Tuesday, February 17, 2009

Meaningless numbers

It never ceases to amuse me when people talking about Susan Polgar's lawsuit treat the $25,000,000 ad damnum figure as if it has some basis in reality.  It bears even less relation to reality than any RGCP post by Sam Sloan or Phil Innes.

This number was created by Polgar's lawyer using a time honored legal technique known as "pulling it out of your ass."  Such a number has no conceivable rational basis.  People should stop dignifying it with repetition.

She wants $25,000,000.  That's fine.  I want world peace, the Pittsburgh Pirates to win the World Series, and a night on the town with Jessica Alba.  As a practical matter, nothing like this is ever going to happen in the real world.

Sunday, February 15, 2009

USCF Finances - A Summary

Yesterday I vetted my summary of the financial issues facing the USCF. The below is based upon what that, modified by pertinent critiques.

Appreciate the kind thoughts expressed in another thread about my summarizing the accounting issues facing the USCF.
I like the legal summary that Wick Deer put on his blog: http://wduscf.blogspot.com/
It would be nice if someone (like Jack LeMoine, for example) with an accounting background would post a summary of the financial issues facing the USCF.


Just off the top of my head are:

1) The accounting reports have improved since I saw them a couple of years ago.

2) The main problem accountingwise that the USCF faces is the inability to know how ahead or behind we are during the course of the year. However far behind we are mid-year, management always responds with first, "The second half of the year is always better" and "The auditors always make year-end accruals that could vary the bottom lines by many thousands of dollars".

3) The members badly need to know how much the average rate of increase the second half revenues are over the first half. This gives you an historical, verifiable, and measurable benchmark to project the annual result.

4) I wouldn't depend too much on comparing first half results with prior years. It is like comparing middle-game positions in a game of chess. You may have fewer pieces but still be ahead. There are other factors than just how many and what pieces you have. The same is true for comparing dollars to dollars mid-year. It is the end of the year that counts. Management is correct to point to annual results instead of interim results.

5) The problem of membership accruals at year-end needs to be addressed. I note that Mike Nolan has come out in favor of a database for this.

6) Various audit issues have been discussed at very great length on this forum. Amid all the drek, there's been some legitimate points raised. I have pointed out (see some of my earliest posts) that we have independent auditors and these issues ought to be taken up with them. I favor the Executive Board meeting with the auditors on an annual basis to discuss matters that have come up and to ask questions. Such questions could relate to findings that did not rise to the level of financial statement disclosure but that people would still be interested in knowing. (e.g. the infamous Susan Polgar laptop computer incident. Did the auditors look into this or did they not? If they did, what did they find? Another audit mystery is the documentation of the Crossville land and building valuation. Did the auditors examine them or did they not? How did they verify the valuations used?) Bill Goichberg opposed this; Randy Bauer hasn't taken a position.

7) Sevan Murdian brought up the subject of operational/internal audits about a year and a half ago. He offered his services for free and I had said I would help. Mike Nolan was right to say that these would only work if people did the work in Crossville. At this point, I'm unclear how this would help but perhaps it is worth looking into.

8) The unpaid post-employment money owed remains a critical issue. I am unsure why the USCF hasn't been sued over this. The money owed ought to be paid ASAP.

9) The invite to me to summarize the accounting issues was kindly appreciated and this was a quick and dirty response. The proper person who ought to summarize these issues is Randy Bauer, the USCF's Vice-President of Finance. Recently, we exchanged views on this forum on the matter. RB was quite adament that he no longer feels responsibility for discussing USCF Finances because of the lawsuits and because he is just a volunteer. (From his statements, I infer that he won't address USCF finances in any other manner, either, but I could be mistaken. He could still be functioning in some way. - Or not.) I believe he ought to reverse his position on this issue.

Note: After publication of the above on the USCF’s Forums, the VP-Finance broke his silence on USCF finances. His major points were:
USCF finances, through the first 8 months of the fiscal year, are remarkably on track with the budgeted amounts on the revenue side. In fact, the differences are so not material in almost every major category to be, well, remarkable.

That said, one expenditure area has a large variance from budget: professional services - i.e., legal fees. This is about $129,000 over budget.

The overall picture through 8 months has us about $246,000 ahead of budget, of which almost $400,000 is bequests. The difference between the two numbers is almost entirely additional legal fees.

Wow, that sounds like some serious mis-management. Got a blog post ready to go on that, Jack?
- Post 127870

And this:
I don't see any "accounting issues" to "clean up" - I think our current accounting processes are just fine and are now a lot more straightforward with reports developed straight out of the Peachtree accounting system.
- Post 127927

Management’s annual demurs about unknown year-end membership accruals usually comes around April and May. These accruals throw the final bottom line off by many thousands of dollars. The USCF looks to the auditors to calculate. This means that the USCF doesn’t know how it is doing until after the year is over.

Until then, the accounting is just fine. This has been management’s story for several years now.

Saturday, February 14, 2009

Respect is Everything

Respect is the cornerstone of a good environment. You create a respectful community by requiring that everyone treat everyone else with the respect that they deserve. You do this by having written policies and by actively enforcing those policies. Don’t let people get away with disrespectful comments. All members of your community (regular members and staff members) must treat one another with respect at all times.

You should encourage your members to attack the point and not the person. Address what people say, don’t try to attack them as human beings for having a given view. This extends to respect of choice.

[Managing Online Forums by Patrick O’Keefe pages 219-220]

Friday, February 13, 2009

Last Call for Feb. Chess Blog Carnival

The February Edition of the Chess Blog Carnival is just days away. Deadline for bloggers to submit their best article is February 15. Chessvine will edit and host this edition.

This is a tremendous opportunity for the chess fans to sample the best of the chess blogs that are active today. The internet contains many talented writers and analysts who are both famous and unknown. One of the exciting things about this project is that you may discover the earliest writings of one of the great players and/or pundits of the future. January saw a tremendous response. Even Susan Polgar was in on the action. Carnival articles include these categories:
  • Annotated Games
  • Book Reviews
  • Chess Culture and Politics
  • Chess Events
  • Endgame Play
  • Humor
  • Improvement
  • Opening Theory
  • Position Analysis
  • Strategic Concepts
Click on the logo for previous editions of the Chess Blog Carnival.

Should those who represent the USCF be held to a higher standard?

Should those who represent the USCF be held to a higher standard and subject to a higher degree of criticism merely because of their position, as opposed to their alleged wrongdoing? Putting it another way, if both a USCF representative and a USCF member were accused of the same infraction, should both be subject to an identical amount of coverage, commentary and scrutiny? USCF officials have expressed that USCF members should be held to the same or higher standards as our USCF representatives and leaders. Many others feel those in a position of leadership or authority should be held to a higher standard of conduct than the USCF membership.

Further we often hear from those who have authority over us “I am not a paid employee of the USCF - I am a volunteer.” Some people feel that giving volunteers that serve us a break for not doing a good job should be the standard. We are told we ought to recognize their volunteer status and be more lenient. Our volunteers often argue this largess should apply to them. When a poor job is done we usually hear a litany of rationalizations as well as all the effort, hard work, time and money the individual provides for chess as if this mitigates poor behavior or results. We are always reminded since they receive no money for their service they should not be held to higher standards or even a simple professional standard of care.

Those in authority might argue at best they should be treated no differently than anyone else. However, in the view of many, it is thought those in a position of authority over us should have a duty to set an example. Like it or not, they can be viewed as role models and, as such, these people have a special responsibility to the membership. People who we delegate authority to are accountable to a special degree, ex officio - merely because of their position. What is usually forgotten is these individuals have been given positions of authority and with extra authority comes extra responsibility. Even though we very much appreciate the work of our volunteers, a bottom line argument is if people don't want responsibility or to be accountable for their actions they should not volunteer to serve a tax exempt organization.

Wednesday, February 11, 2009

With Korenman

I'm on the left; Mikhail Korenman is on the right.

Mikhail is a candidate for the USCF Executive Board this year. I hope he wins. He's been on the Scholastic Committee and he has some great ideas.

This is another picture from last year's National High School Championships that I just discovered.

See also http://www.jacklemoine.com

Monday, February 9, 2009

Bill Hall and Mike Mulford

That's Bill on the left and Mike on the right.

Another picture from the National High School Championship last year. Bill Hall is the Executive Director of the US Chess Federation. Mike Mulford was a friend of mine back in the 1970's. We played a match in his college dorm room in Seattle. He hired me for my first accounting job in 1983.

Mulford goes by the handle "Mulfish" in his internet chess postings. This picture was taken just after an impromptu meeting with us and Hal Bogner. Bill and Hal led Mike and me through the whole FSS/Mottershead Report scandal, how it first came to their attention and what they did. They were very nice and informative. They answered my questions as best as they were able to do, given the legal constraints that they were under.

Jack Le Moine

Sunday, February 8, 2009

Hal Bogner and Me

That's Hal on the left and myself on the right.

In the next few days I shall post some pictures from last year's National High School Championship. I was new to the digital camera game and I had thought that I had lost my pictures. I did find a few. Also, because I was a newbie, the date and time stamp are not reliable. I think it was on the 16th not the 14th that the picture was taken.

Hal Bogner has been active in chess for all his adult life. He was in on the ground floor of the Chessmaster computer playing program, ChessBase, the database program, General Manager of the Internet Chess Club, and currently a partner in The Chess Magnet School. We spent a great deal of time together. While we're in opposite camps as far as USCF politics goes, I don't see why he's such a bad guy.

I recommend his Chess Magnet School. Tell him Jack sent you!

Jack Le Moine

Tuesday, February 3, 2009

Why have formal processes for board member removal?

What are the proper or usual steps to remove a board member?

1. Discuss situation with member and/or submit a report to the board
2. Ask member to resign or schedule a leave of absence
3. Accept complaint/report activating a committee process
4. Petition a recall or conduct board removal vote
5. Seek impeachment or court removal
6. Ultimately term limits (including the length of time on the board and how many total terms) should remove the member

Why should a board member be removed? An ineffective board member causes stress, slows progress and weakens the morale of the rest of the board. Reasons for removal should be based on the person's current actions with regard to the organization, not on whether they are not a nice person, on something objectionable done in the past, or on their non public behavior. Constantly missing meetings, introducing conflicts of interest, other breaches of fiduciary duty or board policy, illegal or inappropriate behavior while serving on/running for the board, and preventing others from functioning are all reasons why a board member should be removed. Actions that are contrary to the wishes of the membership are harder to justify unless the actions have injured the reputation or negatively affected the finances or viability (like loss of membership/sponsorship) of the organization. All of the above should be items considered by our organization’s Bylaws/Ethics Committees and ultimately by our Board of Directors when putting proper steps in place.

What happened? In October 2007 when I was discussing with Bill Hall the steps to take in regard to the allegations presented in the Mottershead report it became clear there were no formal procedures in place to be able to resolve such concerns. With no formal procedures, we understand the President of the USCF Executive Board and also possibly the USCF Executive Director felt it might be best to come up with a report and suggested it be sent it to the USCF Ethics Committee. As a result a report was created and submitted to the USCF Executive Board for their review. In the mean time the information was distributed throughout the organization which within a few weeks found itself in the hands of the media and general public. The USCF Executive Board (EB) appointed a Board Subcommittee to consider issues related to charges made by Brian Mottershead. Once the report’s conclusions were verified a complaint was also submitted to the USCF Ethics Committee for their review. A request for resignation and a petition for recall were attempted. Eventually an action was submitted for court removal of the board member.

So what? It has been argued that if the initial findings had been presented to Bill Hall, and he determined a more thorough investigation take place, a person with more background and loyalty to the USCF should have picked it up and carried the finding to the ethics committee, or a special committee set up by the EB to investigate it. One can argue this actually is what happened - just not in a way everyone desired. We can endlessly debate the lack of formal process, the slowness of the activities, the uncoordinated and overlapping steps, media reporting impacts, as well all the related infighting and finger pointing. One can only point out that as far as we know the duplicative steps of impeachment or a forced leave of absence were not invoked and all of those involved in pursuing proper steps appear to have suffered some form of retaliation. Perhaps better term limits could have helped. It seemed like more membership energy was expended trying to verify/discredit the report or discover how the public got the information rather than to properly adjudicate who did what the report had claimed. When our leadership sets an example by fighting we should expect no less from our members. If we are to learn from what has happened, all of these points can be areas for future improvement as well as provide motivation for a more formal process for board member removal.