Treasurer’s Report
Maintaining Balance
It’s a balancing act to make good business and financial decisions for AIHA
while remembering that providing membership services is our primary duty.
However, another duty is to adapt our
association to the AIHA of future years.
We are financially strong by many
measures, but we still must be prudent
in how we allocate resources. Our 2012
operating budget is $14.6M. With a staff
of 50 full-time equivalents (FTEs) who
support hundreds of programs, our operating budget is pushed to its limits, but
the staff keep working very efficiently,
effectively and professionally. We operate with lower overhead expenses, and
our revenue generated per FTE is much
higher than comparable associations.
Because our revenue is driven chiefly
by AIHce and our Accreditation and
Proficiency Analytical Testing (PAT) programs, we can keep our dues at a very
low level and provide an extremely good
comparative value. Dues comprise only
11 percent of our revenue; on average,
similar associations rely on dues for approximately 24 percent of revenue. And
our new office space has reduced our
rent expenses dramatically while maintaining a professional setting that you
will be proud of.
Good Business Practice
Consistent with good business practice,
we are committed to keeping our invested reserves equal to 50 percent of
our operating budget. We have over
$12M “in the bank” with a 50/50 balance between long- and intermediate-term investments. You might ask, why
do we need reserves?
First, we need reserves to manage
natural swings in cash flow. In October,
for example, we have limited cash inflow
and large outflows related to AIHce,
which results in our lowest investment
balance of the year. February is our
highest investment balance because of
AIHce registrations and revenues from
our Accreditation, PAT and Registry programs. Our intermediate-term reserves
help us modulate those swings while our
long-term investments generate revenue.
Second, reserves allow us to make
good long-term strategic decisions. When
we are not worried about paying bills
and making payroll, we can carefully
evaluate everything we do and allocate
resources with AIHA’s long-term future
in mind. Success in business comes from
focusing on the things you are really
good at. Our Board of Directors has made
some very tough decisions over the past
two years that some members take issue
with. For example, the decision to pull
AIHA away from the WEEL and BEEL activities was not taken lightly. Ultimately
it was the right decision, and those programs have a new, bright future.
Third, with strong reserves we can
take advantage of unexpected opportu-
nities. For example, we can support good
ideas from members, such as the Value
Strategy program, with our “Invested Re-
serves above Target” (IRAT) policy. Our
2012 budget includes almost $400,000 in
IRAT funding for the second-year Asia
Pacific Conference, Registry program
development and PAT product develop-
ment. We have also approved proposals
to explore the Southeast Asia market for
possible expansion of our Laboratory
Accreditation program and investigate a
product stewardship membership group.
Positive Budget, Quality Services
Although we began the last two years
with slight deficit budgets, our reserves
allowed us to continue operations and
provide strong member services, and we
finished both years in the black. This
year we will operate (as we should) with
a slight positive delta. Because of our
senior management team’s attention to
the details of projected revenues and
expenses, we will be operating within
our means while maintaining quality
services for members.
Thanks to the financial stewardship
of Treasurers before me, including Mike
Brandt, Lindsay Booher, Dave Gioiello
and Allan Fleeger, our Board of Directors achieved the optimal balance of expenses and member services. And when
my term as Treasurer ends in June 2012,
the stewardship of our finances will be
in the very able hands of Steve Lacey,
our Treasurer-Elect.
It’s all about balance: without the
worry of fiscal issues, the Board can address the changing needs of current and
future members.
Harry Beaulieu, PhD, CIH, CSP, is president and
senior scientist at Industrial Hygiene Resources in
Boise, Idaho. He can be reached at harrybeaulieu@
industrialhygieneresources.com or (208) 323-8287.
