Conservative Investments and Healthy Applicant Pool Put PAEA in Strong Financial Position

By Kevin Lohenry, MPAS, PA-C
Secretary/Treasurer

The PAEA Finance Committee had the ironic fortune of meeting in Washington, D.C., this past February to discuss the budget for FY 2010 at the same time that President Obama was traveling the country to gain support for his $800 billion stimulus package. This crisis provided us with an interesting perspective, but I am very pleased to report to you that the Association has been appropriately conservative with its investments and is in a relatively stronger position than the nation. We have also had the good fortune to see double-digit growth annually in the CASPA applicant pool. While PAEA has not entirely escaped the impact of the national crisis, our conservative philosophy coupled with record growth in the applicant pool has left us in a good position to continue to grow the Association, despite these difficult times.

After meeting with our accounting firm, it was clear that the Association is in a strong position financially, with healthy reserves — information that led the Finance Committee to recommend a dues freeze for the upcoming fiscal year. In February PAEA conducted a conference call in which we briefly surveyed a sample of the deans who oversee PA programs around the country, and we learned that many of our member programs have been asked to make slight reductions in their budgets for next year. The board of directors concurred with the Finance Committee’s recommendation and the dues freeze will be instituted for the 2010 fiscal year, which begins July 1, 2009.

The Finance Committee also met for the first time with our new investment management firm. In 2008, the committee completed a substantial review of our investment policies and subsequently issued a request for proposals for firms that would manage our investments. The new investment firm — and the policy they developed for us — were recently approved by the board. The policy will allow the Association to maintain sufficient cash reserves to cover its expenses while maximizing its investment potential in both a short- and long-term growth plan. The policy also provides the Association with increased Federal Deposit Insurance Corporation (FDIC) protection by spreading cash over a number of checking accounts. This move ultimately protects us in the case of bank failure, which now looms for every investor as an imminent possibility rather than the rare occurrence it might have been in years past.

Finally, the committee agreed that our financial position supports the PAEA board's decision to invest in the area of advocacy for the PA profession, specifically for health education. The members of the board felt that the current transition to a new administration may provide our profession with its best opportunity in more than a decade to affect the administration's focus on health and health education, so made the decision to hire a dedicated lobbyist for the Association. The board also approved two other staff positions, as part of our own "stimulus package."