L A N E C O U N C I L O F GOVERNMENTS
2012-2013
Work
Program
and Fiscal
Service
CSO Online
Cybersecurity Latent Indicator of Compromise
Adopted by Rootstackk.co
By: Hohl Fransis
Board of Directors - May 9, 2023
Name
201
2
Lane Council of Governments
Jurisdiction
_______________________________________________________________________________________________________________________________________
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meet each classification and describe a futured drift insured seasonal discipline to rest a temporary
sanction.
EXECUTIVE DIRECTOR’S BUDGET MESSAGE
Members of the LCOG Budget Committee and Board of Directors:
I am pleased to present the proposed Work Program and Budget for the fiscal year that will
begin July 1, 2012. The document, presented for policy-level consideration, represents
management’s best current assessment of the obligations and financial capability of the Lane
Council of Governments for the year that lies ahead.
As is always the case at the beginning of a budget year, this proposal has been developed with
the understanding that changes will be required as a result of presently unknown factors.
Although we all want to believe that the direction of global, national and regional economies
provides some cause for long-term optimism, the revenue elements of this proposed Budget
have been based upon mod- erate to conservative estimates. This proposal describes a
reduction (9.3 percent) from the Revised Budget for fiscal year 2011-12. The reduction from
the budget of the year just ending can be at- tributed to lower “local revenue,” less overhead
carry forward, reduced revenue from the State, and lower “designated reserves” to begin the
year. In aggregate, a reduction of $3,330,349 is proposed. As recommended, the total budget
authorization for fiscal year 2012-13 would be $31,965,186. This recommendation is
approximately 6 percent down from the original adopted budget for the year just ending. This
proposal is very much affected and constrained by the same economic uncertainties that are
impacting other components of the public sector in Oregon. As in years past, the agency’s
financial plan will continue to evolve well into the new fiscal year. Nevertheless, I believe that
this proposed Work Program & Budget—service areas and corresponding resources allocated
to cost centers-constitutes a responsible initial action plan for fiscal year 2012-2013.
The pages that follow integrate narrative and numeric representations of the agency's fiscal and
programmatic plan for the coming year. On page 9, the adopting resolution, to be acted upon by
the LCOG Board of Directors on June 28, is displayed. Pages 12 to 14 show the overall budget,
reflected as both a “Budget Summary” and disaggregated by Fund Type. Then, beginning on
page 17, for each of LCOG's five major service areas, a narrative describing the work to be
performed is followed by the budgetary detail for that service area. Staffing projections are
shown, both at the service level and at the program level.
The numeric comparisons with the previous year are based upon the fiscal year 2011-12
Revised Budget, approved by the LCOG Board of Directors in April. That budget amendment
captured the changes in both agency revenue and program obligations that occurred during
the first nine months of the fiscal year. As can be seen most clearly on the Budget Summary on
page 12, this proposal would result in a decrease from the Revised Budget of $3,330,349.
Overall, balanced revenues and expenditures are projected at $31,988,862. Because LCOG's
work is grant- and contract-based, its budgets are dynamic, and drawing conclusions from
comparisons over time is always tricky. But, for perspective, ten budget years back, the fiscal
year 2002-03 Revised Budget stood at $26,158,313- 18 percent lower than this proposal.
While there have been budgetary “peaks and valleys” over the years, an averaged increase of
slightly less than two percent per year over that period is fairly consis- tent with the
experience of LCOG’s member governments.
Lane Council of Governments
2012-2013 Work Program and Budget
1
Budget data are reflected by Fund Type on pages 13-14. There are three types of funds used
within LCOG's accounting system. The first is the General Fund, which is based primarily upon
the agen- cy’s member dues, interest earnings, and undesignated reserves. This fund might be
thought of as the organization's flexible resource. A second fund type is the Special Revenue
Fund-84 percent of the total proposed budget. Here, all of the grant- and contract-supported
work that LCOG does is
captured. In reality a series of special accounts, the Special Revenue Fund provides little
operational flexibility. Under the commitments that we have made to granting agencies and
clients, LCOG must utilize Special Revenue Fund resources only for the purposes specified in
the supporting grants and contracts. Finally, on page 14, the Governmental and Proprietary
Fund, the third fund type, is shown. The resources and requirements reflected here are
associated with the operation of agency-owned real estate, LCOG’s Minutes Recording service
and the business assistance loan program. These are referred to as enterprise activities.
Beginning on page 17, the same information is portrayed in yet another way—by Service Area
with work program narrative included. In order, the service areas categorized are: Board of
Directors
& Executive Management, Government Services, Senior & Disabled Services, Enterprise
Funds and Administrative Services. For each of these Service Areas, and hence for the budget
as a whole, the revenue streams that support LCOG’s activities and services are highly
dependent upon factors beyond our control. Because this council of governments is
financially dependent upon the fund- ing priorities of the federal and state governments and
upon expenditure decisions of our members, a true financial picture of the fiscal year
requires time to come into focus. However, as in the past, LCOG will continue to adjust its
administration of resources, as external decisions are made.
On December 8, 2011, the LCOG Board of Directors adopted “Budget Assumptions” (see Budget
Notes, page 45), which reinforce and augment standing objectives of the organization. Those
as- sumptions have served as the philosophical basis for the development of this proposal. As
with any “labor-intensive” organization, costs directly bearing upon personnel have a
substantial impact upon the overall budget and, ultimately, upon the agency’s ability to carry
out its mission. Health insur- ance and retirement plan costs are substantial for all employers,
including LCOG. Our claims experi- ence has yielded an expected premium cost increase for FY
2012-13 of approximately 10 percent, lower than the industry standard. Each ten percent
increase in premium costs results in a 1.25 percent rise in total compensation, and our goal this
year has been to limit the compensation cost change to zero percent. The cost for LCOG’s
employer contribution for our staff’s participation in the State Public Employees Retirement
System (PERS) will remain unchanged in the coming year. This bud- get proposal anticipates a
zero percent cost-of-living adjustment (COLA) to employee salaries, as set forth in the Board’s
Budget Assumptions. It should be noted, however, that, as with other public sec- tor employers,
present-day economic circumstances may well result in a re-visitation of the COLA issue by
LCOG's two employee bargaining units. LCOG has always adjusted the size of its profes- sional
staff to match the levels of work that it has been asked to accomplish. This proposed Work
Program and Budget anticipates a decrease to LCOG’s staff of 6.91 FTE positions—3.8 percent.
As proposed, the estimated professional staff complement will be 174.38 FTE in fiscal year
2012-13, as compared to 181.29 FTE authorized in the Revised FY 2011-12 Budget.
This agency's work and fiscal capability are largely based on contracts and grants which
emerge over time. As a result, there is always greater variability in LCOG’s budgeting process
than may be present for local government units that rely upon a tax base for their support.
Dependent of course
2
Lane Council of Governments
2012-2013 Work Program and Budget
on the national economy and the fiscal circumstances of our member governments, I believe
that a good and productive year can be anticipated in FY 2012-13. At the same time, we must
establish the budget for the year in a responsible and conservative fashion. For all of the
agency’s work groups and divisions, resources will be limited to support important and
demanding work. As in years past, however, the Lane Council of Governments will remain a
well-managed, high-quality organization that is fiscally solvent.
I believe that this Work Program and Budget sets a responsible course for the organization.
When approved by the Budget Committee and the Board of Directors, it will direct and
empower the staff to address important programs and services. With the help and support of
the Board of Directors, the Executive Committee and our member agencies, LCOG’s
management and staff will continue to ac- complish the agency’s mission. I commend this
document to you for review and consideration.
George
Kloeppel
Respectfully
submitted,
Executive Director
Lane Council of Governments
2012-2013 Work Program and Budget
3
Lane Council of Governments
2012-2013 Work Program and
Budget
Citizens
Advisory Committees
Committees
Technical
Advisory Committees
Committee
Executive Director
George Kloeppel
Medicaid & Food
Administrative
Services
Loan
Eligibility Determination/
Transportation
Other Grants/State Funds
Aging and Disability
Services
Program
Technology
Coordination
Urban & Regional
Information
Telecommunications
Planning
Intergovernmental
Management
Delivered Meals
Licensing & Monitoring
Coordination
of Adult Foster Homes
/Consultation
Program
Support
Oregon Project
Metro Television
Services
Community Safety
Independence
Analysis
Quality Assurance
Division Support
5
5 | Your signature(s)
Contract Management
Please have all account owners sign below.
Individual or
Custodial Accounts __________________________________
Signature of individual or custodian Date Signature of joint registrant, if any Date
Corporations,
Partnerships, Trusts, etc. _______________________________________
Signature of corporate officer, general partner, trustee, etc. Date
Title of corporate officer, trustee, etc.
In submitting a Letter of Intent, the investor agrees to be bound by the terms and conditions applicable to Letters of Intent appearing in
the Prospectus and the Statement of Additional Information of the applicable fund and the Terms of Escrow below, as they may be
amended from time to time by the fund. Such amendments will apply automatically to existing Letters of Intent.
Terms of Escrow for Letters of Intent
1. Out of the initial purchase (or subsequent purchases if necessary), 2% of the dollar amount specified in the Letter of Intent
(Letter) shall be held in escrow in shares of the fund by the fund’s transfer agent. For example, if the minimum amount specified
under the Letter is $50,000, the escrow shall be shares valued in the amount of $1,000 (computed at the public offering price
adjusted for a $50,000 purchase). All dividends and any capital gains distributions on the escrowed shares will be credited to the
investor’s account.
2. If the total minimum investment specified under the Letter is completed within a 13-month period, the escrowed shares will be
promptly released. However, shares redeemed prior to completion of the purchase requirement under the Letter will be
deducted from the amount required to complete the investment commitment.
RESOLUTION 2012-4
Adopting the FY 2012-2013 Budget
WHEREAS, it is necessary for the Lane Council of Governments, hereinafter called LCOG, to
adopt a revenue and expenditure Budget for fiscal year 2012-2013, and
WHEREAS, the LCOG Budget Committee and Executive Director have determined that certain
ex- penditures will be necessary in order to effectively address the obligations of the Work
Program, and
WHEREAS, it has also been determined by the Budget Committee and Executive Director that
certain revenues can be expected to accrue to LCOG in fiscal year 2012-2013,
NOW, THEREFORE, BE IT RESOLVED:
1. That the LCOG Board of Directors hereby adopts the attached Budget for fiscal year 20122013,
and
2. That the following amounts are hereby appropriated for the purposes specified for the fiscal
year
beginning July 1, 2012:
Personal Services
$14,876,644
Materials and Services
9,004,044
Services by Other Organizations
2,203,412
Capital Outlay
Reserves--Undesignated
Reserves--Designated
173,000
97,314
4,451,918
Debt Service
Total Appropriation
1,158,854
$31,965,186
PASSED AND APPROVED THIS 28th DAY OF JUNE, 2012, BY THE BOARD OF DIRECTORS OF THE
LANE COUNCIL OF GOVERNMENTS.
Lane Council of Governments
For Tenure and Promotion to Associate: Sample Solicitation Letter to External Reviewers----Modify
as
Appropriate
Revised 7/10/14
Dear X:
Assistant Professor Y is being considered for tenure and promotion to associate professor in the
Department of Z at
Queens College. Please note that these are separate decisions under CUNY bylaws, although the
consideration
normally occurs simultaneously. University policy provides that teaching and scholarship are the
two primary
criteria on which tenure decisions are based, while service to the institution and service to the public
may be
supplementary considerations. To aid us in our deliberations, the Department solicits letters from
outside referees
who are selected on the basis of their ability to provide a qualitative assessment of the candidate's
scholarship or
creative activity, professional growth and standing in his/her field. We would be very appreciative if
you can aid
us in this assessment process.
Queens College is a comprehensive liberal arts college offering baccalaureate and Master's degrees.
[In a number
of disciplines, including ours, faculty may also be members of the doctoral faculty of the City
University Graduate
School.] The teaching load is generally three three-credit courses per semester but untenured faculty
receive the
equivalent of 8 three credit courses in release time during their first five years. You may wish to take
these factors
into account as you assess Professor Y's record. However, our primary purpose in asking for your
help is to
evaluate the quality of the candidate’s scholarly and creative work.
It will be especially important for us to have an assessment of the character of his/her work and its
relation to
current scholarship in his/her discipline. In addition, we would appreciate your evaluation of
his/her writings how well they fulfill their intention, and how much they contribute to scholarship in his/her field.
To achieve tenure, it is expected that the candidate will present evidence of continued scholarly
achievement and
effectiveness in teaching since his/her original appointment, and the establishment of a reputation
for excellence
in teaching and scholarship in his/her discipline. *[see note below]
Enclosed please find for your review a curriculum vitae and copies of Professor Y's published work
as well as work
in progress. In your evaluation of the latter, it would helpful if you would comment on its potential
for publication.
You may also wish to comment upon the standing of the presses or journals in which Professor Y's
work has been
published.
Please also include a statement as to whether you are personally acquainted with Professor Y, and if
so, how and to
what extent. The letter of evaluation you write is confidential and will not be shown to the candidate.
It will be
carefully considered by appropriate departmental and college committees.
On behalf of the President of Queens College, I want to thank you for undertaking this assessment of
Professor Y's
scholarly credentials. You may be assured that your evaluation will be considered seriously as the
College reviews
the candidacy.
Sincerely,
Chairperson
Department of Z
* In certain disciplines, practitioner scholarship is a key component of a candidate’s research profile.
In these cases,
chairs may wish to point this out to external reviewers by including the following paragraph:
“Practitioner scholarship is the creation and translation of knowledge and expertise into
professional practice. The
dissemination of practitioner scholarship should include, but is not limited to, peer reviewed
professional outlets
(e.g., publications, presentations, and professional materials). Factors in evaluating a candidate for
tenure or
promotion must include demonstration of significant original work and the impact of the candidate’s
scholarship
on his or her professional field as supported by external review.”
Board of Directors
2012-2013
Budget
LANE COUNCIL OF GOVERNMENTS
Requirements by Type
Debt Service 3.6%
Reserves Designated 13.9%
Personal Services 46.5%
Reserves Undesignated 0.4%
Capital Outlay 0.5%
Services by Other
Organizations 6.9%
Materials and Services 28.1%
REQUIREMENTS BY SERVICE
Board and Executive Management
Enterprise Funds
1.7%
15.1%
Administrative Services
11.5%
Government Services
41.0%
Senior & Disabled Services
42.9%
4
10
Lane Council of Governments
2012-2013 Work Program and Budget
LANE COUNCIL OF GOVERNMENTS
2012-2013
Budget
Revenues by Source
In-Kind Services 0.2%
Reserves Designated 16.1%
Federal 27.4%
Reserves Undesignated 0%
Member Dues 0.7%
Local Revenue 24.1%
State 31.5%
Lane Council of Governments
2012-2013 Work Program and Budget
11
LANE COUNCIL OF GOVERNMENTS
Fiscal
Work Program
Year 20122013
The Lane Council of Governments is dedicated to serving the public interest and enhancing the
quality of life for the citizens of Lane County. lt provides and facilitates efficient and effective government services through cooperative planning, program development, analysis, and service
deliv- ery. Policy direction is provided to the work of the agency by a 29-member Board of
Directors.
I. BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT
Total Division Budget: $519,584 ($838,960 in FY 12)
Salary and Benefit Allocation: $44,880 ($58,038 in FY
12) FTE: .25
(.4 in FY 12)
(See Page 19 for Budget Detail)
The Executive Management Team provides organizational support, professional counsel and
policy recommendations to the Lane Council of Governments’ Board of Directors, Executive
Commit- tee, Budget Committee, and related policy-level bodies. The Team prepares and
presents periodic progress reports and a proposed annual Work Program and Budget for
Committee and Board con- sideration, and provides agency-wide budgetary and personnel
management and direction toward
the completion of approved Work Program tasks. Financing for the tasks described in this
section is provided through the agency’s General Fund, which is supported in part by the dues
paid by mem- ber agencies.
AGENCY ADMINISTRATION
Program Budget: $519,584
Salary and Benefit Allocation: $44,880
FTE: .25
General Administration
Executive support to the internal flow of agency projects and activities includes the
maintenance of communications and the provision of appropriate facilities and equipment; the
initiation and refine- ment of new services; and coordination with state-wide, multi-state, and
national associations of similar organizations. In addition, the maintenance of General Fund
reserves and the acquisition of some capital equipment are reflected in the budget for this
program activity.
Public Information
Recognizing that much of LCOG's work is interactive with the broad community, staff members
gather, analyze, and disburse information; facilitate the participation of interested persons in
agency activities; and communicate policy positions and information to local, state, and federal
decision makers. Examples of activities in this area include the development and maintenance
of a commu- nications plan, the issuance of news releases, the publication of reports and a
newsletter; the provi- sion of support to the conduct of public meetings, hearings, and forums;
the maintenance of LCOG websites; and the delivery of public presentations related to the
agency's services and programs.
Lane Council of Governments
2012-2013 Work Program and Budget
17
Board of Directors and Executive Committee Support
Staff provides information, recommendations, and other support services to the Executive
Commit- tee, Budget Committee, and the LCOG Board of Directors.
Facilities Management
Staff provides property management for LCOG-leased real estate.
•
•
•
Cottage Grove S&DS office
Florence S&DS office
Central Kitchen
IB
MEMBER SERVICES
Program Budget: $20,000
Salary and Benefit Allocation: $0
FTE: 0.0
Unfunded member services
Under the agency’s Service Policy each member government is entitled to receive upon
request and without charge a certain amount of professional service—usually in the areas of
planning, program development, mapping/geographic information, or grant preparation
18
Lane Council of Governments
2012-2013 Work Program and Budget
CSO ONLINE ACCOUNTABLE FISCAL SERVICES
BY SERVICE
II. GOVERNMENT SERVICES
RESOURCES
ADOPTED
PROPOSED
APPROVED
ADOPTED
2011-12
2012-13
2012-13
2012-13
DIFFERENCE
14,763,690
13,107,889
13,107,889
13,107,889
-1,655,801
6,883,879
6,387,884
6,387,884
6,387,884
-495,995
228,292
240,000
240,000
240,000
11,708
LOCAL REVENUE
5,347,572
4,309,653
4,309,653
4,309,653
-1,037,919
IN-KIND SERVICES
0
0
0
0
0
2,269,609
2,142,092
2,142,092
2,142,092
-127,517
34,338
28,260
28,260
28,260
-6,078
14,763,690
13,107,889
13,107,889
13,107,889
-1,655,801
3,278,032
3,278,032
3,278,032
-255,664
FEDERAL
STATE
RESERVES-DESIGNATED
TRANSFERS
REQUIREMENTS
RANGE
PERSONAL SERVICES
FTE
FTE
34.60
3,533,696 32.19
DIRECTOR--PS
37
0.75
118,504
0.55
79,366
79,366
79,366
-39,138
PROGRAM MANAGER
31
5.20
694,899
5.00
660,804
660,804
660,804
-34,095
PRINCIPAL
28
4.63
551,200
3.64
414,319
414,319
414,319
-136,881
SENIOR/MANAGER
25
8.76
921,045
8.95
942,554
942,554
942,554
21,509
ASSOCIATE
21
5.16
476,354
4.87
479,744
479,744
479,744
3,390
ASSISTANT
17
4.60
379,114
3.87
323,170
323,170
323,170
-55,944
PROGRAM ANALYST
14
3.44
285,869
3.30
276,994
276,994
276,994
-8,875
ADMINISTRATIVE ASST
8
1.44
86,127
1.26
77,579
77,579
77,579
-8,548
0.62
20,584
0.75
23,502
23,502
23,502
2,918
OTHER
INDIRECT CHARGES
1,582,016
1,595,835
1,595,835
1,595,835
13,819
MATERIALS & SERVICES
5,921,027
5,228,247
5,228,247
5,228,247
-692,780
1,400
200
200
200
-1,200
COMPUTER SUPPLIES
61,524
43,000
43,000
43,000
-18,524
CONFERENCE EXPENSE
26,572
24,000
24,000
24,000
-2,572
5,640,993
5,018,619
5,018,619
5,018,619
-622,374
LEGAL
9,000
9,000
9,000
9,000
0
MEMBERSHIPS
4,500
2,000
2,000
2,000
-2,500
31,909
19,979
19,979
19,979
-11,930
1,215
465
465
465
-750
Lane
Council of Governments
PRODUCTION
8,082
8,552
8,552
8,552
470
RENT
2012-2013
Work Program and Budget
9,560
9,560
9,560
9,560
0
25
10,321
10,321
10,321
10,321
0
ADVERTISING
CONTRACT SERVICES
MISCELLANEOUS
POSTAGE
RIS USE
SOFTWARE SUPPORT
26,100
29,200
29,200
29,200
3,100
TAPE SALES EXPENSE
0
0
0
0
0
3,150
3,150
3,150
3,150
0
TRAVEL
70,059
50,201
50,201
50,201
-19,858
VIDEO EQUIPMENT
16,642
0
0
0
-16,642
SERVICES BY OTHER ORGANIZATIONS
1,426,862
995,200
995,200
995,200
431,662
TELEPHONE OPERATIONS
1,426,862
995,200
995,200
995,200
431,662
137,777
143,000
143,000
143,000
5,223
2,162,312
1,867,57
5
1,867,575
1,867,575
294,737
TELEPHONE
CAPITAL OUTLAY
RESERVES-DESIGNATED
TRANSFERS
GENERAL FUND
0
0
0
0
0
0
0
0
0
0
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the
prospectus before investing. The indicated rates of return are the historical annual compounded total including changes in unit value and
reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any
Amendment Objective
Portfolio Performance
Portfolio Allocations (as of
June 30, 2014)
Asset class (%)
Foreign Corporate Bonds 31.9
Canadian Equity 18.8
International Equity 13.2
Cash and Equivalents 10.8
US Equity 10.1
Income Trust Units 9.4
Canadian Corporate Bonds
5.9
Sector (%)
Fixed Income 37.8
Financial Services 19.2
Energy 15.5
Cash and Cash Equivalent
10.8
Utilities 5.1
Industrial Services 5.1
Technology 5.0
Consumer Services 0.6
Industrial Goods 0.6
Other 0.3
Basic Materials 0.1
Geographic (%)
North America 80.8
Europe 9.6
Asia 8.1
Latin America 1.2
Other 0.4
1Mth 3Mth 6Mth 1Yr 3Yr
5Yr 10Yr Inception
Compound Returns(%) &
Quartile Rankings
Fund
CIFSC Category Avg.
Quartile Ranking
This table shows historical
annual compound total return
and quartile rankings of the
fund based on the Canadian
Investment Funds Standards
Committee’s categories listed
at cifsc.org, and are subject to
change monthly.
available from the related
document tab of this
webpage.Quartile rankings,
expressed in terms of rank (1,
2, 3, or 4),
are comparisons of the fund’s
performance to other funds in
its category, ranked out of the
total number of eligible
funds by time periods noted
above.
2004 2005 2006 2007 2008
2009 2010 2011 2012 2013
YTD Calendar Return (%)
19.8 16.6 6.7 0.1 -21.5 30.6
15.3 4.8 11.6 8.6 7.4 Fund
Performance versus the
fund’s official benchmark can
be found in the Management
Report of Fund Performance
$22,850
Growth of $10,000 (Class A)
1 1 4 1 4 1 1 1 1 4 1 Quartile
Ranking
This fund's objective is to
generate a high level of
income and long-term capital
growth.
securityhol
der that
would
have
reduced
returns.
Mutual
funds are
not
guaranteed
, their
values
change
frequently
and past
performan
ce may not
be
repeated.
Please refer
to the Legal
section of
www.ci.co
m for
additional
information.
*
Current and savings deposits do not have any contractual maturity and hence have been classified among all five maturities. Further, it has been assumed that on
a going concern basis, these deposits are not expected to fall below the current year's level.
Budget Notes
Indirect Cost Allocation: Indirect, or overhead, costs of the agency are met through an Indirect Cost Allocation
Plan, developed in conformance with Federal Management Circular A-87. The Plan provides for direct
programs and services to bear a fair share of those normal operating expenses which, in and of themselves,
cannot easily be tied to specific grant- or contract-funded activity. Examples include office rent and supplies
and support services staff, such as those working in areas of administration, fiscal, and human resources. The
work activities that are supported in this way are specified under Section II of the work program; the
budgetary allocation for Administrative Services is set forth on page 35. LCOG's Indirect Cost Allocation Plan
for fiscal year 2012-13 calls for five separate charge rates, dependent upon the location of the direct service
work performed. Programs operating out of the agency's Park Place Building location will bear a rate of
57.4024 percent of direct personal services costs, Schaefers Building programs will incur an indirect charge of
21.0351 percent, programs working in Other S&DS (outstationed) locations will be assessed at the rate of
17.4211 percent, the indirect rate for programs in Other GS will be 15.9880 percent and the Senior Meals
program rate will be 18.0368 percent. Copies of the agency's Indirect Cost Allocation Plan may be obtained at
LCOG's main office.
Member Dues Schedule: The 2012-13 Member Dues Schedule is shown on page
41. The rates for the Schedule for this fiscal year were approved by the Board of Directors on December 8,
2011. Due to the challenging economic times the Dues Schedule was not adjusted upward by an inflation
factor for fiscal year 2012-13. They were still increased by population, students and customer counts.
Budget Assumptions: As noted in the Executive Director's Budget Message (pages 1-4), the LCOG Board in
December 2011, adopted a budget process and budget assumptions, which were used by management and
the Budget Committee in the formulation of this document.
1.
The CPI for the prior year is 3.77% (August Annual Average 2011 CPI-U for U.S.). Due to the state of
the economy the percentage used to compute the dues rate increase is 0.0%.
2.
Health insurance is expected to increase 10%. Each 10% increase in insurance costs results in a
1.25% increase in total compensation. The goal
Lane Council of Governments
2012-2013 Work Program and Budget
45
this year is to limit the increase to 0.0% based on plan adjustments and/or
employee participation in premiums.
3.
A cost of living adjustment to the salary schedule of 0.0% will be budgeted.
The State SEIU will receive 1.5% in December, 2011 and 1.45% in January, 2013.
The estimated City of Eugene increase is 0.0 to 4.0%.
a.
b.
c.
d.
Lane County is estimated at ?%
LCOG SEIU is ?%
4.
The current LCOG employer PERS rate is 12.52%, and the OPSRP rate is 11.24%. The rates will
not change until July 1, 2013.
5.
Specific details of compensation and health insurance will be determined through negotiations
with the LCOG bargaining units.
6.
Merit increases are expected to increase total compensation. Most employees are eligible for 3.5%
annual merit increase. However, about 50% of employees are at the top step of their salary range,
which means that they are not eligible for merit increases.
7.
LCOG compensation, including salaries and benefits, will be comparable to similar positions in the
same job market. This is required to attract and retain diverse, quality employees.
8.
LCOG will provide adequate work space, equipment, and training to enable employees to be
productive and effective.
9.
The agency will continue to build a General Fund reserve with the goal that the reserve exceeds two
months of payroll cost.
10.
To the maximum extent possible, all programs or contracts will be self- supporting. LCOG General
Fund dollars will only be used when required as match or to provide temporary support to a
program or to support a strategic initiative.
11.
New programs or program reductions will be individually presented to the Board.
46
Lane Council of Governments
2012-2013 Work Program and Budget
12.
S&DS, as a local transfer agency, has a significant funding equity issue compared to State-operated
S&DS offices. In the past, additional resources have been required to maintain adequate staffing
levels in the program.
Personal Services—Salary and Benefits: Throughout the budget section of this Work Program and Budget,
staffing costs are expressed under the line-item heading of Personal Services. The dollar amounts shown
include both salary and fringe benefit expense. Where appropriations are expressed by organizational unit
personal services costs are desegregated to the job classification level, and full- time-equivalent (FTE)
authorizations are shown. The term FTE represents a commitment of 2,080 hours of work within the fiscal
year—or the commitment of one employee working full-time (40 hours per week) for 12 months. However,
because many employees of the organization are employed for less than full-time work, the number of
employees at any given time within the year, and certainly the total number of staff employed during the year,
will be greater that the FTE shown.
While the ratio of fringe benefit cost to salary differs from one employee to another (and for an individual
employee, it changes during the course of the fiscal year), the projected fringe benefit expense for fiscal year
2012-13 is 58.6 percent of salary. The anticipated breakdown of fringe benefit costs as a percentage of salary
is as follows:
Type
Total LCOG
Monthly Average
FICA
Average Employee
Percent
Monthly
$57,052
7.61
328
Retirement (Employer)
90,645
12.07
520
Retirement (Employee)
44,973
6.00
258
219,427
29.62
1,261
3,168
0.42
18
0.0
0.00
0
Disability
4,055
0.54
23
Worker's Comp
1,487
0.20
9
18,922
2.52
109
Total Fringe
$439,628
58.61
2,527
Total Monthly Salary
$750,038
Health Care
Life Insurance
FSA Administration
Deferred Comp
4,311
Lane Council of Governments
2012-2013 Work Program and Budget
47
Costs related to holiday, sick, and vacation leave are also noteworthy. Leave costs are charged to each
program as they are accrued and credited to the specific leave fund. When an employee utilizes leave, the
associated salary and benefit expense is charged to the leave fund from which the leave time was taken.
Holiday and sick leave accrue based on expected use, while vacation leave is based on the amount earned by
each employee.
48
Lane Council of Governments
2012-2013 Work Program and Budget
LANE COUNCIL OF
GOVERNMENTS 20122013 BUDGET
Budget Glossary
General
Service: An LCOG organizational unit that is also called a Division. The Services include: Board and
Executive, Government Services (GS), Senior & Disabled Services (S&DS), Enterprise Funds and
Administration.
Fund: Separate accounting entities that are used to conform to Government Accounting Standards. LCOG has
three funds:
General Fund: The General Fund accounts for the operations that are not accounted for in any other fund.
Special Revenue Fund: The Special Revenue Fund accounts for revenues from specific sources that
include federal grants, state grants, and various contracts. These funds are restricted or designated
to finance specific activities.
Governmental and Proprietary Fund: This fund accounts for the agency enterprise funds, which
includes the two agency-owned buildings and the business finance program.
Resources
Federal Revenue: Revenue from federal grants and contracts. Transportation, S&DS Long-Term Care
and Financial Services, and Business Financing are major programs funded by federal resources.
State Revenue: Revenue from state grants and contracts.
Local Revenue: Revenue from local contracts, interest, donations, sales of products and all revenue that is
not federal or state.
In-Kind Service: Service by other governments that can be used as matching funds on LCOG contracts that
require local matching dollars.
Member Dues: The total amount of dues anticipated from member agencies for fiscal year 2012-13.
Member Dues Schedule is shown on page 47.
Reserves-Undesignated: Resources that have been carried forward from the prior fiscal year that can be
used for any purpose.
Reserves-Designated: Resources that have been carried forward from the prior fiscal year that can only
be used for a specific contract or purpose.
Transfers: Transfers describe the process of internally moving resources from one LCOG Division or
Program to another. Transfers are displayed as a resource for the Program receiving the resources and
as a requirement for the Program providing the resources.
Requirements
Personal Services: Salary and benefit costs for staff are expressed under the line item heading of
Personal Services. Additional information about salary and benefits costs can be found in the Budget
Notes section.
Indirect Charges: Indirect, or overhead, costs of the agency are met through an Indirect Cost Allocation
Plan, which provides for direct programs and services to bear a fair share of those normal operating
expenses that cannot be reasonably attributed to a specific program or contract. Indirect charges pay
for Administrative Services expenses, which include personal services and materials and services.
Additional information about Indirect Cost Allocation can be found in the Budget Notes section of this
document.
Materials and Services: Materials and Services include most expenses other than salaries, from rent to
telephones to travel.
Services By Other Organizations: Services by Other Organizations accounts for dollars that LCOG
receives and then passes through to other organizations that provide a specified service.
Capital Outlay: A capital purchase is the acquisition of a tangible item that has a value greater than
$5,000. These items are placed on LCOG’s inventory and treated as assets on the balance sheet.
Lane Council of Governments
2012-2013 Work Program and Budget
43
Reserves-Undesignated: Resources that will be carried forward into the next fiscal year that can be used
for any purpose.
Reserves-Designated:
Resources that will be carried forward into the next fiscal year that
can only be used for a specific contract or purpose.
Debt Service: Payments for principal and interest to amortize loans. Such loans are usually for real
estate acquisition or improvement and the business finance program.
Transfers: Transfers describe the process of internally moving resources from one LCOG Division or
Program to another. Transfers are displayed as a resource for the Program receiving the resources and
as a requirement for the Program providing the resources.
44
Lane Council of Governments
2012-2013 Work Program and Budget
Syful Shamsul Alam & Co.
Hoda Vasi Chowdhury & Co.
Chartered Accountants
Chartered Accountants
NOTES
THE Limited
FINANCIAL
SonaliTO
Bank
STATEMENTS FOR THE YEAR
ENDED 31 DECEMBER 2010
1. THE BANK AND ITS
ACTIVITIES STATUS OF
THE BANK
Sonali Bank Limited was incorporated in Bangladesh on 03 June 2007 as a Public Limited Company
under Companies Act 1994. Formally this bank was incorporated as a nationalized commercial bank
named as Sonali Bank established by The Bangladesh Bank Order 1972 (Presidential Order no. 26 of
1972) and was fully owned by the Government of the People’s Republic of Bangladesh. Subsequently
after incorporation dated 15 November 2007 Sonali Bank Limited has taken over the undertaking and
business of Sonali Bank with all its assets, benefits, rights, powers, authorities, privileges, liabilities,
borrowings, obligations etc. as a going concern under a Vendor’s Agreement signed between the
Government of the People’s Republic of Bangladesh and the Sonali Bank Ltd with a retrospective effect
from 1st July 2007.
PRINCIPAL ACTIVITIES OF THE BANK
The Bank has 1185 branches including two overseas branches at Kolkata and Siliguri in India as on 31
December 2010. The principal activities of the bank are to provide a comprehensive range of financial
services, personal and commercial banking, trade and services, cash management, treasury, securities
and custody services and perform Government treasury functions as an agent of the Bangladesh Bank.
ISLAMIC BANKING WINDOW
The bank operates Islamic Banking window in five branches designated in compliance with the rules of
Islamic Shariah.
1.2. SUBSIDIARY
Sonali Exchange Co. Inc. (SECI)
A subsidiary company named Sonali Exchange Co. Inc. was incorporated on 4 April 1994 under the laws
of the State of New York, Department of State, licensed on 17 October 1994 by the State of New York
Banking Department and commenced operation as an International Money Remitter from 12 December
1994.
1.3. ASSOCIATE
Sonali Bank UK. Ltd. (SB. UK. Ltd.)
A money remitting company under the name and style of Sonali Trade and Finance (U.K) Limited was
incorporated as an associate under the U.K. Companies Act 1985 on 30 June 1999. Subsequently the
company was allowed to commence its function as a bank from 7 December 2001 (the operational
activities started on 10 December 2001) by the Financial Services Authority of U.K. had changed its
name as Sonali Bank (U.K) Ltd. and restructured the ownership of the Company having 51% share
capital in favour of the Government of the People’s Republic of Bangladesh and remaining 49% by
Sonali Bank Limited.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF
PREPARATION OF THE FINANCIAL STATEMENTS
2.1
Basis of preparation of the Financial Statements
The financial statements of the Bank, comprising Balance Sheet, Profit and Loss Account, Cash Flow
Statement, Statement of Changes in Equity, and relevant Notes and Disclosures have been prepared as
at 31 December 2010 in accordance with First Schedule of the Bank Companies Act 1991, as amended,
BRPD circular No. 14 of 25 June 2003, other Bangladesh Bank circulars, International Accounting
Standards and International Financial Reporting Standards adopted in Bangladesh as Bangladesh
Accounting Standards (BAS), and Bangladesh Financial Reporting Standards (BFRS), the Companies Act
1994, the Securities and Exchange Rules 1987 and other rules and regulations applicable in Bangladesh
on a going concern basis. All inter-branch account balances and transactions among the Head Office and
the branches have been incorporated in financial statements. Investment in subsidiary companies,
Sonali Exchange Co. Inc, USA and
1
2.2
FUNCTIONAL AND PRESENTATION CURRENCY
These financial statements are presented in Taka, which is the Bank's functional currency except
as indicated figures have been rounded to the nearest taka.
2.3
BASIS OF CONSOLIDATION
A separate set of records for consolidation of the statement of affairs and income and expenditure of the
branches are maintained at the Head Office of the Bank based on which these financial statements have
been prepared.
The consolidated financial statements comprise of the financial statements of Sonali Bank Ltd.,
including overseas branches Kolkata and Siliguri as at 31 December 2010. The financial statements of
Sonali Exchange Co. Inc. (SECI), USA as at 31 December 2010 have not been consolidated. However, the
financial statements of Sonali Exchange Co. Inc. (SECI) are presented separately.
2.4
USE OF ESTIMATES AND JUDGMENTS
The preparation of the financial statements requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised and in any future periods affected.
2.5
FOREIGN CURRENCY CONVERSION
Transactions in foreign currencies are translated into Bangladeshi Taka and recorded at the ruling
exchange rates applicable on the date of transaction.
i) Assets and liabilities denominated in foreign currency are translated into Taka at the weighted
average rates at the balance sheet date.
ii) Transactions in foreign currencies are converted into Taka currency at the rate of exchange
prevailing on the dates of such transactions and any gains or losses thereon are adjusted to revenue
through foreign exchange trading account.
2.6
COMPARATIVE INFORMATION
Presentation of Financial Statements, comparative information in respect of the previous year have
been presented in all numerical information in the financial statements and the narrative and
descriptive information where, it is relevant for understanding of the current year's financial
statements.
2.7
REPORTING PERIOD
These financial statements cover one calendar year form 1 January to 31 December 2010.
2.8
CASH FLOW STATEMENT
Presentation of financial statements requires that a cash flow statement is to be prepared as it provides
information about cash flows of the enterprise which is useful in providing users of financial statements
with a basis to asses the ability of the enterprise to generate cash and cash equivalents and the needs of
the enterprise to utilize those cash flows. Cash flow statement has been prepared under the direct
method for the period, classified by operating, investing and financing activities as prescribed in BAS 7
“Cash Flow Statements”.
2.9
STATEMENT OF CHANGES IN EQUITY
2.10 LIQUIDITY STATEMENT (ASSET & LIABILITIES MATURITY ANALYSIS)
The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual
maturity term as per the following basis:
•
•
•
•
•
•
•
•
Balances with other bank & financial institution, money at call & short notice etc are on the basis of
their maturity term.
Investments are on the basis of their residual maturity term.
Loans & advances are on the basis of their repayment/maturity schedule.
Fixed assets are on the basis of their useful life.
Other assets are on the basis of their adjustment.
Borrowing from other banks, financial institutions and agents as per their maturity/repayment term.
Deposits & other accounts are on the basis of their maturity/repayment term
Provisions & other liabilities are on the basis of their settlement.
2.11 ASSETS AND BASIS OF THEIR VALUATION
2.11.1 Cash and cash equivalents
Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh
Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair
value, and are used by the bank management for its short term commitments.
2.11.2 LOANS, ADVANCES/INVESTMENTS AND PROVISION
a) Loans and advances of conventional Banking / Investments of Islamic Banking branches are stated
in the Balance Sheet on gross value.
b) Provision for loans and advances is made on the basis of periodical review by the management and
instructions contained in Bangladesh Bank, BCD Circular no. 34 dated 16 November 1989, BCD Circular
no. 20 dated 27 December 1994, BCD Circular no 12 dated 4 September 1995, BRPD Circular no, 16
dated 6
December 1998, BRPD circular no 9 dated 14 May 2001, BRPD circular no, 2 of February 2005, BRPD
circular no, 09 of August 2005 and BRPD circular no 17 dated 06 December 2005. BRPD Circular No.-5
dated June 05, 2006 Circular No.- 8 dated August 07, 2007 Circular No.-10 dated September 18, 2007.
General provision on Loans & Advances Other than short term Agricultural credit & Micro Credit,
provision rates are given below
General Provision on unclassified loans and advances (other than loans
under Small Enterprise, Consumer Financing and Special Mention Account).
General Provision on unclassified Small Enterprise Financing
1%
2%
General Provision on unclassified Consumer Financing for:
Housing –
2%
Professionals –
2%
Other than Housing and Professionals
5%
General Provision on unclassified Special Mention Account
5%
Provision on sub-standard loans and advances
20%
Provision on doubtful loans and advances
50%
Provision on bad/loss loans and advances
100%
General Provision on Off Balance Sheet Exposures
1%
Syful Shamsul Alam & Co.
Hoda Vasi Chowdhury & Co.
Chartered Accountants
Chartered Accountants
The provision rates for general provision on Short term Agricultural Credit & Micro Credit are given below:
Unclassified (Regular & Irregular)
5%
Substandard
5%
Doubtful
5%
Bad/Loss
100%
Loans and advances are written off to the extent that
i) there is no realistic prospect of recovery, and
ii) against which legal cases are filed and classified as bad loss for more than five years as per
guidelines of Bangladesh Bank.
These write off however will not undermine/affect the claim amount against the borrower. Detailed
memorandum records for all such write off accounts are maintained and followed up.
2.11.3 BILLS PURCHASED AND DISCOUNTED
a) Bills purchased and discounted do not include Government Treasury bills and have been classified
into two sub-heads viz.,
(i) Payable in Bangladesh and
(ii) Payable outside Bangladesh.
b) The bills purchased and discounted have been analyzed in the form/terms as per the maturity
grouping.
2.11.4 INVESTMENTS
All investment in securities is initially recognized at cost, being fair value of the consideration given,
including acquisition charges associated with the investment. Premiums are amortized and discounts
accredited, using the effective yield method and are taking to discount income. The valuation of
investment has been enumerated as follows:
HELD TO MATURITY (HTM)
Investments which have fixed or determinable payments and are intended to be held to maturity, are
classified as held to maturity. These investments are subsequently measured at amortized cost, less any
provision for impairment in value. Amortized cost is calculated by taking into account any discount or
premium on acquisition. Any gain or loss on such investments is recognized in the statement of income
when the investment is derecognized or impaired as per IAS 39 ‘Financial Instruments: Recognition and
Measurement’.
HELD FOR TRADING (HFT)
The securities under this category are the securities acquired by the bank with the intention to trade by
taking advantages of short term price/interest movement, and the securities those are classified as HFT
by the Bank held in excess of SLR (net of CRR) at a minimum level. Investments classified in this
category are principally for the purpose of selling or repurchasing on short trading or if designated as
such by the management. In this category, investments are measured in fair value and any change in the
fair value i.e. profit or loss on sale of securities in HFT category is recognized in the statement of income.
alue of investments is stated as per the following bases:
Particulars
Valuation
Method
Government Securities:
Government Treasury Bills
Present Value
Prize Bonds
Cost Price
Bangladesh Bank Bills
Cost Price
Special Treasury Bonds
Present Value
Reverse Repo
Cost Price
Debentures of Govt. Corporations
Cost Price
Other Investments (Quoted Shares)
Market Price
Other Investments ( Other than Quoted Shares)
Cost Price
INVESTMENT IN LISTED SECURITIES (QUOTED)
These securities are bought and held primarily for the purpose of selling them in future or held for
dividend income. These are reported at market price. Unrealized gains or losses are not recognized in
the profit and loss account.
INVESTMENT IN UNLISTED SECURITIES (UN-QUOTED)
Investment in unlisted securities is reported at cost under cost method.
2.11.5 RECOGNITION OF FIXED ASSETS
All Property and equipment are classified and grouped on the basis of their nature as required in BAS-1“ Presentation of Financial Statements”. The major categories of Property and equipment held by the
bank are property (Premises & Buildings), Library Book, Furniture and fixtures, electrical Installations,
Typewriters and calculating machines, Computer/Software, Motor Car and other vehicles. As per Para
31 of BAS 16 after recognition as an asset, an item of property, plant and equipment whose fair value
can be measured reliably shall be carried at a revalued amount, being its fair value at the date of the
revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment
losses.
ASSETS ACQUIRED UNDER OWN FINANCE
All Fixed Assets are stated at cost less accumulated depreciation as per BAS-16.Property, Plant &
Equipment. The Cost of acquisition of an asset comprises its purchase price and any directly
attributable cost of bringing the assets to its working condition for its intended use inclusive of inward
freight, duties and non-refundable taxes.
The bank recognizes in the carrying amount of an item of property plant and equipments the cost of
replacing part of such an item when that cost is incurred if it is probable that the future economic
benefits embodied with the item will flow to the bank and the cost of the item can be measured reliably.
Expenditure incurred after the assets have been put into operation, such as repairs and maintenance is
normally charged off as revenue expenditure in the period in which it is incurred.
As guided in paragraph 30 of BAS-16 Property Plant and equipment these are capitalized at cost of
acquisition and subsequently stated at cost less accumulated depreciation. The cost of acquisition of an
asset comprises its purchase price and directly attributable cost of bringing the assets to its working
condition for its intended use inclusive of inward fright, duties and refundable taxes. The opening and
closing carrying amounts of all property and equipment are presented including the amount of
additions, disposals and depreciation charged during the year as required by paragraph 73(a-e) of BAS16, Maintenance expenses that does not increase in the future economic benefit of assets is charged to
profit & loss account.
5
Syful Shamsul Alam & Co.
Hoda Vasi Chowdhury & Co.
Chartered Accountants
Chartered Accountants
2.11.6 DEPRECIATION ON FIXED ASSETS
As required in paragraph 43 of BAS-16 property Plant and equipment depreciation has been charged at
the following rates on reducing balance method on all fixed assets other than motor vehicles and
computer software which are depreciated on straight line basis and no depreciation on land is charged.
Category of the assets
Land
Building
Rate of depreciation
Nil
2.50%
Library Book
7%
Furniture and fixtures
10%
Electrical Installation
20%
Typewriters and Calculating machines
20%
Computer/ Software
20%
Motor Car and other vehicles
20%
Depreciation on newly acquired assets is charged in full if the assets are acquired within 20 December
and no depreciation is charged on assets acquired after 20 December. In case of assets disposed of,
depreciation is charged up to the date of disposal of such assets. During the year overseas branches
shown BDT 5, 05,962 as depreciation on fixed assets and certified by the local independent auditors.
2.11.7 OTHER ASSETS
Other assets comprise investment in Sonali Exchange Ltd. Inc USA, Prepaid Expenses, Branch
adjustment and others as per Bangladesh Bank Circulars.
2.11.8 NON- BANKING ASSETS
There are no assets acquired in exchange for loan during the period.
2.12 LIABILITIES AND BASIS OF THEIR VALUATION
2.12.1 Statutory reserve
As per section 24 of the Bank Companies Act 1991, 20% of the net profit i.e, profit before tax require to
transfer to statutory reserve until such reserve equals to its paid up capital.
2.12.2 OTHER RESERVE
Other Reserve comprises are Balance of reserve for unforeseen losses, investment, Revaluation reserve
and fixed assets revaluation reserve as on 31st December 2010
2.12.3
2.12.4 EXCHANGE EQUALIZATION FUND
This represents the amount arise from exchange gain due to devaluation of Bangladesh taka with
foreign currencies and is accounted for as per instruction issued by the Bangladesh bank from time to
time.
2.12.5 RETIREMENT BENEFIT SCHEMES
Accounting recognition & measurement, as well as the disclosures requirements for different benefit
schemes for employees are the following:
6
Syful Shamsul Alam & Co.
Hoda Vasi Chowdhury & Co.
Chartered Accountants
Chartered Accountants
2.12.5.1
EMPLOYEES GENERAL PROVIDENT FUND
Employees General Provident fund is operated from 13 September 1981 under which the concerned
employees are required to contribute at least 10% and highest 30% (on declaration) of their basic
salary with no matching contribution by the bank. This Fund relates to the employees who are availing
Pension and Death-Cum-Retirement Benefit (PDCRB) Scheme.
2.12.5.2
CONTRIBUTORY PROVIDENT FUND
The bank operated a Provident Fund named as Contributory Provident Fund into which the bank
contributed 10% of the basic salary of its eligible employees while the employees contributed an equal
amount to the fund.
2.12.5.3
PENSION AND DEATH-CUM-RETIREMENT BENEFIT (PDCRB) SCHEME:
The bank operated a Pension Fund named as Pension and Death-Cum-Retirement Benefit (PDCRB)
Scheme for the employees of General Provident Fund into which the bank contributes 50% of the
basic salary of its eligible employees. Payments out of this fund are made to the employees on their
separation from bank’s service.
2.12.5.4
GRATUITY.
The Bank introduced the Gratuity scheme for the member of the Employees of Contributory Provident
Fund into which the Bank contributes 50% of the basic salary of its eligible employees. Payments out of
this scheme are made to the members on their separation from bank’s service.
2.12.5.5
INVESTMENT OF THE PENSION/GRATUITY FUNDS:
The balance of Pension/Gratuity funds are partly invested in approved securities with a view to
increasing the Fund and remaining balance being utilized by the bank towards payment of retirement
benefits to the employees.
2.12.5.6
ADMINISTRATION OF THE FUND:
The Provident Fund, Pension Fund and Gratuity are being administered by two administrative
committees each of which consists of 5 (five) members representing 3 (three) from Board of Directors,
1 (one) from officers and another from members of the staff.
2.12.5.7
BENEVOLENT FUND
This fund is mainly created for sanctioning scholarship to the meritorious students among the children
of the Bank employees. The distressed employees and family member of deceased employees are also
helped from this Fund.
2.12.6 DEPOSITS AND OTHER ACCOUNTS
Deposits and other accounts include bills payable have been analyzed in terms of the maturity grouping
showing separately other deposits and inter-bank deposits. Unclaimed deposits for 10 years or more
held by the bank have been shown separately.
2.12.7 TAXATION
Income tax represents the sum of the current tax and deferred tax payable.
2.12.7.1 CURRENT TAX
Provision for current income tax has been made @ 42.5% as prescribed in the Finance Act 2010 on the
accounting Profit made after considering some of the taxable add back income and disallowance of
expenditure in compliance with BAS-12.
Syful Shamsul Alam & Co.
Hoda Vasi Chowdhury & Co.
Chartered Accountants
Chartered Accountants
2.12.7.2 DEFERRED TAXATION
The Bank has adopted deferred tax accounting policy as per Bangladesh Accounting Standard (BAS) 12.
Deferred tax liabilities are the amounts of Income tax payable in future periods in respect of taxable
temporary difference.
Deferred tax assets are the amount of income tax recoverable in future periods in respect of
• deductible temporary differences
• the carry forward of unused tax losses and
• Carry forward of unused tax credits
Deferred tax is computed at the prevailing tax rate as per Finance Act 2010.
2.12.8 PROVISIONS AND ACCRUED EXPENSES
In compliance with BAS-37, Provisions and accrued expenses are recognized in the financial
statements when the bank has a legal or constructive obligation as a result of past event, it is probable
that an outflow of economic benefit will be required to settle the obligation and a reliable estimate can
be made of the amount of the obligation.
2.12.9 PROVISION FOR OFF-BALANCE SHEET EXPOSURES
In compliance with Bangladesh Bank guidelines Off-Balance Sheet items have been disclose under
contingent liabilities. As per BRPD Circular No.10 dated September 18, 2007, Banks are required to
maintain provision @ 1% against Off-Balance Sheet Exposures (L/C, Guarantee and Bills for Collection).
2.12.10 PROVISION FOR NOSTRO ACCOUNTS
According to guideline of Foreign Exchange Policy Department of Bangladesh Bank, Circular no.
FEOD(FEMO)/01/2005-677 dated 13 September, 2005, Bank is not required to make provision
regarding the un-reconciled debit balance as at Balance Sheet date since there was no debit entries
more than three month.
2.13 REVENUE RECOGNITION
Moment of recognition, amount to be recognized and disclosure requirements of revenue has been
made as per BAS-18
2.13.1 INTEREST INCOME
In terms of the provisions of the BAS-18 “Revenue”, the interest income is recognized on accrual
basis. Interest on loans and advances ceases to be taken into income when such advances are classified.
i)
ii)
iii)
iv)
v)
Interest on unclassified loans and advances is calculated on daily product basis but
charged
and accounted for quarterly and in some cases yearly on accrual basis.
No interest is recognized on loan classified as bad/loss.
Interest is charged on classified loans and advances as per BRPD Circular No.05 dated 05 June 2006.
Interest suspense and penal interest, if any, calculated on classified loans and advances is
taken as income in the year of receipt of such interest from the defaulting borrowers.
Commission and discount on Bills Purchased and Discounted are recognized at the time of
realization.
NVESTMENT INCOME
Interest income on investments is recognized on accrual basis. Capital gain on investments in shares
is also included in investment income. Capital gain is recognized when it is realized.
i)
ii)
iii)
iv)
v)
Income on investment in Treasury Bills, Bonds and Debenture etc. other than shares has
been accounted for on accrual basis.
Income on investment in shares of subsidiary company-Sonali Exchange Co. Inc. USA is accounted
for as and when it is received.
Govt. securities (HTM) are revalued on accrual basis and effect of such revaluation gain has
been credited to Asset Revaluation Reserve account.
Dividend/Other Operating Income are recognized at the time when it is realized.
et increase in securities held to maturity during the period due to the valuation at mark to market
basis has been credited to profit and loss account.
2.13.2 FEES AND COMMISSION INCOME
• Commission charged to customers on letters of credit and letters of guarantee are credited to
income at the time of effecting the transactions.
• Fee and Commission on bills discounted, purchased & others are recognized at the time of
realization.
• And exchange gains or losses arising out of such transactions are recognized as income or
expense for the year foreign currency transactions are converted into BDT at prevailing on the
dates of such transactions and dealt with exchange account.
2.13.3 INTEREST PAID ON DEPOSIT AND BORROWING
Interest paid on deposits, borrowing and other expenses are recognized as accrual basis.
2.13.4 DIVIDEND INCOME ON SHARES
Dividend income from shares is recognized during the period in which they are declared and actually
received.
2.14 RECONCILIATION OF INTER-BANK AND INTER-BRANCH ACCOUNT
Accounts with regard to inter bank (in Bangladesh and outside Bangladesh) are reconciled regularly and
there are no material differences that may affect the financial statements significantly.
2.15 PROFIT/LOSS OF OVERSEAS BRANCHES
a)
Profit/loss of the bank’s overseas branches has not been reflected in this profit and loss account. As
a matter of policy, such operational results are shown in the profit and loss account only after
receipt of remittance of profit pending which, the losses or profits are shown in the Balance Sheet
under the head “Other Assets or Other Liabilities”.
b)
In consistent with the past practices the net balance of accumulated profit and loss of BDT.
27,473,281 relating to Kolkata and Siliguri (India) branches respectively at 31 December 2010 are
included under other liabilities in these accounts.
2.16 RISK MANAGEMENT
Bangladesh Bank has identified 6 (Six) core risks for management of the banks and has provided the
necessary guidance for implementation of the six risks are:
The prime objective of the risk management is that the Bank takes well calculative business risk to
safeguard its capital, financial resources and growth of sustainable profitability. In this context, the
Bank has formed a committee (MANCOM) to overview proper implementation and regular monitoring
of these critical areas. The policies and procedures for managing these risks are outlined in the notes
below. The Bank has designed and implemented a framework of controls to identify, monitor and
manage these risks, which are as follows:
Syful Shamsul Alam & Co.
Hoda Vasi Chowdhury & Co.
Chartered Accountants
Chartered Accountants
a) Credit Risk Management
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and
cause the other party to incur a financial loss. Concentration of credit risk arises when a number of
counter parties are engaged in similar business activities, or activities in the same geographical region,
or have similar economic features that would cause their ability to meet contractual obligations to be
similarly affected by changes in economic, political or other conditions. To manage credit risk, the Bank
applies credit limits to its customers and obtains adequate collaterals. Credit risk in the Sonali Bank
Ltd.’s portfolio is monitored, reviewed and analyzed by the Credit Risk Management (CRM).
CRM determines the quality of the credit portfolio and assists in minimizing potential losses. To achieve
this objective, CRM formulates appropriate credit policies and procedures for the Bank to ensure
building and maintaining quality credits and an efficient credit process.
Sonali Bank Ltd has established Asset-Liability Management Committee (ALCO) to screen out the
banks/financial institutions and determine the maximum risk exposure on each of them. ALCO also
assesses recommends and controls cross border/country risk.
To manage the Non-Performing Loans (NPL), Sonali Bank Ltd has comprehensive remedial
management policy, which includes a framework of controls to identify weak credits and monitoring of
these accounts.
B) FOREIGN EXCHANGE RISK MANAGEMENT
Foreign Exchange Risk is defined as the possibility of losses due to change in exchange rates interest
rate etc. according to market forces. The Foreign Exchange Risk of the Bank is minimal as all the
transactions are carried out on behalf of the customers against underlying Foreign Exchange
transactions.
Treasury Division independently conducts the transactions and the Back Office of Treasury is
responsible for verification of the deals and passing of their entries in the books of account. All foreign
exchange transactions are revalued at Mark-to-Market rate as determined by Bangladesh Bank at the
month -end. All NOSTRO accounts are reconciled on daily basis and outstanding entries beyond 30 days
are reviewed by the Management for their settlement.
C) ASSET LIABILITY RISK MANAGEMENT
Asset Liability Committee (ALCO) of the Bank monitors Balance Sheet Risk and liquidity Risks of the
Bank. The Balance Sheet Risk is determined as potential change in earnings due to change in rate of
interest foreign exchange rates and regulatory instructions, which are not of trading nature. Asset
Liability Committee (ALCO) reviews Liquidity requirement of the Bank, the maturity of assets and
liabilities, deposits and lending, pricing strategy and the Liquidity contingency plan. The primary
objective of the Asset Liability Committee (ALCO) is to monitor and avert significant volatility in Net
Interest Income (NII), investment value and exchange earnings for the purpose of taking future action
plan for better interest of the organization.
D) MONEY LAUNDERING RISK MANAGEMENT
Money laundering risk is defined as the loss of reputation and expenses incurred as penalty for being
negligent in prevention of money laundering. For mitigating the risk the Bank has designated Chief
Compliance Officer at Head Office and Compliance Officer at Branches, who independently review the
transactions of the accounts to verify suspicious transactions. Manuals for Prevention of Money
Laundering, KYC and Transaction profile have been introduced. Training has been being imparted to
Executives, Officers and staff for developing awareness and skill for identifying suspicious transactions
and other Money Laundering related activities.
E) INTERNAL CONTROL & COMPLIANCE RISK MANAGEMENT
Operational loss may arise from errors and fraud due to lack of Internal Control and Compliance.
Inspection and Audit Division controls operational procedure of the Bank and undertakes periodical
and special audit of the branches and departments at Head Office for review of the operation and
compliance of the statutory requirement. The Audit Committee of the Board subsequently reviews the
report of the Audit and Inspection Division as well as other related division, as and when required.
10
Syful Shamsul Alam & Co.
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Chartered Accountants
Chartered Accountants
F) GUIDELINE ON INFORMATION & COMMUNICATION TECHNOLOGY:
This IT Guideline is a systematic approach to policies required to be formulated for IT and also to
ensure security of information and information systems. This guideline covers all information that is
electronically generated, received, stored, printed, scanned and typed. The provisions of this guideline
apply to:
1. Sonali Bank Limited for all of its IT system.
2. All activities and operations required to ensure data security including facility design, physical
security, network security, disaster recovery and business continuity planning, use of hardware and
software, data disposal and protection of copy rights and other intellectual properly rights.
The implementation of MIS will be linked from the branches to the central database. In the future the
information will be easily accessible by senior management and is expected to be important source of
information of strategic decision-making process based on a comprehensive database. It is to be
declared that the Bank is fully compliant according to the guideline of Central Bank’s IT policy.
2.17 CALL LOAN AND FIXED DEPOSIT WITH THE ICB ISLAMIC BANK LTD.
The Bank has demanded payment of Call Loan and Fixed Deposit for BDT 18.00 crore and BDT 14.58
crore respectively together with up-to-date interest accrued thereon. Attempt is made for recovery the
Call Loan and Fixed Deposit.
2.18 CREDIT RATING OF THE BANK
As per the BRPD instruction circular No.6 dated July 5, 2006, the has done its credit rating by Credit
Rating Information and Services Limited (CRISL) based on the financial statements dated 31 December
2009.
Particulars
Date of Rating
Long term
Short term
As
24
AAA (Highest Safety)
ST-1
Government
supported entity
Stand Alone Rating
November
2010
(Highest
Grade)
A- (Adequate Safety)
ST-2
(Good
Grade)
2.19 COMPLIANCE REPORT ON BANGLADESH ACCOUNTING STANDARDS
(BAS) AND BANGLADESH FINANCIAL REPORTING STANDARDS
(BFRS)
The Institute of Chartered Accountants of Bangladesh (ICAB) is the sole authority for adoption
of
International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). While
preparing the financial statements, Sonali Bank Limited applied most of IAS and IFRS as adopted by
ICAB. Details are given below:
Bangladesh Financial Reporting Standard (BFRSs)
BFRS
Status
No.
Shares Based Payment
2
Not
Applicable
Business Combination
3
Applied
Insurance Contracts
4
Applied
Non Current Assets Held for Sale and Discounted Operation
5
Applied
Exploration for and Evaluation of Mineral Resources
6
Applied
Financial Instruments: Disclosures
7
Applied
Operating Segments
8
Applied
11
Syful Shamsul Alam & Co.
Hoda Vasi Chowdhury & Co.
Chartered Accountants
Chartered Accountants
Name of the BAS
BAS no.
Status
Presentation of Financial Statements
1
Applied
Inventories
2
Applied
Statement of Cash Flows
7
Applied
Accounting policies, Changes in accounting Estimates
and
8
Applied
Events after the Reporting Period
10
Applied
Construction Contracts
11
Not Applied
Income Taxes
12
Applied
Property, Plant and Equipment
16
Applied
Leases
17
Applied
Revenue
18
Applied
Employees Benefits
19
Not Applied
Accounting for Government Grants and Disclosure
of
20
Not Applied
The Effects of Changes in Foreign Exchange Rates
21
Applied
Borrowing Costs
23
Applied
Related Party Disclosures
24
Applied
Accounting and Reporting by Retirement Benefit Plans
26
Applied
Consolidated and Separate Financial Statements
27
Applied
Investment in Associates
28
Applied
Disclosures in the Financial Statements of Banks and
similar Financial Institutions (supersedes by BFRS-7)
30
Applied
Interest in Joint Ventures
31
Not Applied
Financial Instruments: Presentation (supersedes by BFRS-7)
32
Applied
Earning Per Share
33
Applied
Interim Financial Reporting
34
Applied
Impairment of Assets
36
Applied
Provision, Contingent Liabilities and Contingent Assets
37
Applied
Intangible Assets
38
Applied
Errors
Government Assistance
OFF-BALANCE SHEET ITEMS
Under general banking transactions, liabilities against acceptance, endorsements, and other obligations
and bills against which acceptance has been given and claims exists there against, have been shown as
off balance sheet items.
Off Balance Sheet items have been disclosed under contingent liabilities and other commitments as per
Bangladesh Bank guidelines.
As per BRPD circular #10, dt 18 Sep 2007, 1% provision should be maintained against off- balance sheet
items.
2.20 EARNING PER SHARE (EPS)
The Company calculates Earning per Share (EPS) in accordance with BAS 33: Earning Per Share, which
has been shown on the face of profit & loss account, and the computation of EPS is stated in Note 44.
2.21 APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved by the Board of Directors on 23 May, 2011
12
2.22 INFORMATION ABOUT BUSINESS AND GEOGRAPHICAL SEGMENTS
The Bank’s operations are divided under the following business segments:
Retail and Corporate banking operations are under the umbrella of the commercial banking. The bank
has Treasury Management Division (TMD) for Treasury Management.
Inter segment transactions are operated on inter branch fund transfer measures as determined by the
management. Income, expenses, assets and liabilities are specially identified with individual segments.
Based on such allocation, segmental information has been prepared as on 31 December 2010 and
information related to Profit and Loss Account for the period ended 31 December 2010:
Particulars
Operating profit before Tax & Provision
Provision against Investment
Other provision
Total Taka
5,625,989,744
(1,004,184,181)
Profit/(Loss) before Taxes
1,620,358,504
Provision for Current Tax
1,070,000,000
Deferred Tax Assets
(2,187,251,898)
Net Profit after Tax
2,737,610,402
Segment Assets
649,267,923,086
Segment Liabilities
649,267,923,086
In addition, the geographical segments of the Loan and Advances are shown separately under the Note
no. 7.8.
2.23 IMPLEMENTATION OF BASEL-II
To comply with International best practices and to make the Bank’s capital more risk-sensitive as well
as to build the Banking industry more shock absorbent and stable, Bangladesh Bank provides revised
regulatory capital framework “Risk Based Capital Adequacy for Banks” which is effective from 1st
January 2009. According to the BRPD Circular no-09 dated 31st December 2008, following specific
approaches are suggested for implementing BASEL-II:
a)
b)
c)
Standardized Approach for calculating Risk Weighted Assets (RWA) against Credit Risk;
Standardized (Rule Based) Approach for calculating RWA against Market Risk; and
Basic Indicator Approach for calculating RWA against Operational Risk
Under the Standardized Approach of the Risk Based Capital Adequacy Framework (Basel II), Credit
Rating is to be determined on the basis of risk profile assessed by the External Credit Assessment
Institutions (ECAIs) duly recognized by Bangladesh Bank.
Along with the existing capital adequacy rules and reporting Bangladesh Bank (ref. BRPD Circular no.10
dated 25.11.2002) Banks will start quarterly reporting as per the set of the reporting formats provided
by Bangladesh Bank. For the purpose of statutory compliance during the period of parallel run i.e. 2010,
the computation of capital adequacy requirement under existing rules will prevail.
Bank Ltd. Management is aware about guideline of Bangladesh Bank and prepared for implementing
new capital Accord BASEL-II.
2.24 GENERAL
a) These financial statements are presented in Taka. Figures appearing in these financial statements
have been rounded off to the nearest Taka.
b) Figures of previous period from 01 January 2009 to 31st December 2009 have been rearranged
wherever necessary to confirm current year’s presentation.