Proposed 2012-2013 Combined Budget
By John W. House, MD, Secretary-Treasurer At the beginning of 2012, your AAO-HNS/F staff and the Finance and Investment Subcommittee (FISC) began working to establish the budget for fiscal year July 1, 2012 through June 30, 2013 (FY13). Budget guidance for FY13 stemmed from the Boards of Directors mandate for a balanced budget and the alignment of strategic issues identified during the strategic planning sessions in December 2011. In February, the FISC reviewed results for the first six months of the FY12 budget year and we were pleased to see that AAO-HNS/F was in good financial condition, due in part because of a successful 2011 Annual Meeting in San Francisco. In addition, the staff, under the leadership of David R. Nielsen, MD, has managed to keep expenses down. The budget planning for FY13 began with this success as a basis. The budget planning process involves each of the business units of AAO-HNS/F submitting their budget to the financial team, who works with them to assure that the expenses are in line with the mission of AAO-HNS/F. The financial team is composed of Brenda Hargett, chief operating and financial officer (COO); Lynn Frischkorn, director of budgeting and special projects; and Carrie Hanlon, senior director of Financial Operations. The financial team presented the proposed budget to the FISC for an initial review in early March and then a final proposed budget in late March. Once reviewed and approved by FISC, the proposed FY13 budget was presented to the Executive Committees (EC) of the Boards of Directors (BOD) recommending their endorsement for approval by the BOD. The EC endorsed the FY13 proposed budget during their April meeting. In May, the BOD reviewed and conditionally approved the FY13 budget that is presented here for our membership. It has been my pleasure to be on the Boards of Directors since 2005 and secretary-treasurer since 2008. I have been a member of FISC since first joining the Board and have served as chairman since being elected secretary-treasurer. During my tenure, the budget has gone from a deficit to a balanced budget. During these past few years there have been changes in the executive staff that have greatly improved the efficiency of operations. The members of AAO-HNS should be proud of the staff and all of the hard work it does on our behalf. Brenda Hargett has been the COO for the past two years. She comes from a financial background and retains an active CPA license. She brings a wealth of experience and organizational skills. She has assembled an outstanding team that has made my job much easier. With the able assistance of Lynn Frischkorn, they have spent countless hours working on the budget and being sure that it is clearly presented to the BOD. Carrie Hanlon, also a CPA, ensures that the financial results are accurate and easy for us to understand. I would like to take this opportunity to thank everyone for a job well done. Highlights of the FY13 Budget The budget has been prepared on a cash basis. This basis is important to reflect the ability for an organization to meet its true financial obligations, regardless of whether the cash outlay is a true “expense” or merely balance sheet accounting. The FY13 budget prioritizes the direction of the Board and is based on conservative estimates of both revenues and expenses. The budget for FY13 is $19.75M, which is an increase of more than $620K (3.2%) from FY12 budget of $19.13M. Nearly 70 percent of FY13 revenue, $13.75 million, is budgeted to come from two major areas: membership dues and annual meeting revenue. Another major area of revenue is product and program sales, budgeted at $1.5 million, of which nearly 78 percent is expected to come from CME Program Fees related to the Home Study course. Royalties continue to be a significant source of revenue. The expenses for the AAO-HNS/F are separated into two areas. The first area includes direct operating costs relating to each business unit; these are costs directly related to day-to-day activities. The second area, allocated costs, relates to staffing and benefits as well as the operating costs that are incurred for the good of the whole organization, such as occupancy and building-related expenses, and organizational-wide HR, Financial, and IT costs. The complete budget is available to any Academy member who requests it in writing. Email requests to Brenda S. Hargett, CPA, CAE, COO, to exhibits@heart.org.
By John W. House, MD, Secretary-Treasurer
The budget planning process involves each of the business units of AAO-HNS/F submitting their budget to the financial team, who works with them to assure that the expenses are in line with the mission of AAO-HNS/F. The financial team is composed of Brenda Hargett, chief operating and financial officer (COO); Lynn Frischkorn, director of budgeting and special projects; and Carrie Hanlon, senior director of Financial Operations.
The financial team presented the proposed budget to the FISC for an initial review in early March and then a final proposed budget in late March. Once reviewed and approved by FISC, the proposed FY13 budget was presented to the Executive Committees (EC) of the Boards of Directors (BOD) recommending their endorsement for approval by the BOD. The EC endorsed the FY13 proposed budget during their April meeting. In May, the BOD reviewed and conditionally approved the FY13 budget that is presented here for our membership.
It has been my pleasure to be on the Boards of Directors since 2005 and secretary-treasurer since 2008. I have been a member of FISC since first joining the Board and have served as chairman since being elected secretary-treasurer. During my tenure, the budget has gone from a deficit to a balanced budget. During these past few years there have been changes in the executive staff that have greatly improved the efficiency of operations. The members of AAO-HNS should be proud of the staff and all of the hard work it does on our behalf. Brenda Hargett has been the COO for the past two years. She comes from a financial background and retains an active CPA license. She brings a wealth of experience and organizational skills. She has assembled an outstanding team that has made my job much easier. With the able assistance of Lynn Frischkorn, they have spent countless hours working on the budget and being sure that it is clearly presented to the BOD. Carrie Hanlon, also a CPA, ensures that the financial results are accurate and easy for us to understand. I would like to take this opportunity to thank everyone for a job well done.
Highlights of the FY13 Budget
The budget has been prepared on a cash basis. This basis is important to reflect the ability for an organization to meet its true financial obligations, regardless of whether the cash outlay is a true “expense” or merely balance sheet accounting. The FY13 budget prioritizes the direction of the Board and is based on conservative estimates of both revenues and expenses.
The budget for FY13 is $19.75M, which is an increase of more than $620K (3.2%) from FY12 budget of $19.13M. Nearly 70 percent of FY13 revenue, $13.75 million, is budgeted to come from two major areas: membership dues and annual meeting revenue. Another major area of revenue is product and program sales, budgeted at $1.5 million, of which nearly 78 percent is expected to come from CME Program Fees related to the Home Study course. Royalties continue to be a significant source of revenue. The expenses for the AAO-HNS/F are separated into two areas. The first area includes direct operating costs relating to each business unit; these are costs directly related to day-to-day activities. The second area, allocated costs, relates to staffing and benefits as well as the operating costs that are incurred for the good of the whole organization, such as occupancy and building-related expenses, and organizational-wide HR, Financial, and IT costs.
The complete budget is available to any Academy member who requests it in writing. Email requests to Brenda S. Hargett, CPA, CAE, COO, to exhibits@heart.org.