[Discussion] Divisions of TEST - Part Deux: the Finanicals of Financing Frumendies.

[NKato]

So, I'm gonna start another topic regarding Divisions of TEST. This time, it'll deal with how we want to manage our organization finances. Let's recap my division proposal:

1. The Divisions are: Combat, Logistics, and Economics.
2. These Divisions are not de-facto authorities of Squads in TEST, however they are responsible for funding and supporting said squads.
3. Squads can be established by any individual or group, the only requirement is that they must be declared within a category that falls under one of these three divisions. (Exceptions exist for outlaw squads.)
   
4. Squads can operate independently or under TEST Directives, depending on their preference.

With that out of the way, we'll move on to the financial model of TEST Squadron.

Our biggest challenge, and concern, is to compartmentalize our finances so that any attempt to subvert, sabotage, or interfere with our continued operation as an organization is minimized. All while preventing financial waste.

Our second largest challenge, and concern, is to bring in a respectable income that will guarantee the continued operation and potential future expansion of TEST Squadron.

To address these two points, we need to consider how we're going to manage the cash flow, and where these flows will go. Like the divisions of TEST, we have a "trinity" already in place. The wallet can be divided into three divisions, each division of the wallet under their respective authorities.

This ensures that we can move forward with the following scenario:

A new squad is established, named TEST Starlines, with the aim of running a civilian passenger service. To obtain seed funding or a grant from TEST Squadron, they must issue a circular document, which is essentially a request for funding according to a budget estimate, and follows the three points:

1. The circular must explain what the Squad needs.
2. The circular must explain how the Squad intends to spend the money.
3. The circular must explain how this plan/proposal will benefit TEST Squadron.

Once the circular is formulated and sent to the Division Chief, in this case Logistics, the Chief will review the document and determine whether or not the budget requested is acceptable or not, and make the required increase or reduction to the budget. After that, the Chief issues the funds to the Squad.

This ensures a paper trail for the majority of financial disbursements to TEST Squads, allowing us to investigate any possible misappropriations should there be reason to suspect such. In addition to that, it enables us to do internal audits by qualified individuals when necessary.

You might think this is absurd and a lot of paperwork, but to me, it's just simply the Squad hitting each of the three bullet points with only a few sentences. An example circular:

From: TEST Starlines Squad
To: Logistics Division
Subject: Circular Proposal for Establishing Civilian Passenger Service between Sol and Terra.

Requested Budget: 500,000 UEC
Planned Purchases/Expenditures: 3 Starliners, NPC crew, and player pilot pay. Possible hangar rentals.
TEST ROI: 50% of our profits go to TEST Squadron.

That's literally all you'd have to write. It'd be up to the Chief to decide if the circular is approved, or needs clarification. (In the event of a clarification, it'll typically require a meeting or a PM conversation between the individuals involved.)

It's a fairly straightforward system that should reduce the amount of headaches involved regarding the management of finances in TEST Squadron, while also ensuring that people in high places don't have to worry about handing out money like candy. The paper trail is a pro, not a con. Additionally, it would allow Seung and Montoya to rest more comfortably in trusting the Divisions with TEST Squadron's financial accounts.


If you have any questions or anything you'd want me to clarify, please post them in this thread, and I will address them as adequately as I can. Remember, the game is still incomplete, and this is all theoretical - and therefore, still a possibility.

Treat this as a mental exercise, if you will. I hope you enjoyed the read.

Update:

NKato: Econ would probably set up transport contracts with Logistics, which allows money to flow from Econ to Logistics
NKato: And Combat would set up weapons procurement contracts, which allows money to flow from Combat to Logistics
NKato: And Logistics can set up escort contracts, allowing money to flow from Logi to Combat
Black Sunder: that keeps the money in TEST....
NKato: Exactly
NKato: That's the whole idea
NKato: To make sure we don't incessantly send money outside the TEST ecosystem
Black Sunder: we need to call this the circular theory of org finances

 

[LiterallyAlty]

Makes for basic fiscal accountability, while also allowing delegating responsibility from Our Beloved Leader. Also, keeps middle management to the largest it should be. Seems like a solid initial plan.
For those that don't know, I have a great deal of experience with expansive middle management and questionable fiscal tracking. DO NOT WANT AGAIN!!!!!!!!!!!!!!!!!!!!!!!!

 

[Black Sunder]

If Rock Raiders is made official in any way under the Econ Division I doubt we'll need any starting capital because of the interest generated so far and the ships we'll have at our disposal by those interested parties. We'll likely need people more than anything to man the ships to get the ball rolling and money pouring in.

 

[NKato]

If Rock Raiders is made official in any way under the Econ Division I doubt we'll need any starting capital because of the interest generated so far and the ships we'll have at our disposal by those interested parties. We'll likely need people more than anything to man the ships to get the ball rolling and money pouring in.

Yep, some squads will be excellent self-starting units, while others will definitely need some starting capital. Of course, don't discount Divisional support when you need it. What if you guys suddenly run out of fuel and don't have starfarers on hand to refuel your ships? Division Chief to the rescuuuuuuue! :P

 

[Black Sunder]

Yep, some squads will be excellent self-starting units, while others will definitely need some starting capital. Of course, don't discount Divisional support when you need it. What if you guys suddenly run out of fuel and don't have starfarers on hand to refuel your ships? Division Chief to the rescuuuuuuue! :p

I'm still thinking that Fuel is one of those things that most every squad, no matter what it is, will have people whose job or hobby will be collect fuel all the time to keep the fleet flying.

 

[GrammarGestapo]

one simple way to compartmentalize finances is to only allow specific people to actually distribute them. For instance, Seung and montoya (ie, pretty damned unlikely to defect). It seems simple enough for a department head to request funds of a certain amount, and then let one of those two confirm it and send. We won't have THAT many departments in need of funding.

The issue is payouts. For instance, say TEST is about to engage in large scale org warfare. We want to ensure all our guys are up to snuff in the combat department, so we may distribute some org funds so people can get some decent guns on their ships. Having just montoya/seung handle individual things like that would be mind mindbogglingly complex. So, it may be better to have those two create a budget, and then transfer that budget to separate accounts for each section so org leaders can outfit their section without fear of them running off with too much cash.

In regards to who we'll fund, we should only fund our navy, logistics to supply that navy, and then our economics division which encompasses all money-making activities for the org as opposed to the individual. People can make all the squads they want, but in the end we shouldn't be giving handouts to little groups of friends.

 

[honcho12]

they must issue a circular document

I propose that the circular document must be submitted on moebius strips.

we shouldn't be giving handouts to little groups of friends.

I think we should give handouts to anyone who has a cool idea that needs funding! What if someone needs funds to find out just how many drunks can fit in an aurora? Or how many auroras fit in the sun? Funds will be coming from the org, so they should also flow back into the org.

 

[NKato]

People can make all the squads they want, but in the end we shouldn't be giving handouts to little groups of friends.

And that is why I mentioned the idea of a circular document as a requirement for receiving any kind of "handout". :p Fail to meet the expectations set forth in said circular, and you can probably expect to NOT receive any handouts in the future for any other projects you do.

 

[WarrenPeace]

Seems like a good idea. Ideally, CIG will make sure to include basic tools in the treasury setup, so that we can authorize certain trusted people to release funds, attach explanations for withdrawals and deposits, and basically track all of the finances in game. That way, we could have a second copy of transactions out-of-game to detect discrepancies.

 

[Kahoshi]

Mmm glorious combat...

 

[Guss De Blöd]

It's a good system, as simple as writing a mail.
The only thing that could go wrong is if the division leader gives money to the wrong persons.

This system is finally about investing : one guy ask money for thing , in exchange he'll give some of the benefit the thing brings.
So if you lend the money to someone who will never makes money out of this money ( the word money has been said too many times already); you'll never get your money back and the org will be out of cash quite quickly (maybe not if taxes, or stuff, we don't know yet).

So for it to works , it rely on 2 things :
1/ wise leader who gives money to people who will actually make a profit.
2/ honest members who ask money for things.

I can already see people says:

"Need Money for good explo ship for explo squad best squad"
Get the money, buy the ship then stop playing for 2 months, never give anything back.

BUT I think it's the best we got, no system is without "risks" , and the huge advantage of this system is that it's simple enough for anyone to use it properly.

 

[AntiSqueaker]

It's a good system, as simple as writing a mail.
The only thing that could go wrong is if the division leader gives money to the wrong persons.

This system is finally about investing : one guy ask money for thing , in exchange he'll give some of the benefit the thing brings.
So if you lend the money to someone who will never makes money out of this money ( the word money has been said too many times already); you'll never get your money back and the org will be out of cash quite quickly (maybe not if taxes, or stuff, we don't know yet).

So for it to works , it rely on 2 things :
1/ wise leader who gives money to people who will actually make a profit.
2/ honest members who ask money for things.

I can already see people says:

"Need Money for good explo ship for explo squad best squad"
Get the money, buy the ship then stop playing for 2 months, never give anything back.

BUT I think it's the best we got, no system is without "risks" , and the huge advantage of this system is that it's simple enough for anyone to use it properly.

For ships, it might be a better idea to have "org owned" or "loaner" ships available instead of giving people money to buy their own.

Hypothetically say I have a Hornet, Retaliator, Freelancer, and Hull C. I can't fly all 4 at the same time obviously, but I would be more than happy to lend them out at no cost to a TESTie if I'm not planning on using them for a while (ex: going on a long range cargo run with a Freelancer, or escort gig with a Hornet, I could lend out the Hull C.). It's no real loss if it's blown up since I wasn't planning on using it anyway!

And the best part is, it's still your ship, so if the player just ducks out and quits TEST, or just quits Star Citizen overall, then you can just get it back in game once the rental period is up. Unlike money.

 

[SeungRyul]

This idea holds merit for subdivisions we are going to have in TEST rather than assigning budgets for members who want to buy a ship, exotic dancers, etc. We can perhaps integrate it with a central website we have in the future so squadrons can just fill out a ticket and a finance guy can approve/deny the funding etc.

 

[Shenanigons]

For instance, say TEST is about to engage in large scale org warfare....

Lets take a moment to let that sink in.

 

[Kahoshi]

Lets take a moment to let that sink in.

...Aurora Swarm?

 

[NKato]

For ships, it might be a better idea to have "org owned" or "loaner" ships available instead of giving people money to buy their own.

In this case, I would probably use the divisional funds to purchase (or locate existing org-owned hulls of) the ships themselves, and stage them at a location that the squad can access, and then make them available, if we were to use the Starliner scenario outlined in the OP.

This would be safer than letting them use the money to purchase it themselves, so it should only be in rare exceptions that the applying squad will be able to use the money to purchase the ships, such as if they're out in the boonies/fringe, and the Division Chief doesn't have any authorized personnel available in those regions to purchase and stage the ships as needed.

 

[Fenrig]

Like this?

From: TEST Federated Association of Tactical Brewers And Large Liquid Supply
To: Economics Division
Subject: Circular Proposal for Establishing FATBALLS Fuel Services in Sol and Terra.

Requested Budget: 1,500,000 UEC
Planned Purchases/Expenditures:

• 2 Starfarer
• 4 Starfarer Gs
• NPC crew
• Initial player pilot/crew pay
• Hangar rentals

TEST ROI:

• 35% of our profits go to TEST Squadron paid on a TBD schedule
• 15% for future capital projects
• 50% for operating incidentals and profit sharing via partial disbursement on a TBD schedule as profit-sharing to players participating during periods on that same TBD schedule (payout totaling 60% of net balance increase during that period). The remaining balance will be similarly disbursed on an annual basis (1 calendar month after the EOY) covering the entirety of player activity for the last year, the exception being that the remaining 40% will be paid to the Economics Division.

 

[Myre]

With all these percentage signs flying about it seems like we're going to need a bunch of dedicated treasurers/book-keepers. How delightfully convoluted :rolleyes:

 

[Liquor_and_ores]

I will more than likly loan out my Orion and or Starfarer for org activitys if I can't be present for them

if the ships repairs/upkeep are maintained then have it :D

 

[Black Sunder]

With all these percentage signs flying about it seems like we're going to need a bunch of dedicated treasurers/book-keepers. How delightfully convoluted :rolleyes:

Which is why Spreadsheet Squadron will be a thing. We literally need people in each Division that handle this and this alone but work together as their own unit.