Finance Report: May 2020

Courtesy Property Inspections
May 1, 2020
Marine Patrol
May 1, 2020

Finance Report: May 2020

Published May 1, 2020

During the first quarter of 2020, management and the Finance Committee not only monitored the financials, but engaged an outside CPA firm to perform the annual audit and reviewed the key risk document.

PDPOA received an unqualified opinion on the 2019 financial statements. This means the financial statements were fairly and appropriately presented and in compliance with accounting standards. An audit helps to identify weaknesses in the accounting system, helps reduce the risk of fraud or poor accounting, and assures the members that PDPOA is running in accordance with the financial information they are receiving.

Also, management and the Finance Committee reviewed the Key Risk document that the committee created in 2019. This document identifies various items that create risk to PDPOA. Management and the Finance Committee will review this document annually and make sure the organization has mitigating factors to offset the risk.

By the end of the first quarter, the Finance Committee transitioned to monitoring the effects of Covid-19 on PDPOA’s financials. Management and the Finance Committee are aware that Covid-19 will have a financial impact on the organization. We are proactively monitoring our revenue and expenses during this unprecedented time.

In March, the Finance Committee selected two members of the committee to meet with PDPOA’s investment advisor on a weekly basis. PDPOA’s investment portfolio is split between fixed income and equities. The percentage breakdown is 75% to 25%. Due to Covid-19, our portfolio has declined over the past few months. Our portfolio is extremely conservative, and the equities are invested in Dividend Aristocrats. Dividend Aristocrats are companies that have paid an increasing dividend for twenty-five consecutive years. Over the past two months, PDPOA’s investment portfolio has outperformed industry benchmarks.

PDPOA is very fortunate that several years ago the Finance Committee set up the General Fund. This fund is used to account for excess operating funds to support future operating shortfalls or future board approved projects. As of the ending of March, PDPOA had approximately $2,700,000 in this fund. PDPOA can use this money to help support operations due to the anticipated shortfall in revenue.

Management reviewed Sea Lane and future capital projects to determine if timing adjustments have to be made to conserve cash. Since these projects are funded by the R&R Fund, these projects are expected to continue as planned.

Management and the Finance Committee will continue to monitor the Covid-19 pandemic and take steps to preserve the organization’s assets.

—Gayle Cleaveland, Treasurer

Comments are closed.