Comments on State of Florida Potential Reorganization

From: Earl Porter, Past State Representative to Kairos Board

      At our State Committee meeting in January 2010 I made a plea for the State Committee to take a prayerful and considered look at the pros and cons of Florida reorganizing into a Model 1 State. Since that meeting there have been some thoughtful responses to this issue and they range from full support to wholly against the potential reorganization.

            Just as a review, here are the various models allowed by the Kairos Financial Policies and Procedures (FPP). The FPP does not allow for hybrid models, that is a mixture of more that one Model in any State Chapter.

      Model 1 – The State Committee maintains the only Checking Account in the State. The State Financial Secretary (FS) approves all disbursements and the State Treasurer (TR) writes all checks and receives all deposits or deposit slips. Listed below are the Model 1 States with the number of Advisory Councils (AC) of all types (KIMen, KIWomen, KO, KT) in the State:

Alabama       12      Maryland      04

Alaska        02       Mississippi      07

Arizona        04      N. Hampshire  03

Arkansas      07      N. Mexico      05

Colorado      11      N Carolina      16           

Connecticut  05      Ohio     16

Georgia       27      Oklahoma      09

Idaho           01      Pennsylvania    07

Illinois           04      S. Carolina      12

Indiana         17      Virginia 13

Kansas         06      Washington      09

Maine           03      West Virginia       04

As you can see from the list they are pretty small States in terms of ACs with Georgia being the largest with 27.

      Model 2 – The State Committee maintains a Checking Account and each AC also maintains a Checking Account. Model 2 States with number of ACs of all types in the State:

California    21      New York      12

Louisiana      07      Tennessee      12

Missouri       03      Texas  48

      Model 3 – The State Committee maintains a Checking Account and each of the geographical Area Committees maintain a checking account. Florida is the ONLY State that is Model 3. Florida has a total of 43 ACs divided into 10 Areas.

Area 1          03      Area 6  05

Area 2          05      Area 7  06

Area 3          06      Area 10 05

Area 4          05      Area 11 03

Area 5          04      Area 12 01

Area 8 was KO and was folded into the other Areas. Area 9 was Spanish and went to Area 7.

      At the Winter Conference I had the opportunity to talk to several people about the organizational models and the trial audit that was conducted. I talked with the folks from Texas, and with George Brown from California about the Audit as well as the State Model. Here is what I discovered. I want to discuss this subject in two aspects, financial and management

Financial Issues: Texas is very happy with their organization as a Model 2 from a financial standpoint. The current Chairman of Texas feels that the financial model works very well for these reasons: ACs have “direct control” over the money they raise; ACs feel responsibility to raise money to conduct the ministry in their prisons; the State FS gets the data needed efficiently because all the AC FS use DONOR and they can transmit the information electronically to the State FS. California is also very happy with their Model 2 arrangement financially, basically for the same reasons as Texas. They also cannot see how they could “persuade” their ACs to change from the Model 2 to Model 1, the only time they discussed it was “not very pretty.” Georgia-I did not get an opportunity to discuss this issue with anyone from Georgia which is too bad because they are the largest Model 1 State. I have emailed the Chair, Financial Secretary, and Treasurer with a request for information and asked a series of questions about issues that were raised in our initial discussions and emails. I will share any information I receive as soon as I get it.

Management Issues: I talked with the current Chair of Texas at the Winter Conference. Texas is concerned about management control over 47 ACs spread out over an area as large as Texas. In fact, Texas has just started a discussion about establishing “Area” committees over given geographical sections and giving those Area committees management over site over the ACs in those Areas. Much like Florida is organized, however Texas did stress that they did NOT want to change the financial structure. I think this is going to be a problem for them because the Financial Policies and Procedures of KPMI do NOT allow for hybrid models and what Texas is discussing is a mixture of Models 2 and 3, which I would think would be considered hybrid. Of course KPMI could always decide to change the FPP to accommodate this type of model.

      I did not get any opportunity to talk to California folks about management issues. My sense is that they have been so concentrated on getting ready for the Financial Audit that assessment of managing the ACs hasn’t had much attention. From a State Committee perspective I think it is kind of “if it ain’t broke don’t fix it” and “the squeaky wheel gets the grease.”  I have not heard of any bad issues with CA. I would think it would take a pretty proactive State Committee to oversee 21 ACs spread out over an area the size of CA.

Audit results of CA and GA: The trial audits in CA and GA went very well. Each of the States received some “significant deficiency” comments but in neither case were the comments cause for declaring the State with a “material weakness” which would have said in effect a State did not pass. So they both received a “qualified opinion” good but not as good as an “unqualified opinion.” That is really good news. The outgoing KPMI Treasurer was very pleased with the audit results, in fact all three of the GA comments reflected that the Auditor did not recall that the three items noted were all covered by the FPP already. So GA was audited with no comments. The outgoing KPMI treasurer said, this was a good training exercise for us and for the Audit Firm. The Audit Firm got a real opportunity to gain an understanding of the KPMI Organization and operating procedures which will make the audit process much easier. And we learned how the firm will conduct the audit which, if we prepare ourselves will make it go faster and therefore cost us less money.

As an aside; I think it would be very good to share the specific findings of the CA and GA audit with all levels of our FL Kairos community so we can better understand what the auditors will be looking for with the goal of self correcting any areas before the auditors get to us.

MY PERSONAL COMMENTS:

      Everything that I have seen and understood so far gives me no solid reason for making a change to FL organizational structure at this time.

      To change to Model 1 just to decrease the cost of an overall audit does not make sense when KPMI has six States as Model 2 with a total of 103 ACs with Bank Accounts. FL as a Model 3 only has a total of 11 bank accounts, which is less than 4 of the Model 2 States. FL is less expensive than 4 other States based on Bank Account criteria alone.

      To change to Model 1 or Model 2 for management purposes makes no sense because there is no objective information that indicates the other Models are any better at management based on the Model alone. Some may be better because they are more proactive or for other reasons but, again that does not reflect on the Model chosen.

      Based on the two test audits there is no objective information that it will cost more for FL because we are a Model 3. In fact, based on the number of Checking Accounts criteria, it should have been more expensive to audit CA since they have 21 Checking Accounts spread out all over CA.

      There have been no objectives tests or studies by any organization within KPMI to determine what the best Model would be for the operation of the KPMI ministry. There is much personal opinion and strong feeling but as far as I can tell no objective measurements for effectiveness.

MY PERSONAL RECOMMENDATION:

      I do NOT believe that FL should make any changes to its organizational or financial structure at this time.

      I DO believe that we should complete the audit this year and carefully analyze all the results and the cost BEFORE we make any decision.

      I do NOT believe that we should allow any comments or attitudes from any source; staff, BOD, or IC to pressure us into a reorganization we think is wrong for FL, as long as our Model of organization is authorized by the current documents governing KPMI.

      I DO believe that we should remain open to additional input, to any objective facts or information that has bearing on our situation and always be ready to modify our organization if it is in the best interests of the Ministry and our State.

In one way I feel bad for starting this process and then discovering that my information at the outset was incorrect and then recommending that we do not take any action at this time. However, in another way I am very encouraged in the way that our State Committee people took on this issue. Yes, there was strong reaction both pro and con, but even in the initial discussion the tone was caring and respectful of each other and differing opinions. This is a very emotional issue and I recognize that we are a long way from the end of the debate but all the evidence so far tells me that we are going to debate this issue as friends that care for each other and for this wonderful ministry that God has called us all to be a part of.

Respectfully,

Earl Porter