2006 Treasurer’s Annual Report
My job as your treasurer is to oversee a financial operations team that consists of the NGAUS Committee on Finance, the Special Building Committee as well as the association’s full-time financial department.
This team helps me to ensure we adequately balance operating expenses with incoming revenue while providing you, our members, with the best bang for your buck. I can assure you that your membership dollars have been well spent during my two terms as treasurer. Our team not only effectively manages the budget but it also safeguards assets and exercises internal controls and processes to ensure that our fidudary responsibilities to you are met.
I hope this brief financial overview reassures you that NGAUS and its affiliates continue to have responsible fiscal guidance and management. Should you desire a more detailed look at the NGAUS financial position, I invite you look at the financial statements on the “Member’s Only” section of the NGAUS Web site at www.ngaus.org.
2005 Financial Report
At the close of every year, the association’s financial records and statements undergo a strenuous, multilayered audit and review. The independent accounting firm of Argy, Wiltse and Robinson of McLean, Va., conducted the audit. The NGAUS Committee on Audit, chaired by Lt. Col. Darrell Loyd of Kansas, reviewed the 2005 audited financial statements and recommended their approval to the board of directors, which accepted and approved the audit. Below is a synopsis of the 2005 audited financial statements.
Consolidated Operations
As NGAUS treasurer, 1 not only oversee the financial affairs of the association, which includes the operation of The National Guard Memorial building, I also oversee financial affairs for NGAUS affiliates: the National Guard Educational Foundation (NGEF) and NGAUS Insurance Trust (NGAUS-IT).
Each entity has its own identity, operating budget and governing board. However, for financial reporting purposes and because of the relationship NGAUS shares with these entities, the operations are incorporated into one set of financial statements, which are referred to as “consolidated operations.”
The 2005 audited financial statements reflect a collective boost in revenue of $105,731 over 2004. This increase is mainly attributable to higher experience rating refunds, contributions, and building (e.g., tenant lease payments) and magazine advertising revenue. Although overall revenue increased, annual membership dues, investment earnings, conference booth sales and affinity/insurance royalties decreased.
Consolidated operating expenses increased $314,303 over 2004. Significant contributors to this increase included the funding of all staff positions, Web site redesign, special contributions to hurricane relief funds, investment fees, NGEF general operating and museum-related expenses, state affinity payouts, overdue computer modernization, the legislative action plan, magazine production and travel expenses.
NGAUS
The “Statement of Activities” on page 96 reflects the 2005 NGAUS audited financial data, inclusive of building operations. It shows a $3.15 million change in net assets, otherwise known as a net gain. The association’s 2005 revenue totaled $12.48 million, an increase of $101,000 over 2004. Significant revenue changes in 2005 included increased building, magazine advertising, corporate associate and insurance revenue netted against decreased annual membership dues, exhibit booth sales and overall investment earnings.
Association general operating expenses totaled $9.33 million in 2005, an increase of $341,000 when compared to 2004. Increased expenses were realized in Web site redesign, hurricane relief fund contributions, investment fees, magazine production, travel and salaries.
The NGAUS 2005 “Statement of Financial Position” on page 96, otherwise known as a balance sheet, reflects total assets and/or liabilities and net assets (equity) of $40.35 million-the worth of our building after depreciation represents a little more than half of this total.
Revenue and expenses from The National Guard Memorial building are included in the association’s figures above. The board of directors reappointed the Special Building Committee to work with the finance committee to keep the NGAUS leadership advised of building issues and to recommend ways to ensure its continued optimal performance as the foundation of NGAUS fiscal viability. A key facet of its job is ensuring building operations are funded only with building revenues.
Brig. Gen. Herman “Butch” Kervin of South Carolina, building committee chairman, reported at the July board meeting that the building and the land it occupies on Capitol Hill have a book value of $31.9 million, before depreciation, as reflected in the 2005 annual audit.
“When the market value for the building is calculated,” he said in his report, “the worth of the building escalates substantially to close to $58 million. With such a valuable asset, NGAUS is well positioned on its asset side to weather economic turbulence in the foreseeable future. As our real estate management experts from Donohoe (a private Washington, D.C. property-management firm that handles the building’s day-to-day management) will confirm, the building is performing as well as can be expected, and the prospects for continued solid performance in the D.C. market are very good.”