Verhovayak Lapja, 1947 (30. évfolyam, 1-24. szám)
1947 / Verhovay Journal
September 10, 1947 VerhovayJournal PAGE 7 AUDIT REPORT Continued from Page 6 period makes it obvious that the dues paid by your members have been inadequate for the operation of this Fund. Trust Fund The By-Laws provide that all properties not belonging to the Association, such as money belonging to minors, or to unknown beneficiaries, etc. but in possession of the Association shall be handled by the Trust Fund. The Association is required to pay interest at the rate óf 1% per annum on all such funds. All interest or other income in excess of 1% shall revert to the Expense Fund. There are included in your Trust Fund certain amounts which are of a special nature. We list the same as follows: Donation for Aged $ 9.49 Reserve for Bond Fluctuation 4,011.57 U. S. Fidelity & Guarantee Co. For Embezzled Membership Dues 500.00 Verhovay Fund 29,605.24 Detroit Verhovay Home 8.285.51 Branch No. 229 E. Chicago 1,500.00 Branch. No. 229 E. Chicago 4,077.87 Branch No. 170 Medina, Ohio 1,334.47 Verhovay Literary Contest 26.28 Verhovay Radio Club 28.28 Embezzled Membership Dues repayment Branch No. 78 95.19 Branch No. 247 Clune, Pa. 86.89 Branch No. 462, Tonawanda (Branch discontinued) 58.55 As your books are kept on the cash basis, there is hardly any other possibility but to carry the mentioned accounts in your Trust Fund. The Verhovay Fund which is one of the items listed above was constituded by a resolution of your Board of Directors in March 1940 and has been retained since in accordance with this resolution. The reserve for bond fluctuation was credited with profit from sale of bonds. We believe that it would be better to transfer this reserve to your regular fund which would be in accordance with your By-Laws. Juvenile Fund The Juvenile Fund handles affairs- of Junior Members. The Fund amounted to $257,389.74 at the beginning of the four year period and to $624,835.94 at the end of this period. The growth of this Fund is satisfactory. Expense Fund The By-Laws provide for the manner in which the Expense Fund should be operated and as a result of our audit we can state that we have found the operations of this Fund in order. COMMENTS ON RECEIPTS AND DISBURSEMENTS Receipts i We are referring to Exhibit “F” of this report for a Statement of Income and Disbursements for the entire four year period and to Exhibits “G”, “H”, “I”, “J” and “K” of this report for annual statements. Most of the items in these Exhibits are self explanatory. Dues Your Association collected dues in the total amount of $4,962,055.29 during the four year period under review. This compares with $3,748,476.86 during the previous period showing an increase of $1,213,578.43. In the course of our examination we have found that some of your branches are sometimes late in remitting the collected dues to your Home Office. This puts an additional burden on your administration. Income from Investment The total income from investment during the four year period under review amounted to $946,266.61 compared to $702,433.59 during the previous four year period. The increase amounts to $243,833.02. In this connection we are referring to our comments on the funds of your Association in which we discussed the decline in the yield. Recoveries Recoveries on Bonds, written off in prior .periods, amounted to $20,528.63. The audit revealed that your Treasurer took all the necessary steps to protect the interest of your Association. Merger with Workingmen’s Sick Benefit Federation The funds of the Workingmen’s Sick Benefit Federation at the time of merger were as follows: Mortuary Fund $386,851.56 Disability Fund 12,098.35 Trust Fund 5,382.44 Juvenile Fund 18,603.79 / Expense Fund Deficit 2,055.29 Total $420,880.85 DISBURSEMENTS Death Claims Death Claims including double indemnity claims amounted to $1,424,345.14 compared to $967,464.50 in the previous period, an increase of $456,880.64. The mortality ratio for the years under review is stated in our comments on funds. Sickness and Accident Claims Sickness and accident elaims including maiming benefits amounted to $512,801.13 which is slightly less than the amount of $539,400.05 paid in the previous four year period. As we have pointed out previously your Sick and Disability Fund did not contribute to the cost of operations. Dividends The dividends paid to members in the four year period under review amounted to $90,222.80 which is approximately half of the amount paid during the previous four year period. We believe that your Association was wise in exercising restraint in the payment of dividends in view of the conditions commented upon previously. Donations Donations to members and branches amounted to $85,365.76. For a breakdown of this item, we are referring to Schedule 13 attached to this report. Commissions Paid We are referring to Schedule 12 of this report as an analysis of commissions paid during the four year period under review. Commissions paid for the acquisition of new members for the four year period under review amounted to $413,539.22 compared to $349,371.30 during the prior four year period. Commissions are the largest expense item of your organization amounting to approximately 30% of the total expense. The question of acquisition of new members deserves closest attention. We recommend that this matter should be given further study to determine whether it would be possible to reduce the cost connected with the acquisition of new members without damage to your Association. Salaries — Home Office The salaries of your Home Office (excluding your Supreme Officers) during the four year period under review amounted to $184,957.71. This compared to $114,953.55 or an increase of $70,004.16. It is our observation that your Home Office is operated efficiently without waste and the staff employed by your Association could not possibly be reduced. Salaries and Other Compensation of Officers, Trustees and Committees — $84,009.19 We are referring to schedule 18 of this report for an analysis of this expense item. Your Supreme Officers are overburdened with work and spend considerable overtime in the performance of their duties. Their compensation compared to similar positions in other organizations is undoubtedly moderate. Traveling and Other Expense of Officers, Trustees and Committees — $51,871.13 For an analysis of this expense item we are referring to Schedule 19 of this report. Rent Your organization acquired its own Home Office Building during the period under review. Since then your organization has charged itself with rent for the use of part of the Home Office Building, showing this amount, on the one hand as an income and on the other hand as an expense. This procedure is proper, but at the same time, as we have pointed out before, we would like to see your Association reduce the book value of your Home Office Building annually by an amount equivalent at least to depreciation. Investment Expense Investment expense amounted to $15,190.39 during the period under review. This amount was mainly spent for the service in connection with your security holdings and has greatly benefited your Association. Convention Expense Convention expense during the period under review amounted to $43,772.48. As we have pointed out before a change in the By-Laws is necessary to reduce this expense which is becoming a heavy burden on your Association. Home Office Building Taxes and expense amounted to $56,970.28. The income from the Home Office (not including the rent charged to yourself for the use of the building) amounted to $57,988.78. This would indicate that the acquisition of your Home Office Building was justified. YOU ARE JUDGED BY WHAT YOU SAY Do you tell your policyowners “My association won’t do that” or do you say "Your association is unable to do that” ? It’s the same thing, but what a whale of a difference in the sound of it. When we refer to “association” we refer to the policyowner’s company for he is vitally concerned with its success and careful operation. He owns a part of our association through the reserves set up for his policy. Use of the words “won’t” and “can’t” leave a bad taste. There are things we are unable to do and when you tell a policyowner or prospect our association won't do this or that, you lead him to believe we could if we wanted to but just want to be stubborn. “Men’s fortunes are oftener made by their tongues than by their virtues; and more men’s fortunes overthrown thereby than by vices.” Sir Walter Raleigh wrote that a good many years ago. It will always be true but it need not mean that you will be unsuccessful because of an unguarded tongue. Watch your language, please. Develop a tongue that is friendly, thoughtful of others, honest, diplomatic and tactful. Remember, people judge you by what you say — not. by what you thought you said. And remember also — it is not so much what you say but how you say it! —Gulf Stream PLAYING THE GAME All games are played satisfactorily only under recognized rules. Even animals in their frolics rarely overstep the bounds set by instinct, as anyone can testify who has seen two or more dogs engaged in a mock battle. Boys who will not keep within the rules should be made to play by themselves. It is astonishing how quickly the idea is absorbed and what a strong influence it has on the forming character. A boy who plays his youthful games in strict compliance with rules, will grow up to be a reliable, respected and responsible citizen. The boy who tries to win by unfair tactics carries that same trait throughout life, to the great detriment of himself and his business associates.
