Proposed fiscal year 2020 (FY20) combined budget

June 2019 – Vol. 38, No. 5

Kenneth W. Altman, MD, PhD
AAO-HNS/F Secretary-Treasurer

AAO-HNS/F combined budgets

Approved Budget FY19 Proposed Budget FY20
Revenue
Membership Dues $6,925,000 $6,925,000
Annual Meeting Revenue 6,850,000 6,741,000
Education and Other Product Sales 1,714,000 1,858,000
Publication Revenue 1,260,000 1,208,000
Royalties – Academy Advantage and Others 457,000 548,000
Annual Fund 150,000 150,000
Other Revenue 44,000 45,000
Use of Donor Restricted Net Assets 188,000 258,000
Operating Revenue 17,588,000 17,733,000
Use of Board Designated Net Assets 440,000 1,700,000
Total Revenue $18,028,000 $19,433,000
Expenses
Salaries & Benefits $9,325,000 $9,125,000
Consultants & Professional Fees 2,278,000 2,283,000
Other Operating Expenses 2,396,000 2,231,000
Meeting Facilities & Banquet Costs 1,662,000 2,161,000
Occupancy 1,060,000 1,003,000
Grants 417,000 480,000
Contingencies 450,000 450,000
Subtotal 17,588,000 17,733,000
Board Designated Reserve Expenses 450,000 450,000
Total Expenses $18,028,000 $19,433,000 

The Executive Committees (ECs) of the AAO-HNS/F Boards of Directors (BODs) were presented with the Financial and Investment Subcommittee (FISC) proposed budget for the next fiscal year, July 1, 2019 – June 30, 2020 (FY20), and endorsed it for approval by the BODs. During their April meeting, the BODs reviewed and conditionally approved the FY20 budget that is presented here to the membership.

Budgeting for FY20 represents the collaborative work of both the staff leadership and the members of the FISC to match stable funding to the mission we aspire to accomplish. The proposed FY20 budget is structured to meet the strategic plan goals of the AAO-HNS/F and continue to provide member services in the most effective and efficient way possible.

In early spring, the FISC reviewed financial results for the first six months of the FY19 budget year. Based on this information, it is projected that the FY19 actual results will be within budget.

Highlights of the FY20 budget

The FY20 balanced budget is proposed at $19.4M, with $17.7M funded from operating revenues and $1.7M funded from Board-designated reserve funds. Approximately 80 percent of operating revenue comes from member dues (40 percent) and the Annual Meeting & OTO Experience (38 percent). No increase in member dues or Annual Meeting registration fees is proposed. The remaining 20 percent of operating revenue comes from education product sales, royalties from publishers of Otolaryngology–Head and Neck Surgery and the Bulletin, royalties from our Academy Advantage partners, and donor contributions to the Foundation’s Annual Fund and other donor contributions. Overall, operating revenues are budgeted approximately equal to the prior year budget.

The Board has designated reserves for use in the FY20 budget for two specific purposes. First, to invest in the continued development of technology for the specialty’s clinical data registry, Reg-entSM. While the Board has approved the use of reserves of up to $1.4M for this purpose, revenue generated from registry-related ventures may substantially reduce this amount. Second, the Board has approved the use of reserves for a redesign and update of the Academy’s main website, budgeted to be $300K.

Operating expenses are also budgeted consistent with the prior year in total. Meeting facilities and banquet costs are budgeted 30 percent more than the prior year due to the addition of new workshops and pricing differences between Annual Meeting sites. Delivering the world’s best otolaryngology education program continues to be a priority in the allocation of budget resources.

Contingencies are budgeted in the same amounts and for the same purposes as in FY19. That is, $250K to buffer any Annual Meeting net revenue shortfall and $200K for use at the discretion of the EVP/CEO.

The complete budget is available to any Academy member who requests it in writing. Email requests to Carrie Hanlon, CPA, Senior Director, Finance and Administration, at bulletin@entnet.org.