Vetnews | November 2024 2 « BACK TO CONTENTS WEATHERING THE STORM SAVA’s current raging storm is its current financial position, especially its cash flow shortage. It is in a position where commitments cannot be honoured and a solution is needed both short-term and long-term. However kind, any loans or cash received will suffice as a short-term solution but will have to be reimbursed as soon as possible putting a strain on finances in the near future. Thus, as it may help its current position to be able to honour commitments, a medium- to long-term solution needs to be found. But what led to the current situation? The answer is not simple but lies in an unfortunate combination of circumstances albeit with good intentions but with serious financial impacts. These circumstances were inter alia the expenses of the World Veterinary Association Congress, the Mentorship program, remuneration packages and a lower-than-expected income, rather than unnecessary uncontrolled expenses. World Veterinary Association Congress 2024 On the eve of the congress, unforeseen additional expenses caused that a million Rand was suddenly required to continue with the congress. The options were simple, either pay the money, which SAVA did not have at the time, or cancel the event with millions loss due to venue, accommodation and airline costs. The Board of Directors decided to enter into a short-term loan agreement to pay the necessary amount. Unfortunately, the final reconciliation of the finances of the congress has not been completed to establish whether the envisaged R 2 million was made, or the congress ran at a loss. The overrun of the budget was mainly due to unforeseen requirements by the World Veterinary Association and hidden venue costs. Mentorship program The Mentorship program is conducted under the auspices of SAVA but with funds received from HWSETA. Since the inception of the program, it has gone from strength to strength and SAVA was requested to extend the program. In the early years of the program, all went well with the funding and SAVA even made a profit. In 2022, for reasons unknown, there was a shortfall in payments received amounting to almost R1 million. With promises of future funding, SAVA continued the project in 2023 just to be suddenly confronted with the fact that no MOA has been signed between HWSETA and SAVC (SAVA is only the presenter of the program) with SAVA carrying all the costs for the program of well over R 1 million. For 2024 an MOA was just signed for just under R 5 million, but this time on an agreement directly between HWSETA and SAVA. (The information about the program is complex to understand, but if you need more information please contact me or other members of the board). Remuneration Packages The payroll account at SAVA has grown to an unrealistic percentage of the turnover of the association. Annual increases lead to some personnel receiving on average more than market-related salaries. With the additional financial burden, SAVA cannot afford the current payroll account. It has been identified that personnel working for SAVA-affiliated entities were being remunerated by SAVA. With the retirement of Ms Elize Nicholas, it has been decided to amalgamate some of the tasks and not to appoint more personnel. The potential number of members, should all Veterinarians join SAVA can be handled by the posts currently at the SAVA office. Lower Income Although SAVA does generate some income from sponsors, events and services, more than 80% of its income comes from membership fees. Currently, the outstanding membership fees are in the region of R 400 000,00. It has to be noted that veterinarians not paying their membership fees adds to the administrative load of the current personnel at the SAVA office. A major effort was made over the past three years to increase membership by targeting newly qualified veterinarians. Although this was successful, the income will not reflect a large increase as these junior members do not pay the full fee but are incorporated over three years. But how to weather the storm? The SAVA Board of Directors had urgent meetings over the past couple of months and took some drastic decisions to ensure the sustainability of SAVA. Decisions taken were based on two principles: What does SAVA need, and, What can SAVA afford? The World Veterinary Association Congress 2024 has come and gone and not much can be done in terms of its profit/loss. A summary of all the extra costs enforced by the World Veterinary Association will be compiled and forwarded to them for possible reimbursement. Contract management with venues will receive intense scrutiny in future. Although the Mentorship program is seen as a very important program for our young veterinarians, SAVA cannot afford to carry the costs in case other funding does not materialise. The Mentorship program is to be divorced from SAVA and all costs incurred are to be for the account of that structure. It was proposed that a separate legal entity, very much like SAVA-CVC, be created with its own Board of Directors and structure. This entity is to source its own funds with SAVA’s assistance. The money “owned” to SAVA by the programme be seen as a soft loan to be repaid by this entity. The organigram of SAVA was reviewed and minor changes were made. It was felt that, aside from some transfers already approved, SAVA need all the personnel currently employed. However, personnel not working for SAVA per se, be removed from the payroll of SAVA. The salary packages are to be restructured to levels that SAVA can afford. It is foreseen that the payroll account will not be more than 60% of SAVA’s operational cost, a more realistic market-related percentage. The only other alternative, and not a route SAVA wishes to take, is to retrench personnel. But the area in which you as a member can make a difference is to pay any outstanding fees. Again, SAVA is in a difficult position as one of the main reasons for resignation is mooted as unaffordability. If the fees are increased by an above-market-related percentage, more members might resign placing further strain on financial resources. Financial management and oversight will be improved by a Policy and Procedure Manual to be approved at the next Federal Council. Storms can be incredibly tough to weather, but they can also serve as opportunities for growth, resilience, and deeper connections. Growth often occurs outside our comfort zones. We must embrace the journey, stay committed to move forward to feel the sunshine on our faces again. v Kind regards, Paul van der Merwe From the President Dear members,
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