Proposed fiscal year 2019 (FY19) combined budget
Scott P. Stringer, MD AAO-HNS/F Secretary-Treasurer The Executive Committees of the Boards of Directors (BODs) were presented with the Finance and Investment Subcommittee (FISC) proposed budget for the next fiscal year, July 1, 2018-June 30, 2019 (FY19), and endorsed it for approval by the BODs.
Scott P. Stringer, MD
The Executive Committees of the Boards of Directors (BODs) were presented with the Finance and Investment Subcommittee (FISC) proposed budget for the next fiscal year, July 1, 2018-June 30, 2019 (FY19), and endorsed it for approval by the BODs. During the April meeting, the BODs reviewed and conditionally approved the FY19 budget that is presented here to the membership.
Budgeting for FY19 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 FY19 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 FY18 budget year. Based on this information, it is projected that the FY18 actual results will be within budget.
Highlights of the FY19 budget
The FY19 balanced budget is proposed at $18.028M, approximately equal to the FY18 budget of $18.794M. Member dues continue to account for almost 40 percent of the revenue budget while the Annual Meeting & OTO Experience account for another 35 percent. Product and Program sales, mainly sales of education products and royalties from publishers of the Otolaryngology–Head and Neck Surgery journal, the Bulletin, and our Academy Advantage partners, make up 20 percent of budgeted revenue. The remaining 5 percent of FY19 revenue is budgeted to come from corporate support of the Annual Meeting, donations to the Annual Fund, use of donor-restricted gifts, and use of reserves for two designated purposes.
The Board approved that $440K of reserves be designated for use in the FY19 budget for two specific purposes. First, to cover any shortfall in contracted technology costs for Reg-entSM that are not covered by participant fees. This shortfall is budgeted to be $240K in FY19. Second, for development costs of a new patient information website, ENThealth.org, budgeted to be $200K in FY19.
Significant changes in the FY19 budgeted revenue compared to FY18 include: lower Annual Meeting registrants, based on an average of prior year meetings; lower Home Study Course and other education product sales, based on projected FY18 actual sales; and transformation of patient information content and distribution services. Corporate sponsorships are budgeted slightly lower than in FY18 but offset by an increase in Other Revenue associated with Annual Meeting events, such as the popular Lunch with the Experts series.
The downward pressure on revenues is balanced by controlling the growth of expenses.
In December 2017, approximately half of the outstanding debt used to purchase the headquarters office building was paid off using accumulated net asset reserves. This reduced annual debt service by approximately $500K per year, allowing inflationary expense increases to be absorbed without a reduction in member services.
Meeting Facilities and Banquet Costs for the Annual Meeting in Atlanta, GA, are budgeted 25 percent less than budgeted for Chicago, IL, based on pricing differences between the venues and the lower budgeted attendance. Delivering the world’s best otolaryngology education program continues to be a priority in the allocation of budget resources.
The FY19 budget for grants is comparable to FY18, except for certain donor-restricted grants that are on an every-other-year disbursement schedule.
Contingencies are budgeted in the same amounts and for the same purposes as in FY18—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, Financial Operations at firstname.lastname@example.org.