue
Meals
Processes accounts to be compatible with Belgian law
This is becoming more difficult, time consuming and expensive
Over 20,000 transactions per year
As Section activity grows these numbers will increase
Legal requirements increase as UEMS turn-over increases
Pays VAT on submitted accounts
Which cannot be reclaimed

4. Current Accounting Status
UEMS is a single not-for-profit organisation
Sections and Boards are internal groups within UEMS
UEMS united annual accounts must include all the transactions of the S&Bs
These transactions are currently processed by UEMS office workers
Using s and submitted documents
Very labour intensive and difficult to reconcile incoming and out-goings
Reviewed by accountants and then assessed by auditors
Impossible for each section to have accounts / audit individually
If they did accounts would cost 5000€ per section for external
Plus an accounting cost of between 5000€ and 20000€ per section
External auditors say only solution is a single accounting platform

5. Current and Projected Accounting Costs
Current internal accounting costs for UEMS (total 2017) 75,000€
Based on time of processing transactions Sections = 66%
By providing this service UEMS ‘subsidises’ Sections by approx 62,000€
VAT is not currently paid by Sections but is paid by UEMS 28,500€
There is a trajectory of increasing activity by Sections and Boards
This will increase the hours taken to produce and validate the accounts
Without a significant change, these costs will be unsustainable
Without better accounts there is a risk of fine or jail

6. Proposal for UEMS
UEMS will continue to pay for external auditors 5000€ per annum
Introduce a “Cloud Administration Platform” for all of UEMS bodies
Attribute actual cost of Sections to Sections
Staff cost
VAT costs
Decision for Groupings/Sections
How to distribute these costs proportionately to the Sections

7. What is certain We cannot continue as we have been
Risk of penalty
Funds used inefficiently
Recommendation from external auditors - an electronic platform
Electronic platform will be introduced
Platform we are adopting is simple, proven and reliable (Salesforce)
The platform will be introduced this year and cost must be met
Current ‘hidden’ costs will be revealed and allocated to S&B
The costs of ‘accounting’ work for Sections and Boards
UEMS office work preparing for auditors

8. Advantages of Single Accounting Platform
Reduces time taken for treasurers of Sections and Boards
Promotes S&B activity by stream-lining transactions and accounting
Reduces the costs of processing accounts
Currently hidden within overall costs of UEMS Office
Will make accounts less open to legal challenge
Maintains not-for-profit status
Avoids risk of 103% penalty tax from Belgian IRS
Keep our President and Secretary General out of jail
Increase the interest paid on funds by bank

9. Disadvantages of Single Platform
New system
Treasurers will have to learn to use
There will be hiccups during its introduction
May highlight practices incompatible with not-for-profit status
Reveals costs to the sections and boards (until were hidden)

10. What needs to be decided
The ‘repartition’ schedule for distributing 94,000€
Some sections have turn-overs of <5,000€ others >100,000€
A repartition key should be fair
No formula should damage a single Section
Cost of accounting is generated by activity i.e. funds and transactions
Any formula will have ‘winners’ and ‘losers’
Options proposed are variations based on funds and transactions
By % of total Section transactions i.e. 94k€/%transactions undertaken
By % of total Section funds held i.e. 94k€/%funds held
Combinations of these options

12. Final comments about repartition
It would be good to make a decision today about repartition
It has to be made by the end of the year so that dues can be collected
Lowest impact initially would be based on resources (as the funds are there)
Exact ‘repartition’ format is an issue for Sections
UEMS Council will invoice on the basis of any preferred, clear, method
Any decision now can be changed in the future
we can review this decision each year
If the annual costs reduce, this will be reflected in the total
However, costs rarely reduce