ABA Treasurer's Report
| Author | Michelle Behnke |
| Pages | 37-39 |
MAY 2019 ABA JOURNAL || 37
ABA Treasurer’s Report
Another year has passed, and it is once again my opportunity to report on the finances of the
ABA. I will start with our fiscal 2018 results as audited by Grant Thornton. I will then report
on the year-to-date results for fiscal 2019, and finally I will outline the work on the fiscal year
2020 general operations budget. This last segment will cover a recap of the financial changes
over the last four years and the challenges to be addressed as we implement our new member-
ship model.
YEAR-END AUDIT AND FINAN CIAL RESULTS
Grant Thornton issued an unqualified audit
opinion for the fiscal year ended Aug. 31, 2018.
The audit includes an audit of our govern-
ment grants. The audit committee reviewed
the audit and recommended acceptance by
the Board of Governors, and the Board did in
fact accept and approve the audit at its meet-
ing Jan. 25.
The good news from FY2018 is that we
added $3.7 million to our net assets1. As you
can see from the chart below (slight dier-
ences due to rounding exist throughout), on
a consolidated basis, operating revenue was
$199.4 million, and operating expenses were $209.3
million, producing an operating deficit of $9.9 million.
Although we had a $9.9 million consolidated operat-
ing loss, we saw strong investment performance ($10.3
million investment income) which was not budgeted for
operations. We also saw a decrease in the pension liabil-
ity because of rising interest rates ($8.3 million). These
two positive changes were oset by the one-time expense
for the Voluntary Separation Incentive Program ($6.7
million).
The revenue shortfall is primarily due to
general operations, made up of dues ($1.9
million), gifts, contributions and sponsor-
ships ($1.2 million), meeting fees ($1.1 mil-
lion), advertising ($0.4 million) and royalties
($0.3 million). The shortfall for sections
($1.7 million) was mostly due to meeting
fees. These shortfalls were oset by favorable
budget variances in grants ($1.5 million) and
gifts ($1.2 million).
The association has historically managed
expenses within or below budget, but the
revenue component of the budget has been
the weak point. In FY2018, expenses were $1.7 mil-
lion favorable to budget and $6 million less than last
year. Favorable variances in sections ($4.5 million) and
gifts ($2.6 million) were oset by unfavorable variances
in grants ($3.6 million) and general operations ($1.8 mil-
lion). The general operations expense line was unfavor-
able to budget mainly due to legal fees.
FY2018 STATEMENT OF FINANCIAL POSITION
(BALANCE SHEET)
Consolidated State ments of Financial Pos ition
(Amounts in millions)
August 31 August 31 Change
2018 2017 Fav(Unf )
Assets
Cash & Equivalents $10.7 $15 .5 $(4.7)
Long-Term Investments 296.5 296.4 0.1
Other assets 33.7 32.9 0.8
Total Assets $341.0 $344.8 $ (3.8)
Liabilities
Deferred Revenue and Def erred Rent Abatement $81.8 $78.0 $ (3.8)
Pension Liability & Loan to Fund Pension Lia bility 61.9 74.8 12.9
Payables and Other Debt 21.4 19.9 (1.5)
Total Liabilities $165.1 $172.7 $7.5
Net Assets
ABA General Operations/FJE Funds $50.9 $53.6 $(2.6 )
ABA Section Funds 111.2 106.0 5.2
Total Unrestricted 162 .1 159.6 2.6
Total Temporarily Restricted - FJE 6.1 5.2 0.9
Total Permanently Restricte d - FJE 7.6 7.4 0.2
Total Net Assets $175. 8 $172.1 $3.7
Total Liabilities and Ne t Assets $341.0 $344.8 $(3. 8)
Consolidated ABA Resu lts - August FY2018
(Amounts in Millions)
Variance to:
Actual Budget LY Budget LY
Operating Revenues $199.4 $203.3 $207.5 $(3.9) $(8.1)
Operating Expenses 209.3 210.9 215.2 1.7 6.0
Operating
Decit $ (9.9) $(7.7) $(7.7) $(2.2) $(2.2)
Investment Income
not in Operations $10.3 $0.5 $12.2 $9.8 $(1.9)
Voluntary Separation
Incentive Program (6.7) - - (6.7) (6.7)
Other Non-Operat ing Items 1.7 0.6 0 .4 1.1 1.3
Results before
Pension Adjustment (4.6) (6. 6) 4.9 1.9 (9. 5)
Year-end Pension Adjustment 8.3 - 12 .2 8.3 (3.9)
Change in Net Asset s $3.7 $(6. 6) $17.1 $10.3 $ (13.4)
1Go to ABAJournal.com/audited_results to see the final
audited results.
Michelle Behnke
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