Across financial years ending 2007 through to 2013, ACS’ asset base reduced slightly from $7.8m to $6.6m. While not a significant decrease, ACS was moving towards its 50th year anniversary and Management Committee was conscious of ensuring ACS would be thriving for the next fifty years.
Enhanced expectations were progressively introduced around diversifying revenue streams, growing product lines, and financial sustainability such as requiring any proposed projects to be accompanied by a breakeven budget or better.
Assessments on proposed projects started to include not only how outcomes would support ACS objectives, but also their size of impact. Project proposal frameworks and project management methodologies were modernised, and enhanced rigour established for post implementation reviews.
The Reimagination Thought Leaders’ Summit was one of the resulting approved projects which has just completed its fifth year and is now considered business as usual.
Management Committee was cognisant that first and foremost, members want to be part of a strong and successful community. And while a sound and growing asset base is part of that expectation, it is not the primary purpose.
Member expectation of ACS is about value creation, and the degree to which we are successfully contributing to growing the skilled ICT workforce and lifting professional standards and professional practice.
To meet these expectations, a new operational funding model was introduced. Previously capitations per member were used to fund member services in each Branch. The new model returned all membership fees to the Branch of that member for funding member services.
Contributions to shared services (such as IT, human resources, finance) were phased out altogether. While there were membership growth expectations, these were at the aggregate level. Branches were incentivised to select member segments of their own choosing as they were best placed to understand the needs of members in their local markets.
Fast forward to today, and at the end of 30 June 2019, ACS has an asset base of $29.6m. While there is some way to go to be in the vicinity of membership size and turnover of longer standing professional bodies in fields such as law, accounting, engineering and governance, ACS has graduated from the small-sized professional bodies into the mid-size of professional bodies.
In terms of ongoing financial stewardship, ACS retains a conservative investment risk appetite. While no longer relying on cash investments, invested funds are highly liquid optimising flexibility and agility.
Future investments are considered in the context of retained earnings. All long term contracts such as office leases can be fully funded from retained earnings ensuring there is no reliance on generating extra returns in future years to meet contracted commitments.
A commitment to continuous improvement has resulted in an investment review project over the last 18 months, led by independent experts and a formal Request for Proposal process that resulted in a change in investment strategies in May 2019. Historically ACS would receive approximately 2.5% from term deposits which in 2019 reduced to 1.5% due to falling cash rates.
The investment funds are forecast to achieve between 6-8% annually assuming the deposits are kept there for a five-year term. The review also resulted in a consolidation of banking accounts to ensure returns for members would be maximised and realise a cost saving in administration.
The annual budgeting and resource allocation process is robust. The risk and audit function is undertaken by the Business Assurance Committee with an independent chair and independent internal audit regime, all in addition to the annual independent external audit of the financial controls and financial position presented in the Financial Statement at the Annual General Meeting.
The increased financial position of ACS enables further investment towards achieving our vision for Australia to be a world leader in technology talent, fostering innovation and creating new forms of value.