PRSA’s independent auditor, PKF, recently completed its review of PRSA’s 2012 financial statements and issued a highly desirable “unqualified opinion” on the Society’s finances. This means that, in PFK’s opinion, the financial statements “present fairly, in all material respects, the financial position of [the organization],” and are prepared “in accordance with accounting principles generally accepted in the United States.”
At its quarterly meeting April 25-26 in Washington, D.C., the PRSA Board of Directors voted to accept the results of the audit, officially closing the books on 2012.
PKF’s independent review confirmed what those of us close to the Society’s finances have known all along: that PRSA’s approach to financial management is serving its Members well and playing a key role in supporting the work of the Society.
In 2012, PRSA exceeded its annual financial goal — to increase its unrestricted net assets by a minimum of 1 percent of annual expenses — by achieving net earnings equivalent to 5.7 percent of its annual expenses. This was primarily due to a number of factors, including positive investment returns, Membership income and tight costs controls.
The stock market’s 2012 performance added gains of approximately $233,000, or 10.3 percent, to PRSA’s investment portfolio. In addition, dues income was up 10 percent in 2012, driven in part by the implementation of PRSA’s first dues increase in a decade.
Cost savings and operational efficiencies also contributed to PRSA’s positive financial results. An ongoing program of belt-tightening, in response to the continued economic softness of recent years, has given PRSA the flexibility to control variable expenses in response to changes in budgeted revenue.
In addition, by trimming costs to offset anticipated reductions in revenue, PRSA is able to yield better-than-budgeted net results. PRSA’s increased use of social media and other electronic forms of communications also provided significant savings, primarily in the areas of printing, postage and supplies. As technology continues to evolve and provides ever more cost-effective means of communication, PRSA expects to realize further financial benefits.
On a less-positive note, revenue from Section conferences and event registrations was lower in 2012 versus 2011. PRSA also saw a 31 percent decline in professional training income, stemming from a decision to provide professional training webinars to Members at no additional cost beginning in 2012. In addition, the overall cost to deliver Member benefits increased, by 14 percent over 2011.
All in all, PRSA takes great care to maintain the tight fiscal controls that will ensure the organization’s viability for years to come. Budgets are tracked and reasonably adjusted, as necessary, in response to economic trends and unforeseen circumstances. In addition, PRSA is making steady progress toward its ultimate financial goal, which is to hold 50 percent of its annual operating budget in unrestricted net assets — a financial best practice for associations.
Positive financial results, like those in 2012, will allow the PRSA Board to consider new investments in PRSA products and services, a process that is already underway.
I encourage all PRSA members to review our audited financial statements as of December 31, 2012 — which are available in the MyPRSA section of the website — and to contact me with any questions or concerns that you may have.
Blake D. Lewis III, APR, Fellow PRSA, is 2013 PRSA Treasurer.