PAEA Financial Update ― in Broad Black Strokes

Charles Brakhage, MPAS, PA-C
Secretary/Treasurer

Wow! Has another year gone by? It seems time flies faster and faster, the younger we get. Well, to more serious matters.

The PAEA Finance Committee met in February to set the fiscal 2009 budget. While we missed Matt Baker, whose term had expired, we were glad to welcome Daniel O’Donoghue from the University of Oklahoma. For two days we hammered out the framework and then filled in most of the details to create a fiscally sound product for the Association.

This past year, because of the strong position of PAEA’s operating fund, we were able to begin to implement the strategic plan. An assistant director for research, Mei Liang, joined the PAEA staff, and we signed a contract for a content management system that will greatly improve the Association’s Web site and its ability to communicate with membership. We were also able to purchase a survey software package to significantly enhance the Association’s data collection and research endeavors.

The Association has continued to operate in the black and enjoyed modest increases in its operating reserves this year. The representative of PAEA’s accounting firm who attended our meeting indicated that we are in a strong overall position at this point. The committee also received a report from the Association’s investment analyst on PAEA's research endowment and operating funds. The operating fund is slightly below the 45 percent fixed income investment and above 5 percent cash-on-hand projections. The research endowment fund is right on target: 5 percent cash, 50 percent fixed income, and 45 percent equity. Although the markets overall have seen periods of increased volatility during the year, we have realized modest gains in both funds. The operating fund gained 5.57 percent, and the research fund rose 1.11 percent ― as compared to the Standard and Poor 500 increase of 5.49 percent and an increase in U.S. Treasury bills by 5.14 percent. The Association improved its position in all funds this year from interest and dividends by more than $50,000. That said, I believe that except for a loss in the high yield stock fund, we have maintained a very strong position this year.

CASPA has exceeded projections and continued its upward trend. It is the staple of our revenue. Applications have increased by 14 percent and revenue by more than 10 percent over last year. It appears that unless a major, unforeseen event occurs in the job market, the strong numbers in the pipeline will continue over the next few years. However, while CASPA is performing very well, it remains an exceptionally large portion of PAEA’s annual revenue. Therefore, we must continue to maintain a conservative position to safeguard for years of downturn in this major revenue source. The Finance Committee, at the recommendation of the CASPA Advisory Committee, requested that the board approve a $10 increase in CASPA fees. Consistent with increases in prior years, the committee is also recommending a modest increase of 3 percent over last year in member dues.

Although the final figures are not yet available, we expect that PAEA publications will also do well this year. It appears that the online PA Programs Directory will match last year's sales, while the recertification booklet will produce an increase of approximately 20 percent. PACKRAT is likely to perform as well as if not better than last year. The workshops and the Annual Education Forum, which have been well attended, continue overall to be revenue-neutral. At the end of the day, both total revenue and expenses are expected to increase this year.

The Finance Committee has again developed a balanced budget, though one painted in broad stokes, to be completed when the remaining figures come in. At that time, the committee will present it to the board for approval. The Association continues to maintain a strong position and good health. I look forward to seeing some of you in San Antonio and the rest of you on the ghost tours in Savannah in the fall.