AACE International Board of Directors Approves 2012 Budget
January 24, 2012
In accordance with its operations policies, on November 17, 2011, the AACE International Board of Directors approved the Fiscal Year 2012 budget projecting $3,113,053 in income and $3,129,896 in expenses for a net operating deficit of $16,843. According to VP Finance John J Ciccarelli, PE, CCE, PSP, AACE International’s budgeting philosophy continues to employ the conservative revenue assumptions and the use of underlying cost factors in projecting expenses that were used last year to develop the FY2011 budget. Ciccarelli cited the example of using no net growth in membership in 2012 compared to 2011 as an example of this conservative approach (while noting that net association membership increased by 5.6% in 2011 and more than 50% in the past seven years).
Ciccarelli commented that the slight deficit projected in the FY2012 operating budget is reasonable considering: a) the association’s strong investment reserves, b) its multiple year pattern of exceeding budget expectations, c) the momentum created in key revenue producing areas such as membership, certification and annual meeting registrations, and c) the exclusion of interest and investment revenue from the FY2012 revenue projections.
This prudent approach to budgeting helped us report a preliminary year-end FY2011 that was actually $7,021 better than projected. The amended approved budget for FY2011 called for gross income of $2,765,043 and gross expenses of $2,798,499 for a planned deficit of $33,456. Actual gross income was $2,837,390 while gross expenses totaled $2,885,760, creating a net deficit of $48,370. Ciccarelli noted that, considering this deficit includes a $22,867 loss in investment income, this was a positive variance against the anticipated deficit budgeted for FY2011. Ciccarelli also noted that the reported loss for 2011 included the one-time legal fees and expenses associated with the move to the new headquarters office.
John stated that the FY2012 budget approval process “was very efficient and completed timely as we used the process established last year and just like last year, the Board was able to fulfill almost every funding request and provide funds to implement expanded programs and initiatives, like the International Total Cost Management Conference, to meet the needs of the AACE membership.”