Why AAJA Texas is helping replenish a restricted fund

May 01, 2010

An important message from AAJA Texas National Representative Tom Huang:

Folks,

I wanted to let you know that AAJA’s governing board has voted to assess each chapter a certain portion of money to go toward replenishing a restricted fund. This has been a difficult process and decision, but all of the chapter boards have agreed to support the national office on this.

The Texas chapter has agreed to contribute $10,000 to this effort. Each chapter’s assessment was based on a percentage calculated by taking the chapter’s assets and dividing that dollar amount by AAJA’s total assets.

Here is some background. Earlier this year, Kathy Chow, AAJA’s new executive director, conducted an audit of the national office’s finances back to 2006. She found that the national office had borrowed from a restricted fund a few years ago to bridge a financial gap and keep AAJA’s programs going. AAJA owes the restricted fund $115,000 over the next four years. That’s in addition to the 2009 deficit of $207,000. Borrowing from the restricted fund was not illegal, but it was not a good financial practice, as that money was earmarked for scholarships and other restricted programs.

The assessment of the chapters will go toward the restricted fund, which will allow the national office to focus on reducing the $207,000 deficit. Sharon Chan and Kathy Chow met with the donor of the restricted fund and explained what had happened. The donor understands and still wants to support AAJA’s future. They have asked to remain anonymous.

Several advisory board members and I have worked over the last few months to push for greater transparency from national and for specific steps to avoid repeating what happened. Here’s what we’ve come up with:

* The national advisory board will review our accounting practices and procedures in order to evaluate and make improvements to our system of checks and balances. We want to ensure excellent accounting practices are put into place.
* The advisory board has already committed to a Power of One fundraising campaign to help make AAJA financially sustainable.
* The board has already formed a development committee charged with raising money for the organization.
* The finance committee is forming an investment team, which will include a financial adviser and a CPA to provide oversight.
* The board has recruited an independent task force to review the organization’s accounting principles, practices, procedures; it will report and make recommendations to the board.
* The organization is currently undergoing an independent audit.

Aside from the restricted fund issue, greater forces have led to the 2009 deficit. Given what I’ve seen NAHJ, NABJ, ASNE and AASFE experience, it’s hard for me to see how AAJA could have avoided its budget deficit. All of these organizations face declining membership, conference attendance and donations. AAJA could have canceled the last convention, but that would have resulted in a large financial penalty, as well.

Despite this frustrating, daunting situation, I remain committed to AAJA, and I hope you will be, too. As I told the national board, AAJA helped me during the good times, and I can’t abandon them in tough times. If you have questions, e-mail me at thuang@dallasnews.com. Your talent and resourcefulness will help the Texas chapter survive and thrive.

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