The Ohio Society of CPAs: financial report 2002-2003.

Summary of Financial Results

Fiscal 2003 was a year of crisis for the CPA profession, and The Ohio Society responded with a number of initiatives to restore confidence and rebuild trust. The Society's commitment to excellence in program and service delivery, and efforts to enhance internal operational efficiency, resulted in positive net revenue from operations of $116,000. Due to unfavorable market conditions, the Society incurred a net investment loss of $201,000, resulting in an $85,000 decrease in net assets for the year.

Total operating revenue for the year ended April 30, 2003 was $7,462,000. The Society's primary sources of revenue are membership dues, providing 50 percent of total revenue, and continuing professional education registrations, at 36 percent of total revenue. Total operating expenses were $7,346,000, with the most significant expense categories of continuing professional education, and public relations and publications, at 35 percent and 20 percent of total expense.

Public Relations & Publications

Public relations and publications expenses were the most significant growth area, as the Society launched Catalyst, a new magazine for members, and expanded advertising and public relations initiatives to help rebuild public trust in the profession and reach out to students.

CPE

Providing quality educational opportunities for members is a top priority, and The Ohio Society continued to increase the value of its continuing education offerings for members with new CPE seminars and conferences. Cost control measures in the continuing education program resulted in net program revenue of $97,000, exceeding the 2003 budget of $39,000, and net revenue from the 2002 fiscal year of $80,000.

The accompanying condensed financial statements are derived from the Society's audited financial statements, which received an unqualified opinion. A complete copy of those financial statements is available on The Ohio Society of CPAs Web site at www.ohioscpa.com, or by contacting CPAnswers at 888.959.1212.

Sections

Enrollments in the Society's special interest sections continue to increase, providing section dues revenue of $96,000 for fiscal 2003, an increase of $25,000 from the prior year.

2003-2004 Budget

The Society conducts a comprehensive budgeting process beginning in October that concludes with Board adoption in January. An increase in net assets of $105,000 is budgeted for 2003-2004. A contribution to net assets is budgeted to remain in compliance with the Society's fiscal policy requirements, and to provide liquidity for investments in operations.

Cash Management

Due to aggressive management of operating cash, the Society ended the year without having to draw upon its line of credit which is typically utilized to meet cash requirements during March and April.

Investing

This year the Society's Finance Committee conducted an extensive review of the Society's long-term investment policy and criteria for fund selection. Working with the Society's investment managers, the committee will be expanding the diversification of fund strategies available to the long-term investment portfolio. The Society's current long-term investment fund performance exceeded benchmarks for the year.

Comments

In a year providing significant challenges to our profession and The Ohio Society, financial initiatives focused on investments in new programs designed to restore confidence and rebuild trust in the profession, internal cost control, and preparing the Society for the future. Through continued comparative analysis of Society program costs and revenue sources, the Finance Committee will work with the Board, management and volunteers in strengthening the Society's financial position to meet the personal, professional and educational needs of members, and to continue the Society's commitment to excellence.

                                            April 30

Assets                                  2003         2002

Cash and Cash Equivalents              $177,000      $81,000
Accounts Receivable (net of
  allowance for doubtful accounts
  of $11,000 and $15,000
  respectively)                          62,000      144,000
Prepaid Expense, and Deposits           379,000      365,000
Investments                           2,431,000    2,731,000
Property (net of accumulated
  depreciation and amortization of
  $1,549,000 and $1,281,000
  respectively)                         939,000    1,037,000

Total Assets                         $3,988,000   $4,358,000

Liabilities and Net Assets

Liabilities
  Accounts Payable and Accrued
    Liabilities                        $365,000     $437,000
  Deferred Revenue                      554,000      456,000
  Short-Term Borrowings                       0      330,000
  Funds Held for Others                 472,000      482,000
  Loan Secured by Equipment              90,000            0
  Mortgage                              740,000      801,000

    Total Liabilities                 2,221,000    2,506,000

Net Assets
  Unrestricted                        1,629,000    1,708,000
  Temporarily Restricted                 14,000       20,000
  Permanently Restricted                124,000      124,000

    Total Net Assets                  1,767,000    1,852,000

Total Liabilities and Net Assets     $3,988,000   $4,358,000

                                       Years Ended April 30

Unrestricted Net Assets                  2003         2002

Revenue
  Dues                                $3,707,000   $3,672,000
  CPE Registrations                    2,694,000    2,657,000
  Peer Review Fees                       492,000      407,000
  Public Relations and Publications      295,000      239,000
  Membership Affinity Programs           138,000      153,000
  Other                                   82,000       77,000
  Educational Foundation
    Contributions                         54,000       51,000
  Investment Income (Loss), Net        (196,000)    (113,000)
  Scholarships Released from
    Restrictions                           1,000        1,000

Total Revenue                          7,267,000    7,144,000

Expenses
  CPE Program                          2,597,000    2,577,000
  Public Relations and Publications    1,475,000    1,256,000
  General and Administrative           1,090,000    1,075,000
  Governmental Affairs                   659,000      648,000
  Membership Services                    586,000      487,000
  Peer Review                            483,000      406,000
  Chapters and Sections                  379,000      479,000
  Interest                                51,000       73,000
  Income Tax                              19,000       17,000
  Educational Foundation
    Scholarships                           7,000        3,000

Total Expenses                         7,346,000    7,021,000

Increase (Decrease) In Unrestricted
  Net Assets                            (79,000)      123,000

Temporarily Restricted Net Assets
  Investment Income (Loss), Net          (5,000)      (2,000)
  Scholarship Released from
    Restrictions                         (1,000)      (1,000)
Decreased In Temporarily Restricted
  Net Assets                             (6,000)      (3,000)

Change In Permanently Restricted
  Net Assets                                   0            0
Increase (Decrease) In Net Assets       (85,000)      120,000
Net Assets At Beginning of Year        1,852,000    1,732,000

Net Assets At End of Year             $1,767,000   $1,852,000

2002-2003 Total Operating Revenue = $7,462
(in thousands)

Dues                $3,707
CPE                 $2,694
Peer Review           $492
PR & Publications     $295
Member Services       $138
Other                 $136

Note: Table made from pie chart.

2002-2003 Total Operating Expenses = $7,346
(in thousands)

CPE                   $2,597
PR & Publications     $1,475
General & Admin.      $1,167
Government Affairs      $659
Member Services         $586
Peer Review             $483
Chapters & Sections     $379

Note: Table made from pie chart.

Net CPE Revenue

(in thousands)

Actual 2003   $97
Budget 2003   $39
Actual 2002   $80

Section Dues

(in thousands)

2003   $96
2002   $71
2001   $60

2003-2004 Budget Revenue = $8,504
(in thousands)

Dues                $4,021
CPE                 $3,358
Peer Review           $454
PR & Publications     $389
Member Services       $154
Other                 $128

Note: Table made from pie chart.

2003-2004 Budget Expenses = $8,399
(in thousands)

CPE                   $3,290
PR & Publications     $1,695
General & Admin.      $1,168
Government Affairs      $696
Member Services         $677
Peer Review             $456
Chapters & Sections     $417

Note: Table made from pie chart.

Respectfully Submitted,

Sandra K. Pierce, CPA, CFP Chair of the Board

Laura A. Hay, CPA Vice President, Finance and Technical Services

The Ohio Society of CPAs

535 Metro Place South

P.O. Box 1810

Dublin, Ohio 43017-7810

614.764.2727

800.686.2727

www.ohioscpa.com