As Tourism Canmore Kananaskis tries to redefine itself into the future and mature as an organization, it is also dealing with financial baggage from the past.
The destination marketing organization held its annual general meeting last Friday (Sept. 30) and presented draft audited financials for 2010 and re-audited financials for 2009 that reveal it has a $141,000 deficit.
President and CEO Andrew Nickerson said the shortfall is the result of poor financial management and not impropriety.
Board chair Dan DeSantis said the new audit was requested to better understand the organization’s finances.
“We felt the financial processes weren’t as tight as they could have been,” he said.
It became apparent after the new audit the deficit was accrued through a lack of financial practices. It found TCK was not adhering to generally accepted accounting principles.
What was happening, explain officials, is TCK was collecting revenue that was intended for future year’s budgets and spending it.
DeSantis said it was operating on a cash basis instead of accrual, so funds for future projects were not saved.
“It is not missing, it was accounted incorrectly and spent in the wrong year,” he said.
TCK treasurer Len Youden said that means the deficit is not owing to a financial institution, but to the organization itself.
Nickerson added in the meantime, TCK has trimmed its budget this year without changing what it planned to spend on marketing and is projecting a surplus next year.
The result is that the organization expects to eliminate the deficit by the end of 2012.
In addition to the financial statements, TCK members amended bylaws and elected a new board.
Nickerson said there are changes in the bylaws that will ensure the deficit position cannot be repeated.
The new policies include that the auditor and bookkeeper will report to the treasurer on the board, not the CEO. TCK has hired a new bookkeeper and a new audit firm.
As well, the president/CEO position will be accountable to the board for budget variances on a monthly basis.
“We have done a lot of good this year building strength and the organization,” Nickerson said.
DeSantis said the last year for TCK has been one of change with a new structure, governance, accountability and strategic direction.
There are dedicated staff positions focused on marketing and a new focus on member services.
While TCK runs with a budget that is a tenth of what Banff or Jasper have, DeSantis said it is working to grow and find a sustainable funding formula.
As well, he pointed to the fact the organization and Canmore Economic Tourism Authority are working on a permanent merger that would see the two strategically aligned and more efficient.
New bylaws were presented by board member Brenda Stanton and almost all changes were approved.
Stanton said a number of the changes are meant to clarify the role of the board as one of governance.
“The board does not get into operations – that’s not its role,” she said.
The size of the board was increased from a minimum of six and maximum of 10 elected members to a minimum of nine and maximum of 12, with no one to serve more than five consecutive years.
Attendance requirements of board members were also made tighter, with suspension or expulsion if absent for more than two consecutive meetings. Stanton said directors are expected to attend a minimum of 80 per cent of meetings as well.
“We are looking for people who are engaged, part of the board and there every month,” she said, adding business moves fast and the board is expected to react. “We have to be present and agile.”
However, the membership disagreed with changes to the remuneration section of the bylaw to see elected board members receive one per cent of the total budgeted revenue of the agency once it reaches $2.5 million.
The new board is: Hugh Hancock, Dan DeSantis, Steven Kyck, Branda Stanton, Cameron Spence, Jo-Anne Kobelt, Pam Hilstad, Sarah Law, Kelly Sheard and Pam Middleton.
