A thought on YETI's financial integrity
Manish Kumar
This a matter that has been troubling for a while now and hence the only
plausible way out was to place it infront of everyone.
The issue is related to financial transactions of YETI, especially the
cash payment to caterers against a 10% discount. Details are as follows:
1. The cash payment discount is clearly an issue of tax evasion, which
was accepted by the catering service (on phone). By law any outdoor
catering service is subjectable to 10.2% service tax
(http://ilovehyd.com/service-tax/outdoor-catering-services.html and
also confirmed by the catering service). If we pay by cheque, the money
is traceble and the catering service cant avoid the tax. If we pay by
cash, they can find ways to avoid it without much trouble.
Hence, the issue is whether we as responsible organisers of YETI want to
commit an illegal act of tax evasion?
If we don't, the best way is to pay the tax and make the whole
transaction by cheque so that the money is traceable and accountable.
This process was recommended by the Accounts heads of two organisations,
ATREE and CHIRAG.
2. The other issue is of maintaining a transparent account of YETI
income and expenditure. By default, IISc accounts department is acting
as the financial support agency for YETI 2010, where all the money is
currently being routed and all the bills submitted. All organisations
have an upper cap of payment by cash (eg. ATREE has upper cap of Rs.
10000) and thus IISc will also insist on payment by cheque for such a
large sum of 3 lakhs to caterer. This will require us to deposit the
whole registration income into IISc account before giving it to the
catering. There are ways to do this and we need to speak to IISc
accounts about it.
Depositing the registration income into IISc account will also turn the
grey cash into white, thus lending authencity to the YETI financial
transaction.
3. This leads to the final bone of contention. By paying the tax, which
may amount to additional Rs. 30000/-, the overall budget is under
deficiet by approx. Rs. 8415/-. This is while planning for 500
partcipants (including 30 free passes for speakers and press), which is
a lower estimate calculated based on approx 633 registered and expected
participants.
Apart from this, we should have a buffer amount of approx Rs 30000/- for
any last minute expenditure (which of late are turning up right &
left!!). Adding this, makes the current budget short by approximately
Rs. 38000/-.
4. Hence, the question arises of how to tackle the shortfall of Rs.
38000/-?
I personally dont think financial matters should be put to vote as they
are better handled in a meeting by consensus way. Hence, I request all
of you to give the whole issue a thought and discuss at the meeting. It
will be of help if anyone, with more information and experience can
provide inputs, so that we as organisers can make an informed decision
Sorry for the long mail.. but I think the issue is important for YETI's
and thus our financial integrity.
Regards
Manish
Robin Vijayan
Manish and I have had this talk going on for a while. He insists on paying tax, because he thinks that is the RIGHT way to do things.
I think his is a genuine concern and we should address it. Which is why I met Karthik Shanker and spent some time discussing this. I surely would like YETI to be transparent and clear with financial dealings. Karthik gave me some suggestions and asked me to meet Dakshin's chartered accountant, also the CA of ATREE, WCS, FRLHT and WCS.
The main points:
1. YETI is not a legal entity. We do not have any legal standing. We CANNOT hence issue receipts. We also CANNOT pay tax or open bank accounts. We should not try to behave like an organization when we are not. The CA actually said "Who are you to give receipts?"
2. The way both Karthik and the CA suggested we approach this is that consider that we are having a party and get people to come, so one person collects money and buys the food. Similarly this is an informal gathering of research students and we should just consider that participants are paying the caterer, while we are only acting as a go-between.
3. IISc is not hosting YETI. That has never been decided, YETI is a free body of students and we never agreed to IISc apply its rules to us. IISc is letting us accept some money so we can make the payment for JN Tata through IISc. In fact they have no problems with the current situation.
4. Currently the money for food goes from registration plus other cash in hand. IISc is not involved and does not care about this.
5. Since we got financial advice by someone who handles so many organizations' accounts that we can pull this off, I dont see why we should not go ahead
6. Finally, this morality-illegality drumbeating is a bit out of place. YETI is not technically a part of IISc either, so should we be paying the full charges for JN TATA? Isnt it illegal to lie and deceive JN TATA people of their revenue? There are a number of things you can bring up similarly. But we are not playing this game. The fact is that we dont have the money to play this game.
Since Manish thinks this is so important, I think we should respect his feelings for this. Here is what I propose.
Lets go ahead with YETI. We have a ton of other things to do and this is irritating to keep changing the budget and going into panic. We just have 2 major payments and we have money for it.
We dont have to make any payments or do anything different till the end of YETI when the food guy has to be paid and we can decide then if we need to pay with tax or without.
My feeling is that we may not get all the numbers on paper, but who knows, this year may be different. If we do save some money, we know exactly how much money we have. If we have enough money let us pay the tax. If we dont, let us meet then and decide what to do.
We do have back up money from NCBS and I am sure other organizations would not mind helping out too.
But..pleeaseee, its enough that both Manish and I have wasted a LOT of time on this, two people's time is bad enough....there is no need to waste everybody's time arguing and changing budget scenarios and looking at doomsday versions, we have a lot of actual stuff to do.
Robin
PS Manish, I think I beat you in mail length ;)