The Association’s 2008-2009 fiscal year ended on September 30, 2009. To certify the accuracy of the Association’s financial statements and the integrity of its accounting systems, the Executive Board retained the independent audit firm of Legacy Professionals LLP to examine the Association’s financial records.
The most important part of the audit report is an opinion as to whether or not the statements present fairly the Association’s financial position at the end of the fiscal year. In its report to the Executive Board, Legacy Professionals rendered an unqualified opinion that the Association’s financial statements “present fairly, in all material respects, the financial position of the American Association of Law Libraries as of September 30, 2009 and 2008, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.”
In February 2010, the Association’s Finance and Budget Committee met with the Legacy Professionals representatives responsible for the audit. At that time they presented the audit report along with comments regarding the overall financial condition of the Association. Committee members had an opportunity to ask questions regarding the statements, methods, records, or procedures employed by the financial staff during the meeting. The report identified no significant difficulties, disagreements with management, corrected/uncorrected misstatements, control deficiencies, or material weaknesses.
The following schedules summarize the data presented in the Association’s audit report. If you would like to receive the complete report, you may request a copy from Paula Davidson, director of finance and administration.
Statement of Financial Position
The Statement of Financial Position is a comparison of the assets, and the liabilities and net assets, of the total of all Association funds as of fiscal years ending September 30, 2008 and 2009. The largest segment of the Association’s assets continues to be its investment portfolio. The portfolio is composed of three invested funds--the permanent investment, restricted endowment, and cash management funds. The portfolio accounted for 74 percent of Association assets as of September 30, 2009.
The permanent investment fund is the largest fund within the investment portfolio; the fund is invested in a variety of managed equities and fixed income instruments. The restricted endowment fund (consisting of certain endowed funds such as the Scholarship Fund, the AALL/Thomson West--George A. Strait Minority Scholarship Endowment, the LexisNexis/John R. Johnson Memorial Scholarship Endowment, Institute for Courts Management Fund, Alan Holoch Memorial Fund, FCIL Schaffer Grant for Foreign Law Librarians, and the AALL/LexisNexis Research Fund) is similarly invested in a variety of equities and fixed income instruments. Finally, the cash management fund serves as a short-term reserve for investing cash available from operations.
The investment management company Chevy Chase Trust continues to manage the Association’s portfolio. In February, the Finance and Budget Committee also met with the investment manager from Chevy Chase responsible for the Association’s account. At that time, the committee reviewed the performance of the portfolio to ensure continued compliance with Association investment policy goals. Association funds continue to be invested according to a strong asset allocation model. While market conditions at the beginning of the fiscal year had an impact on the portfolio, conditions improved during the year, and the overall value of Association investments increased from the September 30, 2008, value. Although the value of investment assets increased during the fiscal year, the Association finished the year with an overall lower total asset value compared to the previous fiscal year total.
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Statement of Activities--All Funds
The Statement of Activities--All Funds compares the various revenue and expense accounts for all funds for the 2008 and 2009 fiscal years. In 2009, the Association continued to generate revenue; however, the generated revenue was not as high as the previous year. Total revenue decreased 7 percent from the previous year. Income from member dues and the Annual Meeting were significant portions of the revenue total. Of those two categories, membership dues increased slightly for the year while net revenue for the 2009 Annual Meeting was less than revenue generated from the previous meeting. Revenue from publications and royalties also decreased--approximately 11 percent.
Association expenses for fiscal year 2009 increased compared with the prior fiscal year; the total expenses increased a modest 3 percent. While the overall expenses for the Annual Meeting increased, the expenses associated with publications (e.g., Index to Foreign Legal Periodicals, Law LibraryJournal), the Government Relations Office, and scholarships and grants decreased.
In total, the Association reported a decrease in net assets from all funds and activities of 6.7 percent for fiscal year 2009.
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Statement of Activities--General Fund
The Statement of Activities--General Fund itemizes the fiscal year statement for the general fund only. For the year, the Association had a decrease in net assets. As mentioned previously, the Association had increases in membership dues and investment income; however, it had corresponding decreases in Annual Meeting, publications, and royalties income, and other sales.
Following is an analysis of some specific items from the General Fund.
Dues revenues were reported at $1,004,948, an increase of $14,268 over the previous year. Overall, membership dues accounted for over 30 percent of total Association revenues; this percentage is somewhat higher than in previous fiscal years.
The Index to Foreign LegalPeriodicals continued to generate significant revenues for the Association. The total revenue for fiscal year 2009 was $434,650, compared to $461,932 for the previous year. A large component to the total income was from royalty revenue. Overall, the increase in net assets for the publication was $185,457, compared to $170,259 for the previous year.
The Annual Meeting was the largest revenue-generating activity for the Association. The Washington, D.C., Meeting generated $1.3 million in revenue compared to $1.5 million for the Portland Meeting; however, overall expenses for the 2009 meeting were higher than in 2008. In total, 96 exhibitors purchased 180 exhibit spaces, a decrease from 113 and 215, respectively, from the 2008 Annual Meeting. The total number of attendees for the meeting was 1,657, which fell short of the expected number of 1,800. The net margin for the D.C. meeting after costs and overhead was 2.02 percent, compared to 26.23 percent for the Portland meeting.
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Comparative Fund Balances
The Comparative Fund Balances provides detail for the restricted and unrestricted net assets referenced in Schedule A.
The various funds and programs itemized on the schedule were established by the Executive Board to ensure available funding to support the Association’s commitment to its strategic directions: leadership, education, and advocacy. Moreover, the funds also ensure that restricted endowment contributions are accounted for and restricted to their intended purposes.
The combined balance for these funds at the end of fiscal year 2008 was $4,512,423. At the end of fiscal year 2009 the combined balance was $4,207,816, a decrease of 6.7 percent.
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For a copy of the AALL Audit Report or Current Budget, please contact:
Paula Davidson
Director of Finance and Administration
AALL
105 W. Adams Street, Suite 3300
Chicago, IL 60603
phone: 312/939-4764
fax: 312/431-1097