Territorial Business Conference – Burger identifies crucial trends, issues
Burger identifies crucial trends, issues
by Robert Docter –
Lt. Colonel Kurt Burger.
Lt. Colonel Kurt Burger, business administration secretary, began the Territorial Business Conference sessions by identifying key external trends and issues throughout the nation as non-profits relate to policy making and funding sources. He then explored internal trends and issues within the Army as it moves into the 21st century.
Non-profits are definitely not in a “business as usual” mode in their relations with either government or with the general public. He stated that he believes there will be “enhanced disclosure requirements, and that misrepresentation will be a federal offense.” He foresaw that the following external trends will continue to impact the organization:
New measures of accountability for non-profits will impose increased reporting requirements. These have developed often as a result of community criticism concerning the responses by some non-profits to sudden significant income. He gave a number of examples of decisions by non-profits that have not met with general favor from either the press or the public. The terrorist attack on New York City’s World Trade Center provided significant donor increases primarily to the American Red Cross. Total donations reached such a magnitude that the public wanted increased information concerning its distribution.
Fund mismanagement concerns also have precipitated stricter accountability. A number of different, highly visible agencies have used funds in ways that the general public found inappropriate. While the Army has experienced no significant criticism in this area, the disclosure requirements will change in some ways the manner in which we operate.
Extension of the Sarbaines-Oxley Act of 2002 to non-profits. This act was an outgrowth of the Enron Corporation’s manipulation of accounting procedures and has placed new requirements on any corporation listed with the Securities and Exchange Commission. On the basis of increased legislative proposals in a number of states, Burger predicted that this act could very easily be extended to non-profits in the near future, and that corporate officers might be required to “sign-off” attesting to the validity of certain documents. Any misrepresentation by those officers could result in both jail and a fine.
Independence issues. Burger predicts some requirements for increased independence of audit committees overseeing non-profits as an outgrowth of the Arthur Anderson problems with the Enron Corporation. These committees, also, will have increased qualification requirements and may report directly to external supervising agencies or commissions.
AWARD RECIPIENTS (L-R) Paul Yukumoto, Adrienne Finley, and Envoy John Waterton are congratulated by Commissioner Linda Bond and Lt. Colonel Kurt Burger.
Burger identified a number of additional issues such as increased costs of insurance, increased competition for the donor dollar along with declining giving by the general public, and, on a positive note, the possibility of increased donations through provisions of the recently enacted charity bill.
Internal issues. In identifying issues within the Army that materially affect the operation of the Business department, Burger noted a number of important developments. These included: consolidation of financial statements, reorganization of the internal audit department, creation of the Silvercrest management department, the movement of the Territory to self-funded health insurance as an effort to confront the rapidly escalating costs of health care, the Safe from Harm program, the number of capital campaigns currently in progress including the Crestmont campaign, and the Economic Task Force.
Burger noted important data affecting our business operations gleaned from divisional reviews in 2002. He recognized the extent of the administrative overload and the complexity of leadership issues facing the divisional staffs along with the increased accountability requirements imposed.
“What we’re finding everywhere is that the ‘cost of doing business’ is increasing in the face of declining income,” Burger said.