IABC, PRSA disclose extent of financial ills

SAN FRANCISCO AND NEW YORK: Within hours of each other, the PR industry's two largest associations last week revealed the full extent of their troubles.

SAN FRANCISCO AND NEW YORK: Within hours of each other, the PR industry's two largest associations last week revealed the full extent of their troubles.

SAN FRANCISCO AND NEW YORK: Within hours of each other, the PR industry's two largest associations last week revealed the full extent of their troubles.

Just three days after a tempestuous board meeting at which the International Association of Business Communicators (IABC) revealed 'huge errors' and an 'unbelievably sloppy level of accounting practices,' the PRSA also announced a huge financial loss for 2000, despite projections that the association would break even.

In a conference call to its leadership and industry reporters last week, PRSA officials estimated the group's loss at more than dollars 650,000. Covering the loss has taken a heavy toll on the group's reserves.

PRSA chairman and CEO Kathy Lewton blamed 'problems with policy, software that doesn't work, and poor judgement calls' for the shortfall.

The troubled body had projected generating dollars 387,000 from its annual convention, she said, but instead made only dollars 42,000. Compounding that loss, it discovered dollars 100,000 in unpaid bills from 1999 and found that it had unexpectedly crossed a tax threshold that year, costing it dollars 135,000 in back taxes, penalties and interest.

In an attempt to cut spending, the PRSA is bringing Strategist, its quarterly publication, in-house. Outside 'professional fees' for the title were dollars 144,897 in 1999.

The PRSA's full audited figures will be released in April.

Meanwhile, IABC interim president Lou Williams summed up the weekend-long board meeting by identifying four key errors that contributed to the body's disastrous state: poor governance by a large and 'unwieldy' board; 'inappropriate' communication; 'lack of financial management;' and 'resources miscalculation.'

After previous insistence that IABC's highly criticized Web site, TalkingBusinessNow.com was viable, Williams finally admitted regret over its cumbersome cost: 'Ultimately the risk of (the site) was so far out of IABC's range of understanding and problem-solving capability that the organization literally was unable to assimilate it.'

The site will be studied in depth to determine its future. 'The type of spending that was done on behalf of (the site) could never be done again,' he promised.

Williams also renewed his vow to improve transparency in the body's activities: 'Let's just say that as an organization of communicators, we did not exemplify the best in communications practices.'





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