REPORT OF BOARD OF TRUSTEES
BOT Report 3-A-07
Subject: 2005 Audit of Financial Statements and 2006 and 2007 Operating Budgets
Presented by: C. Bruce Malone, MD, Chair
2005 Audit of Financial Statements
The audit of 2005 financial statements was presented to the Board of Trustees at its Oct. 28, 2006, 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, Leigh Schaefers, audit manager, and Mike Blue, Austin office managing partner, Ernst & Young, met with the board in executive session after the presentation. Copies of the audit report are available in the association's offices for review by any member.
2006 Operating Budget
For 2006, income was $19,507,505 and expense was $18,828,996. At year-end, total actual operating income for the year was above budget by $201,485 (1.0 percent). Total actual expenses were below budget by $413,664 (2.2 percent), resulting in actual net operating income of $678,509. This was greater than the budgeted net operating expense by $615,149. An unaudited report on 2006 operations is attached.
The audit of 2006 financial statements by Holtzman, Moellenberg, Panozzo & Perkins 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 May 2008.
2007 Operating Budget
In October 2006, the Board of Trustees approved a 2007 Operating Budget projecting income of $19,871,990, expenses of $19,841,990, and a 2007 Capital Expenditure budget of $490,700. The Operating Budget will be presented to the house by board chair C. Bruce Malone, MD. The board also approved direct and indirect support of related organizations in 2007 as follows: TEXPAC request for support totaling $307,070, TMA Alliance request for support totaling $318,320, and TMA Foundation request for support totaling $149,000.
The 2007 expense budget of $19,841,990 represents an increase of $599,330 from the final 2006 expense budget. In support of the expense budget, an income budget of $19,871,990 is projected. This represents an increase of 2.9 percent from the final 2006 income budget of $19,306,020. Consequently, the 2007 budget projects a surplus of $30,000.
During the 2007 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 2007 Operating Budget adopted by the board is attached.
TMA House of Delegates: TexMed 2007