|May 23, 2011
According to John Ciccarelli, Vice President - Finance, AACE International posted a $347,361 contribution to surplus in fiscal year 2010. Ciccarelli cited results from the year-end independent audit report provided by Tetrick and Barlett, PLLC, a certified public accounting firm that specializes in not-for-profit tax returns. According to the audit report, the Association generated overall revenues of $2,844,721 while incurring $2,537,360 in expenses during FY2010. As of December 31, 2010, AACE International net assets grew to $1,578,784.
“This year, the AACE Board and Headquarters implemented consistent procedures to monitor and control the financial status of the Association, and I am pleased to see the results confirmed by the audit” stated Ciccarelli. He reported that the Board of Directors receives monthly financial status reports showing income, expense and balance sheets from AACE International Headquarters. The audit report states: “In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of AACE International as of December 31, 2010, and December 31, 2009, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.”
Compared to last year, the Association experienced a 9.6% increase in overall revenues, led by a 28% increase in certification fee revenue. AACE International also posted significant gains in gross membership dues, Annual Meeting registrations and publication sales. On the expense side of the ledger, AACE International posted a 4.7% increase in expenses; mostly attributable to variable costs associated with the increased revenues.
With total net assets of $1,578,784, AACE International now has a reserve ratio of 58.6% against annual expenses (the American Society of Association Executives (ASAE) suggests that professional associations maintain a minimum reserve of 50% for strategic purposes).
“As a Board of Directors, we are pleased that we have maintained created a strategic reserve that meets the 50% requirement of the ASAE and the Association’s Policy. We have maintained a firm financial position that will enable the Association to implement our recently adopted strategic plan,.” Ciccarelli commented.
The Board and Headquarters put in extra effort this year to develop the FY2011 Budget from the ground-up. By using conservative income projections and realistic, zero-based budgeting assumptions for expenses, the Association should be able to maintain adequate strategic reserves while expanding our membership programs and benefits. Two major new benefits that will be available to members include, AACE Presents and the Visual Total Cost Management Framework. AACE Presents will be monthly online programs featuring narrated presentations from previous Annual Meeting technical papers and the Visual Total Cost Management Framework will be an interactive visual presentation of the Total Cost Management Framework.
Ciccarelli also reported that the Board of Directors at its April 2011 meeting adopted a formal policy requiring a comprehensive business plan for all new major programs that come before the Board for funding. The plan requires new programs to indicate how it specifically advances the strategic plan and mission of the Association while projecting both financial, volunteer and staff resources.
Through the first quarter of 2011, AACE International is reporting a $91,544 positive variance against its anticipated budget driven largely by greater than anticipated increases in membership and investment returns. Through three months, income exceeded projections by $66,388 while expenses were $25,156 less than anticipated. Ciccarelli closed by stating, “We look forward to taking advantage of our strong financial position to improve the already strong benefits AACE provides to its members and to the industry through FY2011.”