Job to do for Macaulay

PIAA tells us Andrew Macaulay beat out around 100 other applicants for the role of CEO despite having no experience in print or any associated industries. As much I would have preferred to have a printer in the role, we cannot be precious. Australian print is not exactly swimming in first rate management talent, so an outside hire is just as likely a good thing as not.

Last year Macaulay was being touted as a replacement for NSW Premier Barry O’Farrell in his safe Sydney seat. Presumably such good government connections will work in our favour.

On the same day PIAA announced the new CEO it released the 2015 annual report, with some interesting reading, given recent events.

For starters, PIAA is down to 1051 members. That is thirty fewer than at the end of 2014. In February PIAA was spruiking ‘record numbers of new members’ and an ‘improved retention rate for existing members’.

Now both those statements could be true and PIAA could still end up with a net decrease in members, but that would imply the number of existing members who resigned in 2015 was significant – presumably around ten per cent. There is an alternative explanation for the discrepancy between the public statement and the actual results but I will leave you to mull that over.

For seconds, the number of staff on the books at the end of 2014 was 28. After what could only have been described as a tumultuous year in HR, and much talk of a leaner more customer focused organisation, at the end of 2015 the staff levels had been reduced to 27.

Seems like a lot of trouble to go through to lose one head, but from all accounts the Queensland and Victorian offices have lost a lot of staff. If that is still true, where have they been hiring the new staff? How many people are working on the PIAA Facebook page?

Let’s get to the money. You may recall successive presidents and CEOs talking about how they had turned the organisation around from a 2014 loss of $46,557 to a 2015 profit of $386,751. It was always discussed in a tone that implied the much-discussed-but-rarely-seen business plan was working and PIAA was back on track, and here is all the money we are making.

As I see it the truth is that $386,751 profit is only there because the profit from the sale of the Auburn offices, $1,062,925, is sitting in the Other Income line. Without the sale of Auburn PIAA would have been listing a loss 14 times greater than the one in 2014. If you doubt me, check the cash flow results. In 2014 there was a positive cash flow of $172,171 but in 2015 that became a negative cash flow of $792,357. That is a deterioration of some $964,528 in twelve months.

Where did this money go? There is no clear answer but there is an entry under Other Payables with the helpful line title of Other that has been reduced from $2,130,321 in 2014 to $521,538 in 2015. This might be some accounting tool that is outside my expertise but if not, a $1.5m transaction undertaken by a member organisation turning over $3.9m deserves more information than Other.

The books do however answer one of my most nagging questions – what is happening with the money from Auburn. We already know $1m went straight to save the P&L but the balance seems to have been put in a deposit. Presumably that $2.8m is going to be kept fairly liquid in anticipation of future shortfalls but what happens once it’s gone?

These results confirm that PIAA was and likely still is in trouble. And all of a sudden all those board resignations are starting to become a bit more understandable. The new board are a pretty strong bunch on paper, and they have unanimously picked Macaulay to carry out their plan to save PIAA. With results like this they will all have their work cut out for them.

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