This annual report is PEOI first. As illustrated by some of the numbers (number of courses, students or course authors) it is a modest start. The small size of what PEOI offers is explained by the small size of PEOI resources. Resources are limited because PEOI is just another .org start-up on which foundations do not want to take a chance. Proving that PEOI can continue to exist with extremely limited resources, and go through its most trying times could be an objective in itself. But, in fact, PEOI has done a lot better in its first official year than just exist. In spite of operating on a shoe string, PEOI has continued to grow, establish itself, and even claim some accomplishment.

Accomplishments in 2002

The major PEOI accomplishments in 2002 were
- receiving IRS letter of advanced determination of 501(c)(3) status;
- completing a transformation of its data base and its installation on an expanded host server;
- making PEOI web site fully functional in four languages (English, French, Russian and Spanish);
- going through a major fund raising campaign and learning a great deal from it;
- recruiting new board members to form a supportive, knowledgeable and independent board;
- attracting a large number of volunteers to continue course offering expansion.

Critical review of PEOI activities

This section of the report will touch upon each of PEOI main aspects of operations. Much of this discussion is not presented in a promotional upbeat manner, but, quite to the contrary, in very candid - possibly not very exciting - terms in order to try to understand what needs correcting, and what should be done.

1. Students
Student registrations increase by over 400% from 39 in 2001 to 182 in 2002. But the numbers do not tell the true story. First, because no student needs to register as anyone can study on PEOI for free without registration. It is revealing that most traffic takes place for the Financial Analysis course which has the fewest registrations. Second, registration of students will not be useful to them until students perceive a PEOI course completion certificate as something worth seeking, and that will not happen until complete programs of studies are offered (instead of isolated courses). Third, in truth, student recruitment in itself has not been a PEOI priority in 2002 (getting the entire web site up and running was the main goal for 2002).

2. Course offering
As of end of 2002, PEOI still has only the four introductory courses and one advanced course it had two years earlier. However, some of the courses have been translated and a number of courses have been planned and/or started with the help of volunteers (see Course under constructions for the latest progress in new course development). Moreover, it is imperative to seek out potential course authors by searching the internet for course material made available for free and with poor exposure, rather than wait for authors to volunteer. A person must be found to do the searching.

3. Instructors, authors, editors and translators
Recruiting volunteers was started in October and was most successful with "virtual opportunities" on Volunteermatch with 56 applications in less than three months in the following activities:
- 2 instructors
- 8 editors
- 13 computer course authors
- 11 programming course authors
- 3 Linux course authors
- 6 non-computer related course authors
- 8 Spanish translators
- 2 French translators
- 2 Russian translators
in addition to the board member volunteers.

Other volunteer web sites turn out to be poor sources with Idealist producing one volunteer, Servenet and NetAid none. Managing volunteer work has a drawback of being highly time consuming, and needs to be handled by an appointed staff member. Finally, eventually, the majority of course authors will need to be paid, and that is possible only once positive results are obtained from fund raising.

4. Institutional partners
Building relationships with colleges, universities and employers is crucial for student, author and instructor recruitment. In 2002, PEOI did not establish any institutional partner because PEOI has no completed program that colleges and universities could offer to their students. Yet a couple of institutions have expressed interest in using PEOI courses in Nepal and Russia, and more recently Colombia and Paraguay. No contacts have been made with employers.

5. Web site development and content
Establishing the multilingual platform has been the major goal and required a major effort in 2002. (Adding more languages should be much less demanding.) Student procedures (registration, enrolment, testing, grading, grade maintenance and student evaluation) are believed to be fully debugged. Procedures used by authors, editors and translators have been extensively used, and are now operational. Instructor procedures are not fully tested yet.

A license agreement has been developed and posted for authors. It is called an Educational Material Universal Common License. It guarantees authors that courses they write will be used for not-for-profit purposes, for the well-being of all. It assures that their contribution will be recognized, but warns against plagiarism and states disclaimers. The license is common to all authors, thus eliminates the need for separate agreements.

PEOI web site is far from completed. Legal basis for use of courses by students and others must be developed with appropriate disclaimers. A privacy policy must be present. The Employer section must show how employers can use the site (e.g. testing, recruiting and training). The Partner section is also in its infancy.

6. Operations, accounting and administration
In 2002, PEOI benefitted from having all administrative and operational tasks performed by John Petroff out of his home. While a major cost saving, it is also a hinderance as other tasks are unattended. Furthermore, lack of staff is stifling, as, for instance, the filing for fund raising in a number of states is not possible without a treasurer.

7. Fund raising
In early Fall 2002, PEOI sent out 347 letters of inquiry and 61 full proposals to foundations in the United States, that had an interest in higher education, adult education, assistance to disabled and disadvantaged, or promoting information technology, whose geographic programs were national, international or aimed at US northeast (NY and Pennsylvania in particular), and whose scope of assistance included either seed money, program development or operations. Of the 157 that replied (or 37%), most declined because of resource impairment by stock market slump or presence of other priorities, and 14 replies (or 4%) were based on foundation board decisions. Further inquiries suggested that there were no objections as to the format or content of the inquiries. Mailing lists were prepared using Foundation Center data. Several replies suggested to reapply in the future. Others indicated that funding in the first two years of operations could not be expected from them. This experience will be very valuable in approaching foundations with more focus and timeliness in the future.

Financial Statements

PEOI 2002 Statement of Revenue and Expense (in US $)
Revenue	0.00
.	.
Expenses	.
Internet	193.95
Telephone	478.19
Postage	389.40
Bank fees	53.00
State fees	125.00
Publications	1713.43
Supplies	491.73
.	.
Total Expenses	3444.70
Revenue net of expenses	(3,444.70)

PEOI Balance sheet as of 12/31 (in US $)
.	2001	2002
Assets	.	.
Cash	0	86
Other assets	0	0
Total assets	0	0
.	.	.
Liabilities and funds	.	.
Owed to founder	1,122	4,466
Other debt	0	0
Balance of funds	-1,122	-4,380
Assets net of funds	0	0

The road ahead for 2003

The overall strategy presented in "About us" section of PEOI remains in effect, although most targets are modified to reflect delay and cut back. Specific goals for 2003 are
- recruit more volunteers as instructors, authors, editors, translators and board members
- search internet for potential course authors
- complete translation of existing courses
- complete ten new courses of those under construction
- develop the web site further
- conduct fund raising twice (Spring and Fall)
- to the extent fund raising is successful, open office and hire skeleton staff
- seek to establish contacts with institutions of higher learning
- attract more students

Conclusion

However modest PEOI's beginning, the frugality of its operations assures its continued existence, the support of its board and other volunteers gives PEOI strength, and the momentum in PEOI activities suggest a bright future.