APPA: THE ASSOCIATION OF HIGHER EDUCATION FACILITIES OFFICERS Executive Summary, Preliminary Draft March 31, 2013 Audit

2013 Audit Highlights NEW REPORT FORMAT UNDER CLARITY STANDARDS. Unqualified (Clean) Opinion on GAAP Financial Statements. No SAS 115 Findings Material Weaknesses or Significant Deficiencies that Require Communicated Total net income, $74,285 in FY 2013 compared to $66,992 in FY 2012 Total Assets Decreased 4% Total Liabilities Decreased 13% Net Assets Increased 4% Net assets represent 42% of total expense compared to 40% in prior year

Review of Draft Financial Statements Statements of Financial Position Total Assets Decreased 4% to $3,646,430 in FY 2013 ($ 3,814,229 in FY 2012). Significant changes in Assets: Cash/CD (64k) Products in Process (68k) Total Liabilities Decreased 13% to $1,678,570 in FY 2013 from $1,920,654 in FY 2012. Significant changes in Liabilities: AP/Accrued Exp (104k) Deferred Revenue (211k) Net Assets Increased $74K Net Assets to Total Expense Ratio Industry Minimum Goal = 30-50% 2013 APPA = 42% 2012 APPA = 40%

Review of Draft Financial Statements Statements of Activities 2013 total revenue decreased 2% to $4,705,355. Education 75k Membership 48k FMEP (145k) 2013 expenses decreased 2% to $4,632,070. Education (66k) Annual Conference 36k FMEP (37k) Investment loss in 2012 was $37,057, Investments sold in PY. Expenses Presented on a Functional Basis (Costs Allocated to Programs and Supporting Services) in accordance with Nonprofit Standards. Cost Allocations Based on Estimates of Staff Time Devoted to Activities. Expenses also presented on a natural basis in the back of the audit report.

Review of Draft Financial Statements General Observations (ASAE 2–5 Million Range) Operating Efficiency Ratio (Total Revenue/Total Assets) 1.29, ASAE 1.1 Leverage (Total Liabilities / Total Net Assets), .85, ASAE .80 * Membership income represents 37.5% of total revenue, ASAE Median Benchmark is 39.9%. Source: ASAE 14th Edition of the Operating Ratio Report, Revenues $2-$5 million, 700 Associations reporting. Total personnel expenses as a percent of total revenue is 33.9%; ASAE 40.5%; similar budget Salary expense as a percent of total revenue is 25.9%, ASAE is 33.1%, similar budget Revenue per employee, $392,196, ASAE $228,609