3. Briefing Notes The briefing note assignments are designed to help us apply the concepts and theories outlined in this class. A briefing note is a common form of communication within government and should be within the toolkit of any policy analyst. Upon completion of the assignments, we will be able to: 1. Prepare a succinct briefing note on an identified problem. TITLE OF BRIEFING NOTE Issue: This section is a concise statement of the issue, proposal or problem. This section should explain in one or two lines why the briefing notes matters to the reader. It sets out in the form of a question or a statement what the rest of the note is about. Background: The section contains the details the reader needs to understand what follows (i.e., how a situation arose, previous decisions/problems, actions leading up to the current situation). Typically, this section gives a summary of the history of the topic and other background information. It may answer questions such as: What led up to this problem or issue? How has it evolved? Do not repeat information that is included in the Current Status section. Current Status: This section describes only the current situation, who is involved, what is happening now, the current state of the matter, issue, situation, etc. Assessment: This section is a summary of important facts, considerations, developments - everything that needs to be considered now. While the writer will have to decide what to include and what to leave out, this section should be as unbiased as possible. The aim is to present all the details required for the reader to be informed or to make an informed decision. Writers should keep the reader's needs uppermost in mind when selecting and presenting the facts. Remember to substantiate any statements with evidence and to double check facts. Summary: This section contains the conclusion and/or recommendations that the writer intends for the reader to infer from the briefing notes. Be mindful that many readers jump immediately to this section, so be sure it covers the points that are most important for the reader to be clear about. Do not introduce anything new in the Summary. If a recommendation is being put forward, they should be provided based on the best and most sound advice available. The writer will make sure the recommendation is clear, direct and substantiated by facts. A. Briefing Note A: Scenario: To Consolidate, Or Not Most members of the Finance team were surprised that the CEO of the Hospital had suggested, without analysis, that the Board of Directors establish a Foundation. His idea was first raised at the Finance Committee of the Board. There was nothing unique about the formation of a Foundation itself, rather it was the rationale. "We have gone long enough in being treated unfairly by government and the health authority. As an affiliate of the health authority, we have never been recognized fully for our capital equipment and renovation needs" stated the CEO. "That has got to change." The hospital board had just received a sizeable estate, that included cash, property, several producing oil wells, and sizeable long term financial investments. The size of the estate meant not only cash in reserves, but a significant source of revenue in the form of investment income, oil lease income, rental income, and mineral rights. The CEO knew how to get his board on-side. It was like throwing chum in the ocean, with board members seeking to do what was best for the corporation. "If this estate shows up on our books, not only will our argument for our fair share of funding be weakened, but we may put at risk what capital funding we currently do receive. The health authority will recognize the donation and the potential income and reduce our annual budget accordingly" according to the CEO. "It is for that reason that I recommend that we form a separate corporation, a Foundation, to receive this and all future donations to the hospital." The record for the shortest committee meeting and decision-making process in the hospital's history was suddenly interrupted by an analyst. That analyst was you. You were suddenly overcome with asking several questions, of questionable relevance, that you knew needed to be asked. "I need to know first, more about this Foundation. Who will it accountable to? Who owns it? Who approves its bylaws? Who appoints its Board? Who approves its strategic and operational plans?" What was appearing at first to be a brief meeting with full consensus suddenly raised many more questions and discussions than the CEO had anticipated. The meeting was adjourned without a conclusion. It wasn't 30 seconds after the meeting was adjourned that the CEO along with the CFO approached you. "I am sure you must have a good reason for asking these questions, although I am at a loss as to why you did this. It disrupted the meeting, caused confusion and I lost what appeared to be a consensus because of you muddying the waters. Why did you do that?" Your response was "I asked these questions and pursued these topics for the benefit of the organization, its board, the funder, and the public. Creating a Foundation may be the right thing to do, but not for the reasons you stated. I believe the answers to my questions (and others) will be necessary to determine whether or not the financial statements of the Foundation will need to be consolidated with the hospital's financial statement regardless, defeating your very rationale for forming a Foundation in the first place". The CEO responded in frustration "I am in no mental state to discuss this matter right now. I will meet with you and the CFO in the morning to better understand this". Assignment Prepare a briefing note on the matter described, referencing principles and standards of accounting. Under what conditions would consolidation of financial statements be required, and under what conditions could separate financial statements be justified between two legal entities? Why?