Proposed fiscal year 2018 combined budget
Budgeting for FY18 represents the collaborative work of both the staff leadership and the members of the FISC to develop a balanced combined AAO-HNS/F budget.
Scott P. Stringer, MD, AAO-HNS/F Secretary-Treasurer
The Executive Committees (ECs) of the Boards of Directors (BODs) were presented with the Finance and Investment Subcommittee (FISC) proposed budget for the next fiscal year, July 1, 2017-June 30, 2018 (FY18). They endorsed it for approval by the BODs. During their May meeting, the BODs reviewed and conditionally approved the FY18 budget, which is presented here to membership.
Budgeting for FY18 represents the collaborative work of both the staff leadership and the members of the FISC to develop a balanced combined AAO-HNS/F budget. The debt covenants of AAO-HNS/F require a balanced budget whereby total revenue is sufficient to meet all operating expenses plus the next year’s debt service principal payment. The proposed FY18 budget is structured to meet these compliance requirements, and the strategic plan goals of the AAO-HNS/F 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 FY17 budget year. Based on this information, it is projected that the FY17 actual results will be within budget.
Highlights of the FY18 budget
The FY18 balanced budget is proposed at $19.13M, approximately equal to the FY17 budget of $19.15M. Nearly 75 percent of FY18 revenue, $13.8M, is budgeted to come from two major areas: membership dues and Annual Meeting revenue. Annual Meeting registration is budgeted based on the actual number of attendees at the prior year’s meeting in San Diego, which were fewer than had been budgeted. Making up most of the remaining 25 percent of the revenue budget is income from education product sales and royalties, mainly from publications. Increased educational offerings available for purchase through AcademyU® and price bundling of AcademyU access and recorded Annual Meeting sessions account for the increase in product and program sales revenue.
Development of Reg-ent℠, the ENT clinical data registry, continues to be a strategic priority. Now in its third year of development, participant fees will begin as scheduled to offset costs such that the FY18 budgeted investment from reserves is $273K, or half as much as in FY17. The BODs previously approved up to $3M of reserves for Reg-ent start-up costs of which approximately half has been or will be used by the end of FY17.
The expenses for the AAO-HNS/F are separated into two areas.
Direct Operating Expenses include costs directly related to carrying out the priorities of the strategic plan and ongoing mission- related programs. These are within 10 percent of the prior year budget, the biggest difference being the reduced cost for data registry support.
Allocated Costs relate 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 expense, and organizational-wide HR, Financial Services, and IT costs. In total, these costs are budgeted approximately four percent higher than the prior year with no significant changes in operations or staffing.
The complete budget is available to any Academy member who requests it in writing. Email requests to Carrie Hanlon, CPA, senior director, Financial Operations to firstname.lastname@example.org.