The Association's fiscal year ended on September 30, 2008. Thereafter, the independent audit firm of Legacy Professionals LLP examined the Association's financial records.
The Executive Board retained Legacy Professionals LLP to certify the accuracy of the Association's financial statements and the integrity of its accounting systems. 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, Legacy Professionals LLP 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, 2008 and 2007, 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."
At the February 2009 meeting of the Association's Finance and Budget Committee, the Legacy Professionals LLP partner and senior manager responsible for the audit presented the audit report along with comments regarding the overall financial condition of the Association. During that time, committee members were given an opportunity to ask questions regarding the statements, methods, records, or procedures employed by the financial staff.
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, liabilities, and net assets of the total of all Association funds as of fiscal years ending September 30, 2007 and 2008. The largest segment of AALL's assets continues to be the Association's investment portfolio. The portfolio is composed of three invested funds�the permanent investment, restricted endowment, and cash management funds. The portfolio accounted for 65 percent of AALL's assets as of September 30, 2008.
The permanent investment fund is the largest fund within the 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/ThomsonWest�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 continues to serve as a short-term reserve for investing cash available from operations.
The Association's portfolio is professionally managed by Chevy Chase Trust Company. In February, the Finance and Budget Committee 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; however, market conditions toward the end of the Association's fiscal year had an impact on the portfolio. Thus, the investment funds decreased 8.9 percent from the September 30, 2007, value. While the value of investment assets decreased in value compared to the previous fiscal year, the total assets increased 9 percent and the Association finished the year with a positive change in total asset value.
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Statements of Activities - All Funds
The Statement of Activities-All Funds compares the various revenue and expense accounts for the 2007 and 2008 fiscal years. For 2008, the Association generated strong revenues. As in years past, a significant increase was a result of revenue from publications and royalties. Moreover, revenue from member dues continued to increase. Most important, the 2008 Portland Annual Meeting generated considerable revenue for the Association. The total Annual Meeting revenue increased 11.8 percent over the total for the 2007 meeting. The net return for the Annual Meeting after direct costs was $402,676.
Association expenses for fiscal year 2008 also remained comparable with the prior fiscal year. The overall expenses for the Annual Meeting increased, as did expenses for scholarships/grants activities; however, expenses associated with publications and government affairs decreased.
In total, the Association reported an increase in net assets from all funds and activities of $88,743 for fiscal year 2008.
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Statements of Activities - General Fund
The Statement of Activities-General Fund reports the fiscal year results of the general fund only. The increase in net assets for fiscal year 2008 was $351,982 compared to $135,149 for the previous year. Consistent with previous years, the Association saw significant increases in revenue from membership dues and the Index to Foreign Legal Periodicals. The Association also saw increases in revenue from the Annual Meeting and professional development.
Following is an analysis of some specific items from the General Fund.
Dues revenues were reported at $990,680, an increase of $49,638 over the previous year. The Association saw an increase in the number of dues-paying members. Moreover, as with years past, the Association had a healthy member retention rate compared to other similar organizations. Overall, membership dues accounted for over 27 percent of total association revenues; the amount is similar to previous fiscal years.
As previously noted, the Index to Foreign Legal Periodicals also generated significant revenues for the Association. A large component to the increase was from royalty revenue; the total revenue for fiscal year 2008 was $461,932, compared to $439,315 for the previous year�a 5.1 percent increase. Overall, the increase in net assets for the publication was $170,260, compared to $137,296 for the previous year.
The Annual Meeting continued to be the largest revenue generating activity for the Association. The Portland Annual Meeting generated greater revenue compared to the previous Annual Meeting in New Orleans. Moreover, overall expenses for the 2008 meeting were lower than in 2007. In total, 113 exhibitors purchased 215 exhibit spaces, an increase from 97 and 193, respectively, for the 2007 Annual Meeting. The total number of attendees for the meeting was 1,953, which far exceeded the expected number of 1,600. Indeed, the number of attendees was the largest since the 2004 Annual Meeting in Boston. The net percentage return on the Annual Meeting after taking into account direct and indirect costs was just over 26 percent, compared with 14 percent for the previous Annual 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 balance of the Current Reserve Fund at the end of fiscal year 2007 was $458,235. At the end of fiscal year 2008 the balance of the Current Reserve Fund was $429,203. During its February meeting, the Finance and Budget Committee discussed opportunities available to fund leadership, education, and advocacy programs during 2009, and also financing request for fiscal year 2010. Taking note of the current world economic situation, the committee also discussed various economic projections. The committee presented its recommendations to the Executive Board for approval at the Board's April meeting.
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For a copy of the AALL Audit Report or Current Budget, please contact:
Director of Finance and Administration
105 W. Adams Street, Suite 3300
Chicago, IL 60603
phone: (312) 939-4764