FSB Scandal by HTDBS - FSB 1999 Annual Accounts Analysis

Source of The Accounts Information

The following information was extracted from the FSB's Directors' Report and Financial Statements for the accounting year to 30 September 1999.

Financial Report Perused

The figures published in the notes to the accounts were 'dissected and re-assembled' in an effort to show how much of the £ 12.5million taken in by the FSB; including advance subscriptions of £ 4,946,000 shown at page 9 of the Annual Report and Financial Statements.

Some Information Not Available

Some important facts could not be discerned from the FSB 1999 Directors' Report And Financial Statements.

A note of selected points is reported further down this page, immediately following the revised income expenditure accounts. Remember, in 1999 the FSB received well over £ 12million from members.

Your Observations Please

Please address your observations regarding the material published on this web-page/web site, to HTDBS, using any of the contact details shown on the home-page of this web site. Your specific notification of any further information and/or omissions would be welcome.

Details of the possible write-off of over £ 113,000 of FSB members funds, as mentioned on page 12 Note 1.1 of the FSB 1999 Directors' Report, is sought. Members have reported that, like the 'Report', the information at the March 2000 FSB Annual General Meeting was sketchy.

Additional Information Held By HTDBS

Details of the make-up of the figures published on this page are available from HTDBS, by e-mail or fax.

Similar analyses of the FSB 'Financial Statements' for 1998 and 1997 and 1996, are also available from HTDBS upon request.

A Revised Summary of the FEDERATION OF SMALL BUSINESSES 1999 Annual Income and Expenditure Account ( Accounting Year Ended 30 September 1999 )

Income/Cost Group	Row Ref	1999 £	Cost as % of Op.Inc.

OPERATING INCOME Subscription and Joining Operating Income TOTAL OPERATING INCOME DIRECT COSTS GROSS SURPLUS ( A3 minus B ) OFFICERS/MEETINGS COSTS National Offrs Costs (5 Members) National Cttee Chairmen Costs Policy Committee Costs Disputes & Disciplinary Cttee Costs Procedures Committee Costs Recruitment and Membership Committee National Meetings/Conference Costs Other Committee Costs National Conference Costs National AGM Costs Scottish Convention Region/Branch Committees Expenditure Region Officers Meetings General Election Campaign TTL OFFICERS/MEETINGS COSTS DIRECT MEMBER-BENEFITS COSTS Members Legal Insurance Scheme Bureaucratic Injustice Fighting Fund Members Test Cases and Assistance Petrol Retailers Campaign TTL DIRECT MEMBER-BENEFITS COSTS OTHER ADMINISTRATION COSTS National and Regional Magazines Staff, Offices, Regional Organisers Prime Charitable Trust Accountancy and Audit Subscriptions and Donations Other Costs TTL OTHER ADMIN COSTS TOTAL FOR ALL COSTS ( D15 plus E5 plus F7 ) OPERATING LOSS ( C minus G ) OTHER INCOME Interest and Rental Income Profit on Asset Sale TOTAL OTHER INCOME SURPLUS BEFORE TAXATION ( H plus I3 ) Deduct TAX LIABILITY NET SURPLUS FOR YEAR ( J minus K )	A A1 A2 A3 B C D D1 D2 D3 D4 D5 D6 D7 D8 D9 D10 D11 D12 D13 D14 D15 E E1 E2 E3 E4 E5 F F1 F2 F3 F4 F5 F6 F7 G H I I3 J K L	- 10,266,330 1,528,972 11,795,302 3,055,100 8,740,202 - 89,098 36,867 482,717 17,490 17,978 120,929 129,505 177,946 321,772 2,542 62,492 1,426,879 25,980 - 2,912,195 - 1,924,522 50,000 - 20,395 1,994,917 - 1,012,348 2,332,033 6,000 7,784 29,025 489,102 3,876,292 8,783,404 -43,202 - 379,257 -7,887 371,370 328,168 155,411 172,757	- 87.04% 12.96% 100.00% 25.90% 74.10% 24.69% 16.91 32.87% 74.47% -.37% -3.15 2.78% 1.32% 1.46%
This revision prepared by Hubert Taylor from the information published in a copy of the FSB 1999 Annual Report which was sent to HTDBS by a current FSB member. 14 April 2000 (fsbacc99.cal)

FURTHER OBSERVATIONS

17% Of Income On Spent Direct Member Benefits?
But... 25% On Establishment Meetings!

The above figures suggests that while 16.9% of the total FSB income was spent on direct members' benefits, 24.7% was spent on meetings among 'FSB establishment' members!

The misuse of funds and mistreatment of some of its members suggests that a more appropriate initials for the organisation would be FSBP; abbreviated from 'fleecing small business people'.

Insufficient Details Of Payments To FSB Volunteers Officers And Committee Members

The financial statements did not provide sufficient details to show how much of the substantial sums paid to or on account of individual senior elected officer/members of the FSB. Scrutiny by FSB members would guard against the possibility the FSB breeding 'fat cats'.

Such details could assist FSB members to debate as whether their interests might be better served by the FSB employing qualified executives who would be answerable for their performance.

Financial Statement Warns Of Possible £ 113,000 'Potential' Loss

The 1999 financial statement in a single, sketchy paragraph, informed FSB members that the National Council had approved the write off of a potential loss of £ 113,424 by subsidiary, NFSE Sales Limited.

How the £ 113,000 could be lost, was not made clear in the Annual Report, nor was it made clear 'who' was responsible for the 'potential loss'. The 'bucket' appears to be moving so fast between NFSE Sales Ltd, the National Council, the Executive Committee, and the National Officers, that there is a risk of members becoming dizzy. Obviously there is a whole in 'this' bucket.

More Clarification And Written Reports Needed

There was insufficient information in the accounts to discern how the following monies were spent by the senior elected members who were responsible for the various committees which cumulatively spend £millions of members subscriptions each year.

Expenditure Heading	£

Prime Charitable Trust (included at Row Ref F3, in the accounts above) (1999 FSB Annual Report page 7)	6,000
Disputes & Disciplinary Committee Costs (included at Row Ref D4, in the accounts above) (1999 FSB Annual Report page 21 Note 21)	17,490
Procedures Committee Costs (included at Row Ref D5, in the accounts above) (1999 FSB Annual Report page 21 Note 21)	17,978
Regional Officers' Meetings (included at Row Ref D13, in the accounts above) (1999 FSB Annual Report page 21 Note 21)	25,980
Bureaucratic Injustice Fighting Fund (included at Row Ref E2, in the accounts above) (1999 FSB Annual Report page 7)	50,000
NFSE Sales Ltd (potential Loss Of Over £ 113,000 ?!) (Is loss provided for in FSB accounts to 30 Sep 99) (1999 FSB Annual Report page 12 Note 1.1)	113,424
Sub-Committee Costs (Policy Committee) (included at Row Ref D3, in the accounts above) (1999 FSB Annual Report page 20 Note 17)	183,861
General Expenditure (Policy Committee) (included at Row Ref D3, in the accounts above) (1999 FSB Annual Report page 20 Note 17)	89,966
Petrol Retailers Campaign (included at Row Ref E4, in the accounts above) (1999 FSB Annual Report page 22 Note 21)	20,395
Test Cases and Assistance To Members (included at Row Ref E3, in the accounts above) (nil spent but FSB claims major test case!) (1999 FSB Annual Report page 20 Note 17)	nil
Provision for 1999/2000 Conference In 1998 A/c (How was the £ 25,000 set aside in 1998, spent? ) (1999 FSB Annual Report page 21 Note 21)	25,000

Is £ 12million FSB Run As Part-Time Concern?

At the time of this report the £ 12million a year FSB was being run, without the close support of a 'civil service', and solely by elected 'volunteer' members, some of whom, try unsuccessfully, to keep their own small businesses 'afloat'.

How can someone, whose business is up to £ 300,000 in debt, still able to afford 'voluntarily time', to assist FSB members?!

Perhaps, substantial honoraria and massive expense accounts from FSB funds are considered, compensatory. But, do FSB members get value for money or are lame-ducks being subsidised?!

The FSB's 1999 Financial Statements indicate that the activities by those 'volunteer activists' cost the FSB well over £2million in the year ended 30 September 1999.

Drift Towards A Public Scandal?

Those in close or lose contact with FSB affairs should rightly wonder if the organisation is drifting towards an even bigger scandal than that which nearly consumed it in 1975.

FSB members are encouraged to support a call for an INDEPENDENT INQUIRY into the affairs of the FSB by way of DTI and police investigation of certain seriously questionable activities within the FSB.

Commentary For Clean And Open Management

To reassure FSB members and the UK public, please bring this article to the attention of your Member of Parliament so that the investigators of the Government's Department of Trade and Industry along with the police mount a inquiry which is independent of the present FSB hierarchy.

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