REPORT OF BOARD OF TRUSTEES
BOT Report 2-A-06
Subject: 2004 Audit of Financial Statements and 2005 and 2006 Operating Budgets
Presented by: William W. Hinchey, MD, Chair
2004 Audit of Financial Statements
The audit of 2004 financial statements was presented to the Board of Trustees at its Sept. 16, 2005, meeting. The independent auditor Ernst & Young, LLP, determined that the consolidated financial statements "present fairly, in all material respects, the consolidated financial position of Texas Medical Association and Texas Medical Association Board Administered Organizations . . . in conformity with accounting principles generally accepted in the United States." Following the board's usual and customary protocol for receiving the audit report, Darin McNelis of Ernst & Young met with the board in executive session after his presentation. Copies of the audit report are available in the association's offices for review by any member.
2005 Operating Budget
For 2005, income was projected to be $18,857,120 and expense was budgeted at $19,008,890. At year-end, total actual operating income for the year was above budget by $130,412 (0.7 percent). Total actual expenses were above budget by $205,248 (1.1 percent), resulting in actual net operating expense of $226,606. This was greater than the budgeted net operating expense by $74,836. An unaudited report on 2005 operations is attached .
The audit of 2005 financial statements by Ernst & Young, LLP, will be completed and presented to the Board of Trustees at the board's summer meeting. The board will present the audit reports to the House of Delegates in April 2007.
2006 Operating Budget
In November 2005, the Board of Trustees approved a 2006 Operating Budget projecting income of $19,251,020, expenses of $19,001,020, and a 2005 Capital Expenditure budget of $348,550. The Operating Budget will be presented to the house by board chair William W. Hinchey, MD. The board also approved direct and indirect support of related organizations in 2006 as follows: TEXPAC request for support totaling $299,150, TMA Alliance request for support totaling $311,040, and TMA Foundation request for support totaling $170,000.
The 2006 expense budget of $19,001,020 represents a decrease of $7,870 from the final 2005 expense budget. In support of the expense budget, an income budget of $19,251,020 is projected. This represents an increase of 2.1 percent from the final 2005 income budget of $18,857,120. Consequently, the 2006 budget projects a surplus of $250,000.
During the 2006 budgeting process, a review of all programmatic activities was conducted. In this review, TMA's relevance and value to its members was used as the benchmark for the evaluation of all programs to determine the areas that should be expanded or reduced. Containing expenses for approved programs becomes more difficult each year. Thus, either programmatic growth must be restrained or new sources of income must be identified. The 2006 Operating Budget adopted by the board is attached .
TMA House of Delegates: TexMed 2006