News & Notes 645:Funds and Assets Management Committee (FAMC) February and March 2016 Report

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645 icon.jpg   News & Notes 645
16 April 2016



Funds and Assets Management Committee (FAMC) February and March 2016 Report



Regular members: Anandi (Auroville Board of Services), Chali (Sri Aurobindo International Institute of Educational Research), David (Forest group), Matriprasad (Auroville Council), Michael (Auroville Unity Fund), Ranjith (Working Committee), Rathinam (Budget Coordination Committee), Sauro (L'avenir d'Auroville), Sonja (Housing Service), and Ulli (Auroville Board of Commerce).
Temporarily out of station: Jeff (Farm Group).
Other: Mr. Srinivasmurty (Finance & Administrative Officer, Auroville Foundation; currently Secretary-in-Charge) is no longer attending.

Trust & unit topics

The Auroville Board of Commerce (ABC) recommended, and FAMC approved, the appointment of a new Artisana Trust trustee Kumar K., and the trustee resignation of Myriam I. The other trustees are Michel H., and Sundar Rajamani.

ABC requested FAMC input on the pending registration of an activity by Malar and Shivaraj called Malar India Quilts, under the unit, Auro Small Scale Activities (ASSA). In February FAMC had no objections with the clear understanding the activity (for example, storage/production) are not being done in the Rayapetei housing asset, the status of which the FAMC are still reviewing. The ABC was informed.

The Auroville Board of Services (ABS) recommended, and FAMC approved, Social Entrepreneurship Associates (SEA) executive reappointments (after initial 2 year term) of: Aran, Dave S., Gijs, and Marc T. Amir asked not to be reappointed. This was approved.

The FAMC approved the unit, Sumark Construction, move from Auroville Service Trust to Kattida Kalai Trust, with effect from 1 April 2016, and the executive reappointment (after initial 2 year term) of Peter K.

FAMC has continued to be in contact with Gillian and Palani about the smooth running of Hers. FAMC recommended, and Gillian and Palani welcomed, Kumar (currently at Aspiration Financial Service) to work there on a 3 month trial basis. This will have started on 1 April. FAMC also gave support to Roy working part-time, filling in when Gillian, Palani, nor Kumar can be in Hers. FAMC reviewed account details and questions were answered clearly and in a timely manner. Finally, the FAMC let Gillian and Palani know that soon they want to meet to discuss a more long-term vision of Hers.

The FAMC has been in email communication with most of the Auroville eateries regarding the possibility of changing the contribution to City Services. Some responses were received. FAMC then requested the eateries to account for contribution in-kind, for example:

  1. total billing per month;
  2. billing to Aurovilians paid via City Service account;
  3. the amount of discount given to Aurovilians;
  4. the amount of discount given with regards to total billing (in %) to be determined as: discount divided by (total billing + discount) and;
  5. details of other contributions to City Services.

FAMC await the eateries responses to these questions.

FAMC has proposed to create a Hospitality Trust. It is believed this has been presented to the Governing Board (GB). FAMC await the GB meeting minutes before proceeding with creation of the new Trust Deed, and appointment of trustees. Daniel and Susan have been asked and already agreed to be trustees as a start.

The Working Committee (WCom) informed FAMC of the trustee changes of the Bharat Nivas Trust. The changes are: additional trustees Sanjeev A., and Deepti T.. Anu resigned as a trustee.

The Guest Facilities Coordination Group (GFCG) forwarded a Home Stay application from Shivaraj and Malar and requested FAMC input. In February the FAMC replied that it wants to see how the existing unit, Martuvam Healing Forest, functions under Auroville Services / Projects for 1 to 2 years before approving any new activities such as a Home Stay. The GFCG were informed.

Finance topics

In February FAMC approved a Rs. 20 lakhs loan for Auroville Language Lab. In mid-March some FAMC members visited the Auroville Language Lab building site located in the International Zone. After the site visit the subgroup shared with the FAMC members that Mita and Tapas have done a very good work there and they have a lot of energy and enthusiasm. They have many plans for the building and will utilize well the space. It is almost ready and the activities will be moved there very soon. Based on this report the FAMC had no further questions. FAMC thanked them for their time, and let them know there was nothing further now.

The Auroville Council (AVC) recommended a Leaving Auroville Allowance for Victoria P. After some questioning by the FAMC it was determined that Victoria may want to return to Auroville therefore her request for financial support could not be seen to under Leaving Auroville Allowance. The FAMC agreed, on an exceptional basis and due to health reasons, to provide a Rs. 6 lakhs loan to be recovered from the transfer of the stewarded housing asset which will be transferred by the Housing Service to a new steward. The balance of the value of the asset will be kept for Victoria's future housing if she returns to Auroville.

The Investment Group established in 2006, under the FAMC, was revived. The members are Otto, Torkil, and Michael T..

Auroville received some unspecified donations from several donors in a total amount of about Rs. 39 lakhs. After a lot of thoughtful consideration it was finally agreed to provide funds for land protection, Rs. 15 lakhs to the recently approved Assisted Living Home, and an amount to go towards elder care (both in-home care, and convalescence). Presently the FAMC are reviewing the possibility of a 1 room renovation, to be made into 2 rooms, at Arka to be used for patient convalescence. This is being done in consultation with the Housing Service (renovation work). A report of how the unspecified donations have been utilized will be sent to the donors.

FAMC made its two year review, March 2014 to March 2016, of the Repatriation Fund scheme. Some text needed to be clarified. Changes were made and the document redistributed.

FAMC was requested by L'avenir d'Auroville for a Rs. 10 lakhs overdraft to meet immediate expenses in response to Government of India grant cuts. L'avenir proposed to return the housing 'infrastructure contribution' to 1% (it was reduced to 0.5% a few years ago). The overdraft was approved. The request to increase the infrastructure contribution is on hold while FAMC, with the WCom, discuss creation of an Economy “Think Tank” to address the need for Auroville to generate more income internally.

Land topics

FAMC met with Land Board (LB) members several times in February and March to discuss city and greenbelt land purchase, as well as exchange; land protection; cash flow for emergency situations; and more funds for strategic greenbelt purchases.

Housing topics

The Housing Service (HS) requested funds to fence a plot allocated for housing near the Visitors Centre which is in danger of encroachment. FAMC agreed in principle and requested two estimates. FAMC approved Rs. 1 lakh be provided for the fencing, and asked HS to confirm the plot number. The Land Board was requested to confirm this is a plot they have identified as 'at risk'. HS was requested to begin construction as soon as possible.

In February and March the FAMC reviewed several key aspects of the Kalpana housing project. Normally FAMC require an amount of 40% of the estimated costs to be able to start the project. In this case that would be Rs. 5,2 crores. There has been considerable time and energy put into making sure there is no financial risk to Auroville. The project holders have given a financial guarantee, which were included as conditions for issuance of the L'avenir d'Auroville No Objection Certificate (NOC). Other requirements of the FAMC included:

  1. a limit of only 10% apartment allocation to Friend of Auroville [of 43 apartments total];
  2. an FAMC constituted group to review eligibility, and make financial assistance allocations from 10% to 90%, for from 8 to 14 apartments. The project holders will be participants in the group;
  3. The project holders, working presently in Housing Service and Housing Board, need to step out to create clarity of roles. [reference elsewhere in the report the Auroville Council (AVC) question of 'conflict of interest']; #need to include in the project team more Aurovilians, and;
  4. respect of process and making good communication.

After FAMC met the project holders in March, and all points were discussed and agreed, it was agreed to inform L'avenir that FAMC is giving financial clearance on financial conditions:

  • A. The project has secured at least 40% of estimated costs before beginning construction;
  • B. The project holders assume full financial responsibility for the project;
  • C. No more than 10% of the apartments may be allocated for stewardship of an individual with the status Friend of Auroville (FOA);
  • D. All funds for the project are channelled through the Unity Fund.

The next step is for the FAMC to create the review and allocation group. The individuals will be requested to make a clear invitation so that all residents have an opportunity to apply to the Kalpana housing project. Clear eligibility criteria and process information will be provided to the residents.

In March FAMC met with Venkatesh, Vika, Alexey, Robert, Sundar, and Ole from HS, and Vici from the Housing Board (HB) to discuss the FAMC and AVC decision about the Kalpana project holders stepping out of HS and HB. Everyone present was invited to share their thoughts, ask questions, seek clarification and generally express themselves. After an hour of sharing one of the repeated concerns was the request that Satyakam and Devasmita step out of HS/HB “with immediate effect” as had been communicated to them by the FAMC. After the guests left the meeting the members agreed to follow-up with support for a 1 month transition period (through end-April). It was reiterated clearly that:

  • A. When an Aurovilian on a personal initiative is the project holder of a housing project, or is a project holder and is offering financial support to potential residents, they will not simultaneously serve in the HS or HB and;
  • B. This is applicable to the current situation, and will be applicable to future situations.

This was communicated to the HS, HB, Satyakam and Devasmita.

In February FAMC reviewed the Sunship housing project and wrote to the project holders with questions and comments. Questions included:

  • A. do they have documented eligibility and allocation criteria [for the pro bono apartments];
  • B. How many apartments are already allocated, to whom, and on what basis;
  • C. How many apartments are 'promised' but there has been no financial commitment made yet;
  • D. How are they collaborating with the HS on allocation;
  • E. For the allocations already made, who was involved in the decision-making and;
  • F. How many of the apartments are planned to be allocated on a pro-bono basis.

Comments:

  1. housing needs to be for Aurovilians and Newcomers; no more than 10% of the total apartments may be allocated to Friends of Auroville;
  2. the project holders did not approach FAMC for approval of the contractor, after the tender process. This is part of the known and accepted approval process. FAMC asked them to explain why this step was circumvented.

The project holders responded to the FAMC in a timely manner. At the end of this reporting period the FAMC were setting up a meeting with them primarily to talk about a review and allocation group to be formed, similar to the one for the Kalpana housing project, as well as their responses.

FAMC continued to be in communication with the Sacred Groves project holders and to track the progress of the three prototype houses. The project holders asked the FAMC to substantiate comments regarding the volunteers or to retract the statement in writing. They also requested Rs. 5 lakhs to continue the work. After a thoughtful sharing among the members, the FAMC recognized that its communication concerning the well-being of Sacred Groves volunteers could have been worded more clearly, that a tone of inquiry (which was the intention) was not conveyed, and that the statement made could be perceived as accusatory. It was clarified that the FAMC felt a responsibility to inquire. Therefore based on the project holders response and that no subsequent substantiated complaints were made, the matter is considered by the FAMC as resolved. All of this was communicated to the project holders in writing, as they requested. Also, the FAMC approved Rs. 5 lakhs so the work could begin again without any further delay. FAMC requested confirmation of an up-to-date projected cost to finish, and the revised completion date (i.e. stewards can move in).

The HB drafted a “Housing for Recognized Work” paper. They received suggested changes from Carel and Lyle, some of which they agreed to, and some not. The HB then requested the FAMC to comment on all the proposed changes. At the end of this reporting period the FAMC had reviewed the document, made its changes, and was sending the finalized version back to the HB.

HS recommended that Ole become a member of the HB. He is presently a member of the HS. FAMC approved Ole to replace Devasmita on the HB, as one of the HS members, on a 3-month trial basis in accordance with the mandate. The HS was notified.

In March the Active Residents Assembly (ARA) submitted to the FAMC several housing-related questions, as well as a presentation of housing-related research observations and figures, and requested to discuss them with the FAMC. At the end of March the FAMC met with Eugen, Mita, Sandyra and Umberto who shared an overview of their work. The FAMC members answered their questions, and shared their observations and experiences concerning housing.

Other topics

The FAMC and WCom met and discussed:

  • a. guidelines for Trusts and units to be changed to Trust and Unit Regulations and to be approved by the GB;
  • b. centralized Auroville Accounting Service;
  • c. preparation for the GB meeting that took place at the beginning of March.

The Office of the Secretary, Auroville Foundation, requested accounts submission by 15 May 2016. With the WCom the FAMC discussed that this is an impossible date. More realistic is that accounts are ready for audit by end-May, and the audited accounts done by end-June. It was noted that when accounts are submitted on time there are delays of the auditor which are not accurately noted. It may further be recommended the chartered accountants (CAs) do an interim audit (at 6 or 9 months). And the Office of the Secretary may be requested to call a meeting with the CAs. WCom asked FAMC to write a request that they will share with the Office of the Secretary. This was done.

In February FAMC prepared its meeting agenda with the Governing Board. The following topics were highlighted:

  1. Auroville's authority to conduct land sales and the impact that will have on city area and greenbelt land purchasing power;
  2. Government grant procedure;
  3. Relations with the Office of the Secretary: to express a need of support and presence from the Foundation Office. a. Internal audit questions and; b. The submission of balance sheets.

Frederick and Jothi requested FAMC to approve a small plot of land in Kottakarai village for Annanagar sports activities and to make a Memorandum of Understanding (MoU) regarding the same. This plot is in the middle of the village. FAMC have requested the LB to consider how it can be used in a land exchange. At the beginning of March Frederick and Jothi were informed that this land will be used either for commercial development or land exchange, therefore FAMC will not make a MoU with the sports club. The sports activities may continue with the knowledge that there are other plans for this plot of Auroville land.

The AVC requested clarity from FAMC concerning the Human Resources Team (HRT). It was clarified that HRT is answerable to FAMC; communication between HRT and the Budget Coordination Committee (BCC) is for budget purposes only. In March FAMC met with Jyotiprem, Venkat and Veronique who work in HRT. Padmanabhan was absent. They shared that one problem is not having a clear policy on who can get a maintenance and who cannot. Another is not reviewing current maintenances when an individual's financial situation changes. The team also faces a space problem. The FAMC shared some ideas and made several comments however it started to move into details that will be discussed in the study group (see next paragraph).

In March it was agreed a study group of FAMC/AVC/BCC/HRT will be constituted by FAMC to review maintenance. The initial brief is to look at the organization / mandate and to develop maintenance criteria. It was agreed both the overview and the specific need to be worked on. FAMC is forming the study group now.

The AVC asked the FAMC:

  1. Can Housing Service (HS) executives be at the same time Project Holders of Housing Projects?
  2. What is your view on the matter of conflict of interests that this may entail?

FAMC responded that there may be a conflict of interest while one is serving in the HS and becomes the project holder of a new housing project because the Aurovilian would be inclined to engage potential stewards towards the personal project, to the exclusion or diminished representation of other appropriate housing projects, which is clearly one of the main roles and responsibilities of someone serving in the HS. When the Aurovilian, HS member and project holder, gets a benefit from the project, it may conflict with their maintenance allocation and with the time dedicated to the service and to their personal project. If the Aurovilian is not getting any benefit and works on voluntary basis, their responsibilities and duties in both areas may not be clearly separated and act as project holder when they should neutrally be informing and making agreements with interested persons. However if a project holder working in HS is giving or getting the donation towards the housing project, so that houses are offered on fully pro-bono basis, in that case there would not be any conflict of interest, provided it is the HB (or the approved committee) who establishes the clear criteria and makes the selection of the beneficiaries of these houses. FAMC recommended to the AVC that this be addressed, and conferred with the Residents Assembly, at the earliest.

Auroville Consulting proposed to form a fund raising cell starting only with their own projects for the first year. In March FAMC gave its support to this initiative however it was made clear that it may not be considered or stated that Auroville Consulting is 'the' fund-raising entity of Auroville. In addition, FAMC have asked to be provided information about the projects for which they're going to fund-raise and to be given a report after one (1) year. It was reminded that creation of any immovable assets (buildings) needs to be pre-approved by FAMC before fund-raising. All this was communicated to Auroville Consulting.

FAMC reviewed the financial viability of the proposed Assisted Living Home. The project holders replied to the FAMC concerns stating they have Rs. 101 lakhs needed to begin. FAMC approved the Assisted Living Home and informed L'avenir d'Auroville of the same. FAMC requested of the project holders to be provided the criteria for a resident to be welcomed into the home. FAMC asked ask how it will be managed when a resident decides they do not want to stay and need alternative housing in Auroville. FAMC expressed its concern that the home is truly for Aurovilians who need daily care (noting one Aurovilian listed does not at present require daily care). The project holders were informed of the Rs. 15 lakhs unspecified donation which was allocated by the FAMC (see more above).

The FAMC continue to be in communication with Muna and Christine concerning their needs to establish their new housing in the plot located near Dana. FAMC requested infrastructure estimates, and re-evaluated how much could be provided for the housing, including a septic tank, parking, a storeroom, and architect fees. The details are being worked out collaboratively and harmoniously.

There has been a team reviewing 50th Auroville birthday event budgets under “Accelerated Development”. It came to the attention of the FAMC that its members may want to review these proposals. The FAMC asked the 50th anniversary planning team to provide relevant budget information for all proposals that would generate recurring costs. At the end of this reporting period the requested information had been submitted. The FAMC review is pending.

Newcomers S. Rollin and family have terminated their Newcomer period and request compensation regarding funds put into Auroville Child Development School, and a housing asset in New Creation community. It is noted an amount of about Rs. 36 lakhs was provided by the Newcomer as a donation to Auroville Child Development, which included the estimated value of the housing asset of Rs. 22 lakhs. An evaluation of the modified housing asset will be done as per usual procedure for future transfer considerations. FAMC and WCom representatives met with S. Rollin to talk about the family's expectations, and to share about Auroville's usual practices and processes.

Following up from previous reports

In October it was reported the Farm Group and team at Matrimandir were negotiating farm land for a compost project. In February FAMC was informed the negotiation did not reach an agreement. The Matrimandir team is looking at other options for the compost project.

In December it was reported Chandresh made a proposal to the FAMC concerning the annual payment of house tax which would entail the total amount being divided equally by all housing stewards. FAMC recommended the BCC create a budget to pay this tax. In January the BCC replied that it agreed with the FAMC proposal that it is the City Services that will from now pay the house taxes which currently comes to about Rs.4 lakhs annually.