Your NEA financial report: an annual audit.
The renovation of NEA headquarters was completed this fall. That completion is reflected in our financial statements by a transfer of assets to the Capital Improvement Fund (top right on opposite page).
We will continue to carefully monitor our operations during this time of recession. Our goal, as always, is to maximize all available resources to fulfill the Association's mission.
Coopers & Lybrand, Certified Public Accountants
Report of Independent Accountants
To the Executive Committee and Members of the National Education Association of the United States
We have audited the accompanying balance sheets of the General Fund and the Capital Improvement Fund of the National Education Association of the United States (a nonprofit corporation incorporated by an Act of the United States Congress) as of August 31, 1991 and 1990, the statements of activity and related schedule of area expense by type, changes in fund balance and changes in financial position of the General Fund and the statements of activity and changes in fund balance of the Capital Improvement Fund for the years then ended. We have also audited the consolidated balance sheets of the Special Purpose Funds of the National Education Association of the United States and subsidiary as of August 31, 1991 and 1990, and the related consolidated statements of activity and changes in fund balances for the years then ended. These financial statements are the responsibility of the Association's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly the financial position of the General Fund, Capital Improvement Fund and the Special Purpose Funds of the National Education Association of the United States and subsidiary as of August 31, 1991 and 1990, the results of operations and the changes in financial position of the General Fund and the Capital Improvement Fund, and the consolidated results of operations of the Special Purpose Funds for the years then ended in conformity with generally accepted accounting principles.
November 12, 1991
A Report from NEA Secretary-Treasurer Marilyn Monahan
NATIONAL EDUCATION ASSOCIATION OF THE UNITED STATES GENERAL FUND BALANCE SHEETS August 31, 1991 and 1990 ASSETS 1991 1990 Current assets: Cash and short-term investments at cost, which approximates market. $14,182,871 $12,057,363 Membership dues receivable from state associations, net of reserves for cancellations and uncollectible amounts of $926,437 in 1991 and $852,466 in 1990 (Note 2) 22,394,291 18,922,558 Amounts due from affiliates and other organizations, net of reserve for bad debts of $59,926 in 1991 and $59,926 in 1990 (Notes 2 and 3) 1,112,190 763,515 Amount due from Special Purpose Funds (Note 2) 392,668 1,638,250 Amount due from Capital Improvement Fund (Note 12) 8,596,461 -- Publication and advertising receivables 384,188 124,581 Prepaid expenses 2,212,164 1,894,369 Other current assets 858,403 974,925 Total current assets 50,133,236 36,375,561 Long-term assets: Equipment, at cost, less accumulated depreciation of $9,874,447 in 1991 and $9,555,707 in 1990 (Note 2) 3,928,807 1,214,924 Notes receivable and other assets 3,190,211 3,386,812 Deferred building renovation costs (Notes 2, 11 and 12) -- 33,563,950 Total long-term assets 7,119,018 38,165,686 Total general fund assets $57,252,254 $74,541,247 LIABILITIES AND FUND BALANCE 1991 1990 Current liabilities: Accounts payable and accrued liabilities $16,319,704 $12,704,906 Accrued annual leave 4,190,222 3,949,924 Amounts held for affiliates and other organizations (Note 3) 184,920 181,175 Total current liabilities 20,694,846 16,836,005 Long-Term liabilities: Accrued severance pay (Note 2) 3,434,556 3,227,484 Amount due to Special Purpose Funds (Note 2) 13,067,769 10,736,802 Construction loan payable (Notes 11 and 12) -- 16,900,000 Total long-term liabilities 16,502,325 30,864,286 Total general fund liabilities 37,197,171 47,700,291 Commitments and contingencies (Notes 5, 6, 7, 9 and 11) Fund balance 20,055,083 26,840,956 Total general fund liabilities and fund balance $57,252,254 $74,541,247 The accompanying notes are an integral part of these financial statements. GENERAL FUND STATEMENTS OF ACTIVITY for the years ended August 31, 1991 and 1990 1991 1991 1990 Budget Actual Actual Revenues: Membership dues (Note 2) $147,304,000 $148,988,179 $136,862,755 Other income, fees, and services 200,000 908,215 1,019 Total revenues 147,504,000 149,896,394 137,881,630 Expenses by area: Membership and Affiliates 51,805,878 53,123,870 48,840,384 Collective Bargaining and Compensation 1,307,200 1,317,357 1,692,724 Communications 6,831,946 7,022,328 6,177,515 Government Relations 8,638,683 8,534,943 7,930,358 Human and Civil Rights 4,717,949 4,746,442 4,699,044 Education Policy and Professional Practice 4,167,531 4,086,258 4,030,568 Legal Services 17,552,184 17,174,128 15,817,951 Publishing 7,730,129 7,532,819 6,890,149 Research 6,000,102 5,827,050 5,292,230 Administration 11,849,101 12,396,048 10,145,912 Business and Finance 5,603,480 5,709,557 5,406,275 Data Processing 5,068,469 4,989,794 4,279,429 Governance 9,929,308 10,684,083 9,346,519 Total expenses by area 141,201,960 143,144,677 130,549,058 Other expenses: NFIE (Note 8) 2,300,000 2,300,000 2,300,000 Building renovation (Notes 2, 11, and 12) 3,500,000 3,500,000 4,239,817 Total other expenses 5,800,000 5,800,000 6,539,817 Total expenses 147,001,960 148,944,677 137,088,875 Excess of revenues over expenses $502,040 $951,717 $792,755 SCHEDULES OF AREA EXPENSES BY TYPE for the years ended August 31, 1991 and 1990 1991 1990 Salaries and benefits (Notes 2 and 5) $45,780,512 $40,426,232 Grants to, and joint projects with, state and local associations 42,611,252 37,732,395 Kate Frank/DuShane Program expenditures (Note 4) 10,211,624 9,314,891 Travel 12,636,924 13,081;146 Publications costs, net of advertising income 4,107,563 3,793,940 Outside services (including consultants, legal and audit) 18,949,792 17,348,640 Machinery rentals, repairs, materials and supplies 2,152,451 1,850,267 Office expenses (in cluding telephone, office supplies and utilities) 3,358,027 3,897,848 Administrative expenses (including insurance and rent) 3,336,532 3,103,699 Total area expenses by type $143,144,677 $130,549,058 The accompanying notes are an integral part of these financial statements. STATEMENTS OF CHANGES IN FUND BALANCE Fund balance, August 31, 1989 $26,048,201 Excess of revenues over expenses 792,755 Fund balance, August 31, 1990 26,840,956 Excess of revenues over expenses 951,717 Transfer to capital improvement fund (Note 12) (7,737,590) Fund balance, August 31, 1991 $20,055,083 The accompanying notes are an integral part of these financial statements. GENERAL FUND STATEMENTS OF CHANGES IN FINANCIAL POSITION for the years ended August 31, 1991 and 1990 1991 1990 Sources of cash and short-term investments: From operations: Excess of revenues over expenses $951,717 $792,755 Increase (decrease) in excess of revenues over expenses from noncash revenues and expenses: Depreciation and amortization 318,740 143,201 Decrease (increase) in other assets, net 313,123 (2,246,979) Accrued severance pay 207,072 401,445 Accounts payable and accrued liabilities 3,614,798 1,617,917 Accrued fringe benefits 240,298 299,742 Amount due to Special Purpose Funds, net 3,576,549 3,505,701 Amounts held for affiliates and other organizations 3,745 79,802 Transfer of deferred building renovation costs to Capital Improvement Fund 59,737,590 -- Loan proceeds 26,503,539 14,000,000 Total sources of cash and short- term investments 95,467,171 18,593,584 Uses of cash and short-term investments: Membership dues receivable 3,471,733 322,618 Due from Capital Improvement Fund 8,596,461 -- Publication and advertising receivables 259,607 (20,558) Prepaid expenses 317,795 (77,177) Advances to (repayment from) affiliates and other organizations, net 348,675 (40,449) Purchase of equipment 3,032,623 1,203,191 Increase in deferred building construction costs 26,173,640 17,156,106 Transfer of loans to Capital Improvement Fund 43,403,539 -- Transfer to Capital Improvement Fund 7,737,590 -- Total uses of cash and short-term investments 93,341,663 18,543,731 Net increase in cash and short-term investments 2,125,508 49,853 Cash and short-term investments, beginning of year 12,057,363 12,007,510 Cash and short-term investments, end of year $14,182,871 $12,057,363 The accompanying notes are an integral part of these financial statements. CAPITAL IMPROVEMENT FUND BALANCE SHEETS August 31, 1991 and 1990 ASSETS 1991 1990 Cash $ -- $1,335 Land, at cost 1,753,777 1,753,777 Building, at cost, less accumulated depreciation of $7,244,862 in 1991 and $7,005,871 in 1990 (Notes 2 and 11) 4,652,935 4,891,926 Building renovation, at cost, (Notes 2, 11, and 12) 59,737,590 -- Total capital improvement fund assets $66,144,302 $6,647,038 FUND BALANCE Current liabilities: Construction loan payable refinanced-- current portion $595,986 $ -- Amount due to General Fund 8,596,461 Total current liabilities 9,192,447 -- Long-term liabilities (Notes 6, 11, and 12): Refinanced loans: Line of credit 7,403,539 -- Construction loan payable 35,404,014 Total capital improvement fund liabilities 52,000,000 -- Fund balance (Note 2) 14,144,302 6,647,038 Total capital improvement fund balance $66,144,302 $6,647,038 The accompanying notes are an integral part of these financial statements. CAPITAL IMPROVEMENT FUND STATEMENTS OF ACTIVITY AND CHANGES IN FUND BALANCE Fund balance, August 31, 1989 $6,885,961 Depreciation expense 238,992 Other (revenue) expense (69) Fund balance, August 31, 1990 6,647,038 Depreciation expense 238,992 Other (revenue) expense 1,334 Transfer from general fund (Note 12) 7,737,590 Fund balance, August 31, 1991 $14,144,302 The accompanying notes are an integral part of these financial statements. SPECIAL PURPOSE FUNDS CONSOLIDATED BALANCE SHEETS August 31, 1991 and 1990 ASSETS 1991 1990 Cash $851,279 $1,228,163 Accounts receivable 4,526,457 4,191,820 Note receivable--NEEAF 191,051 1,068,417 Prepaid expenses 290,188 76,950 Leasehold improvements, furniture and equipment, at cost, net of accumulated depreciation of $1,066,219 in 1991 and $826,209 in 1990 449,344 291,313 Total current assets 6,308,319 6,856,663 Amount due from general fund (Note 2) 13,067,769 10,736,802 Total special purpose $19,376,088 $17,593,465 funds assets LIABILITIES AND FUND BALANCES 1991 1990 Liabilities: Note payable--NEEAF $191,051 $1,068,417 Accounts payable and accrued liabilities 3,215,859 2,821,654 Amount due to general fund (Note 2) 392,668 1,638,250 Total current liabilities 3,799,578 5,528,321 Deferred Income NEA-Retired Program (Note 2) 1,969,546 1,930,307 Accrued post-retirement health-care benefits (Notes 2 and 5) 7,914,278 6,213,822 Total long-term liabilities 9,883,824 8,144,129 Total special purpose funds liabilities 13,683,402 13,672,450 Fund balances 5,692,686 3,921,015 Total special purpose funds liabilities and fund balances $19,376,088 $17,593,465 The accompanying notes are an integral part of these financial statements. SPECIAL PURPOSE FUNDS CONSOLIDATED STATEMENTS OF ACTIVITY AND CHANGES IN FUND BALANCES for the years ended August 31, 1991 and 1990 Fund Revenues balances August 31, NEA 1989 appropriation Other UniServ Fund (Note 2) $118,921 $27,352,370 $ -- Special Services and Education Travel Trust Funds 1,179,889 -- 15,253,429 National Education Employees Assistance Fund (Note 7) 108,927 155,000 5,916 NEA-Retired Program Fund (Note 2) 1,493,024 369,537 496,182 $2,900,761 $27,876,907 $15,755,527 Fund Revenues balances August 31, NEA Expenses 1990 appropriation UniServ Fund (Note 2) $26,600,325 $870,966 $29,839,811 Special Services and Education Travel Trust Funds 15,271,228 1,162,090 -- National Education Employees Assistance Fund (Note 7) 221,091 48,752 100,000 NEA-Retired Program Fund (Note 2) 519,536 1,839,207 550,821 $42,612,180 $3,921,015 $30,490,632 Revenues Fund balances August 31, Other Expenses 1991 UniServ Fund (Note 2) $ -- $29,783,686 $927,091 Special Services and Education Travel Trust Funds 18,573,313 17,251,711 2,483,692 National Education Employees Assistance Fund (Note 7) 26,234 149,937 25,049 NEA-Retired Program Fund (Note 2) 576,022 709,196 2,256,854 $19,175,569 $47,894,530 $5,692,686 The accompanying notes are an integral part of these financial statements.
NOTES TO FINANCIAL STATEMENTS
The National Education Association of the United States (NEA) is a nonprofit corporation incorporated under a special Act of the United States Congress. Its mission statement reads: "To fulfill the promise of a democratic society, the National Education Association shall promote the cause of quality public education and advance the profession of education; expand the rights and further the interests of educational employees; and advocate human, civil, and economic rights for all."
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The financial statements of NEA have been prepared on the accrual basis. To ensure observance with its bylaws, the resources of NEA are classified for accounting and reporting purposes into funds established according to their nature and purpose. The assets, liabilities, fund balances and changes in fund balances are reported in the following fund groups:
General Fund The bylaws of NEA provide that the General Fund shall comprise all income received in the form of dues, interest, dividends, fees, earnings from advertising, sales of NEA publications and payments for services and funds received by gift, bequest, devise or transfer to NEA, which are not specifically designated for deposit in the Capital Improvement Fund. Capital Improvement Fund The bylaws of NEA provide that the Capital Improvement Fund shall comprise the properties and permanent investment of NEA and other funds, or properties received by gift, devise, bequest or transfer for deposit in the Fund. Disbursement from the Capital Improvement Fund to acquire new properties or to provide for major long-term improvements in existing properties, must be authorized by a two-thirds vote of the Board of Directors. Expenditures from this Fund for any other purpose must be authorized by a two-thirds vote of the Representative Assembly. Special Purpose Funds NEA has various Special Purpose Funds which consist of restricted funds or funds designated for specific projects and purposes. Special Purpose Funds include activities such as the UniServ Fund, NEA-Retired Program Fund, accrued post-retirement healthcare benefits, and the administration of various services such as insurance plans for members. These funds also include the activity of Member Benefits Corporation (MBC), a wholly-owned subsidiary of NEA. MBC provides support to the Special Services and Educational Travel Trust Funds primarily in the areas of membership services, affiliate support, marketing and training.
General Fund budget
The budget of NEA is designed to achieve the mission and strategic objectives of NEA. The budget amounts included in the statements of General Fund activity are as approved by NEA's Representative Assembly and amended by the Board of Directors, as set forth in the guidelines approved by the Representative Assembly and the Board of Directors.
During 1982, NEA began offering life memberships to retired members through a new special purpose fund known as the NEA-Retired Program. Payments to the fund qualify retired members for certain services provided to active members, as well as services designed specifically for retired persons. Payments to the fund are recorded as deferred income when received and amortized over the estimated life expectancy of its members.
Property, equipment, and depreciation NEA records depreciation on its building in the Capital Improvement Fund. This depreciation is recorded using the straight-line method over the estimated useful life of the building of 50 years. Depreciation on the building was approximately $239,000 in t 991 and 1990, reflecting the change to the Capital Improvement Fund balance.
NEA capitalizes equipment with a cost in excess of $2,500 in the General Fund and depreciates these assets using the straight-line method over the estimated useful life of the assets.
Building renovation costs and expenses
Construction, architectural, design, engineering services and construction-period interest costs related to the renovation of the building had been recorded as deferred costs in the General Fund. Effective August 31, 1991 the building renovation costs were placed in service and the accumulated costs transferred to the Capital Improvement Fund. Amounts incurred during construction related to asbestos removal, moving and facilities rental expenses have been expensed as incurred.
Membership dues are recognized as income over the membership year, which is September 1 through August 31. Dues are assessed to members as provided in the bylaws. An estimated provision for uncollectibles, write-offs and cancellations is charged against membership dues revenues.
In accordance with the bylaws, a percentage of the membership dues is allocated to UniServ grants, (which are included in the expenses of membership and affiliates), whereby NEA provides grants to affiliates to assist in funding their staff representatives whose responsibilities are to implement, improve and coordinate programs of NEA.
Employee benefit plans
NEA has a policy entitling employees with over 10 years of service to severance pay equal to 10 weeks of salary. NEA recognizes the liability for severance pay at the time the employee reaches 10 years of employment and is entitled to the severance pay.
Pension plan expense is funded and expensed as contributions are due and payable.
Post-retirement health care and life insurance benefits for present retirees are expensed when the premiums are payable. NEA has adopted an accrual method of accounting for future benefits to be provided to retirees and qualified active employees (see note 5).
Certain amounts for the year ended August 31, 1990 in the General Fund Statement of Activity have been reclassified to conform with the August 31, 1991 presentation.
3. GOVERNANCE AFFILIATES, NONGOVERNANCE AFFILIATES AND OTHER ORGANIZATIONS
NEA provides various administrative services and acts as custodian for the funds of certain Governance and Nongovernance Affiliates and other organizations, which also offer services to members of NEA and to other educators. However, each of these organizations has a separate Board of Directors and operates independently of NEA. Accordingly, the accompanying financial statements present the financial activity of NEA exclusive of these organizations, except for the funds held by or due to NEA as custodian.
4. KATE FRANK/DUSHANE PROGRAM
The Kate Frank/DuShane Program (the Program) was established by the Representative Assembly to protect the human, civil and professional rights of school employees. The major project of the Program, the Unified Legal Services Program, provides reimbursement for legal assistance to educational employees in matters related to their employment.
5. RETIREMENT BENEFITS
NEA participates in a multiemployer, defined-benefit retirement plan which is noncontributory for NEA employees and which covers substantially all permanent employees. Approximately 70% of the employees covered under the plan are employed by NEA; the remaining 30% are employees of various state and local affiliates of NEA. NEA's policy is to fund retirement costs accrued.
NEA's retirement contribution expense for the fiscal year ended 1991 was approximately $3,655,671. The accumulated plan benefits and plan net assets available for benefits as of the date of the latest actuarial valuation are presented below:
January 1 1991 1990 Actuarial present value of accumulated benefits: Vested $76,803,953 $71,111,281 Nonvested 12,848,651 12,293,699 $89,652,604 $83,404,980 Net assets available for benefits $27,310,894 $27,281,219
The increase in the actuarial present value of accumulated benefits reflects plan amendments including a standard cost of living adjustment for retirement benefits.
The actuarial present value of accumulated plan benefits ignores the effects of future compensation increases on the benefits that participants will receive for their past service. If this value is adjusted for projected salary increases, consistent with the assumed rate of return, the adjusted actuarial present value of accumulated plan benefits would be approximately $117,777,000 and $118,808,000 as of January 1, 1991 and 1990, respectively.
The assumed rate of return used in determining the actuarial present value of accumulated plan benefits was 8.5% for 1991 and 8% for 1990. As of January 1, 1991, the retirement plan had no unfunded liabilities.
NEA's employees are also eligible to participate in the 401 (k) Salary Reduction Plan of the National Education Association (the Plan) in which the employee can make voluntary, tax-deferred contributions within specified limits. The Plan was established under the provisions of Internal Revenue Code Subsection 401(k) and has received a favorable determination as to its tax status. NEA's contributions to the Plan are based on a set percentage of employee contributions which amounted to $772,508 and $487,230 for the years ended August 31, 1991 and 1990, respectively.
In addition to providing pension benefits, NEA provides various pest-retirement health care and life insurance benefits for retirees. Substantially, all of NEA's employees are eligible for these benefits upon retirement. The annual cost for providing such benefits to current retirees is expensed as the premiums are payable, and amounted to approximately $796,000 for fiscal year 1991 and $530,000 for fiscal year 1990.
NEA has adopted an accrual method of accounting to provide for future payment of post-retirement health care benefits. In order to accrue for the estimated obligation to provide such benefits for present retirees and eligible active employees upon retirement over an estimated period of 10 to 12 years, approximately $1,700,000 in fiscal years 1991 and 1990, was accrued and expensed in the General Fund. This obligation, amounting to $7,914,278 and $6,213,822, is included as a liability in the Special Purpose Funds as of August 31, 1991 and 1990.
6. BANK LINE OF CREDIT
NEA has a line of credit of $12,500,000 which was from a commercial bank at the bank's prime interest rate. As of August 31, 1991, the bank's prime interest rate was 8.5% per annum. As of August 31, 1991, $7,403,539 was borrowed against this line to partially finance the building renovation. The amount outstanding was refinanced on October 15, 1991 as part of the permanent loan collateralized by the building renovation (see Note 11).
7. NATIONAL EDUCATION EMPLOYEES ASSISTANCE FUND, INC.
The National Education Employees Assistance Fund, Inc. (NEEAF), formerly the National Teachers Assistance Fund, Inc., is a nonprofit corporation established for the purpose of providing financial and other assistance to member organizations and their individual members involved in disputes over terms and conditions of employment. In this capacity, NEEAF, from time to time, has guaranteed loans made by lending institutions to members who were involved in such disputes. These loans are collateralized by letters of credit from those state affiliates which are members of NEEAF and also by NEA's guarantee in the amount of approximately $2,292,000. In the event of default on a loan, the bylaws of NEEAF provide that the bank shall first draw upon the letter of credit of the state affiliate from which the funds were transmitted and, thereafter, proportionately from all other letters of credit, including NEA's line of credit.
As of August 31, 1991, NEA is contingently liable for $606,149 of the $1,212,298 in loans guaranteed by NEEAF in the event of default. Subsequent to August 31, 1991 NEEAF guaranteed additional loans of $3,111,408 for an additional contingent liability of $1,555,704.
8. NATIONAL FOUNDATION FOR THE IMPROVEMENT OF EDUCATION
The National Foundation for the Improvement of Education (NFIE) was created in 1969 by the National Education Association as a tax-exempt public foundation to improve the quality of education for citizens of the United States.
The Foundation develops strategies that address the most challenging problems confronting American education. NFIE has designed its direction to develop programs in three focus areas: improvement of students' educational success, improvement of teachers' professional capability and improvement of the effectiveness of curriculum and instruction.
During the year ended August 31,1991, payments totaling $2,300,000 were made to NFIE. Of this amount, approximately $1,800,000 was allocated for an endowment that will help fund other programs to meet critical needs of students and teachers in years to come. The remaining funds were provided to cover administrative supporting services of the NFIE.
9. COMMITMENTS AND CONTINGENCIES
In April 1989, the Executive Committee approved that NEA guarantee a five year loan from American Security Bank to the Indiana State Teachers Association (ISTA). As of August 31, 1991, the amount outstanding on this loan was $1,265,134.
NEA leases office space at a number of locations under noncancelable operating leases. Future minimum lease payments under these leases as of August 31, 1991, are as follows: 1992 $496,015 1993 294,508 1994 68,652 $858,652
Rental expense for all operating leases was approximately $1,904,000 in 1991 and $1,035,000 in 1990.
NEA has been named as a party in several legal matters, the outcome of which cannot presently be determined. Management believes that the net results of these claims will not have a material impact on NEA.
10. INCOME TAXES
Under provisions of Section 501(c)(5) of the Internal Revenue Code and the applicable income tax regulations of the District of Columbia, NEA is exempt from taxes on income, other than taxes on unrelated business income. Since NEA has incurred a cumulative loss from these unrelated business activities, no provision for income taxes has been recorded in the accompanying financial statements.
11. CONSTRUCTION FINANCING
On October 20, 1988, NEA entered into a construction loan agreement amounting to $36,000,000 of which $36,000,000 is outstanding at August 31,1991 to be used to partially finance the construction of the NEA headquarters office building. The loan agreement provides for monthly interest only payments on the unpaid principal balance, at variable rates, during the construction period. At August 31, 1991, the interest rate was 8.75% per annum. The loan was collateralized by NEA's headquarters office building, personal property, assignment of future leases and construction contracts.
During the year ended August 31, 1991, approximately $4,925,600 of interest charges has been incurred and has been capitalized as part of building costs.
On October 15, 1991 the present construction loan along with the outstanding balance on the line of credit in the amount of $7,403,539 (see Note 6) was refinanced into a permanent mortgage loan with an 20-year maturity in the amount of $52,000,000 at an average interest rate of 10.125% collateralized by NEA's headquarters office building and personal property.
The future maturities of the loan payable are as follows:
Year ending August 31: 1992 $595,986 1993 783,888 1994 866,264 1995 957,299 1996 1,057,897 Thereafter 47,738,666 $52,000,000
12. INTERFUND TRANSFERS
As of August 31, 1991, upon completion of the construction of the building renovation, the total cost of $59,737,590 and debt totaling $43,403,539 were transferred from the General Fund to the Capital Improvement Fund. As of August 31, 1991 the Capital Improvement Fund established a payable of $8,596,461 to the General Fund to reimburse the General Fund for a portion of renovation costs. A permanent transfer from the General Fund to the Capital Improvement Fund of $7,737,590 has been recorded as of August 31, 1991.
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|Date:||Feb 1, 1992|
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