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.

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 $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


The troubled body had projected generating $387,000 from its

annual convention, she said, but instead made only $42,000.

Compounding that loss, it discovered $100,000 in unpaid bills

from 1999 and found that it had unexpectedly crossed a tax threshold

that year, costing it $135,000 in back taxes, penalties and


In an attempt to cut spending, the PRSA is bringing Strategist, its

quarterly publication, in-house. Outside 'professional fees' for the

title were $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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