CAFR. Comprehensive Annual Financial Report

Transcription

1 CAFR Comprehensive Annual Financial Report FISCAL YEAR ENDED JUNE 2018

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3 National Association of State Auditors, Comptrollers and Treasurers Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2018 INTRODUCTORY SECTION... 1 Letter of Transmittal... 3 List of Officers and Members of the Executive Committee... 6 List of Staff Members... 7 FINANCIAL SECTION... 9 Independent Auditor s Report on Basic Financial Statements Management s Discussion and Analysis Basic Financial Statements: Statement of Net Position Statement of Revenues, Expenses and Changes in Fund Net Position Statement of Cash Flows Notes to the Financial Statements OTHER INFORMATION Budgetary Comparison Schedule Statistical Section Report on Internal Controls Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards i

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5 1 Introductory Section

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7 September 10, 2018 To the Executive Committee and Members of the National Association of State Auditors, Comptrollers and Treasurers: I am pleased to submit the Comprehensive Annual Financial Report of the National Association of State Auditors, Comptrollers and Treasurers for the fiscal year ended June 30, Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the Association. To the best of our knowledge, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the Association. All disclosures necessary to enable the reader to gain an understanding of the Association s financial activities have been included. Management of the Association is responsible for establishing and maintaining internal control designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and that the evaluation of costs and benefits requires estimates and judgments by management. Article VI of the Association s Constitution and Bylaws requires that an annual audit be conducted of the Association s financial statements. NASACT s Audit Committee appointed a team of three auditors who conducted the audit of the FY 2018 financial statements in September The independent auditor s report is at the beginning of the financial section of this report. The Comprehensive Annual Financial Report is presented in three sections: the introductory section, the financial section and the statistical section. The introductory section includes this transmittal letter, a list of the Association s officers and Executive Committee for and a list of staff in the Lexington and Washington offices at September 10, The financial section includes the independent auditor s report, management s discussion and analysis, the basic financial statements and notes to the financial statements. Other information includes the budgetary comparison schedule and the statistical section. The statistical section contains trend information about NASACT s financial position, revenues and debt, as well as demographic and operating information. Overall, NASACT s total net position increased by $114,504 in FY Although the Executive Committee is working to lower unrestricted net assets to a target level, the continued strong support of members and corporate associates allowed the Association another positive year. Profile of NASACT NASACT was founded in 1915 to allow principal state officials concerned with state financial management to gather annually to discuss issues of mutual interest. Over the years, as state financial management became increasingly complex, NASACT expanded its services and offerings to members. With the establishment of the Governmental Accounting Standards Board in 1984 came the need for technical services as members became involved in the process of setting accounting and financial reporting standards. 3

8 Today, the Association engages in a wide variety of activities to enhance the professionalism of its members and to foster accountability, efficiency and effectiveness in state government. Among these activities are: Organizing conferences and webinars. Offering training seminars on a variety of finance and audit-related topics. Providing weekly updates to members. Communicating regularly with standards-setting bodies regarding matters related to governmental accounting, financial reporting and auditing. Serving as an advocate for states interests in Washington, DC. Conducting research on a variety of topics of interest to members. Working cooperatively with peer organizations of state government officials on topics and projects of mutual interest. Major Projects and Initiatives Fiscal year 2018 has been an active year for NASACT and its members. Listed below are some of the activities focused on during the year: NASACT hosted calls to explore accountability of disaster relief funds. Assisting the U.S. Government Accountability Office, NASACT hosted calls to explore accountability of funds passing through states and local governments for disasters including recent hurricanes and wildfires. NASACT continued efforts to address transparency and improper payments. NASACT provided an opportunity for states to participate in the federal Do Not Pay Initiative and continued working with GAO and other federal agencies to address improper payments, with a particular focus on Medicaid. NASACT also continues to follow and provide feedback through participation in data forums on how open data can achieve more efficiency in financial reporting and bring more transparency to government spending, including efforts to implement the DATA Act. NASACT aided states as they worked to implement Uniform Guidance. NASACT continues to monitor issues surrounding U.S. Office of Management and Budget s Uniform Guidance and provides members a forum to discuss issues related to its implementation. NASACT s UG Implementation Work Group is addressing many issues including awaiting a proposed rule change related to pension and OPEB costs and monitoring a U.S. Department of Education proposal seeking a separate audit of the student financial aid cluster and possible additional audit work regarding securing student information. NASACT continued to monitor pension issues. NASACT continues monitoring issues and working to educate Congress on the fiscal conditions of public pension systems. NASACT has worked with other groups to oppose congressional proposals that would undermine state/local government authority over pension plans. NASACT continued to support the treatment of certain municipal securities as high-quality liquid assets. Through the Public Finance Network, NASACT has urged Congress to support the passage of legislation that would require appropriate federal banking agencies to treat certain municipal obligations as high-quality liquid assets. Language designating municipal securities was included in a larger financial services bill that was signed into law on May 24, NASACT joined other state and local government organizations to educate Congress on the importance of the tax exemption for municipal bonds. Over the past several years there have been proposals both in Congress and the executive branch that would limit or eliminate the tax exemption for municipal bonds. If such proposals were enacted, state and local governments could face a decrease in the demand for municipal bonds which would ultimately result in higher costs to build and maintain infrastructure. 4

9 NASACT continues participation in forums to address important financial management and municipal market issues. NASACT provides direct input through forums such as the bi-annual municipal market issues forum hosted by the Municipal Securities Rulemaking Board and the Single Audit Roundtable, a venue for federal, state and private sector participants to discuss and potentially resolve issues regarding the single audit. NASACT also continues to work with other public interest groups through the Public Pension Network and the Public Finance Network. NASACT testified at the following Governmental Accounting Standards Board hearing: Revenue and Expense Recognition (May 30) NASACT responded to the following due process documents from GASB: ITC on Revenue and Expense Recognition ED on Accounting for Interest Cost during the Period of Construction ED on Implementation Guide No. 201Y-X ED on Majority Equity Interests ED on Implementation Guide No. 201X-Z ED on Certain Disclosures Related to Debt NASACT sent letters to Congress or regulatory bodies: Expressing concerns about the tax treatment of private activity bonds and requesting a delay in the effective date of the advance refunding provision in tax reform Opposing bond provisions in H.R. 1 NASACT provided multiple training opportunities. NASACT Annual Conference August 2017 NSAA IT Workshop and Conference September 2017 NASC Annual Conference March 2018 Emerging Leaders Conference April 2018 Training Issues Workshop April 2018 NSAA Annual Conference June 2018 Webinars featuring the following topics: GASB Review (July 2017) A Global Perspective on Innovation: How Are Governments Achieving It? (February 2018) Smarter Finance, Better Government (March 2018) Blockchain Basics for Government Finance and Audit Professionals (April 2018) Identifying Improper Payments in High-Risk Programs: A Look at Medicaid (June 2018) Past financial reports about the Association can be found online at Questions about this report may be directed to NASACT s headquarters office. Respectfully submitted, R. Kinney Poynter Executive Director 5

10 NATIONAL ASSOCIATION OF STATE AUDITORS, COMPTROLLERS AND TREASURERS EXECUTIVE COMMITTEE OFFICERS President Roger Norman State Auditor Arkansas Second Vice President Beth Pearce State Treasurer Vermont First Vice President D. Clark Partridge State Comptroller Arizona Secretary Elaine M. Howle State Auditor California Treasurer Richard Eckstrom State Comptroller South Carolina OTHER MEMBERS Immediate Past President David H. Lillard, Jr. State Treasurer Tennessee Daryl Purpera State Auditor Louisiana Steve Barnett State Auditor South Dakota Cynthia Cloud State Auditor Wyoming Mike Frerichs State Treasurer Illinois Alan Skelton State Accounting Officer Georgia Beth Wood State Auditor North Carolina Stacey Pickering State Auditor Mississippi Manju Ganeriwala State Treasurer Virginia Steve McCoy State Treasurer Georgia 6

11 NATIONAL ASSOCIATION OF STATE AUDITORS, COMPTROLLERS AND TREASURERS STAFF (September 10, 2018) In Lexington R. Kinney Poynter, CPA, Executive Director Patsy Hackney, Administrative Assistant Glenda Johnson, Communications Manager Donna Maloy, Conference Manager Kimberly O Ryan, CPA, NASC Association Director Anna Peniston, Professional Education Coordinator Andrea Schurr, Intern Sherri Rowland, CPA, NSAA Association Director Lori Slagle, Finance Manager Kathleen Young, Peer Review Coordinator In Washington Cornelia Chebinou, J.D., Washington Director Tanya Grayson, Administrative Assistant Neal Hutchko, Policy Analyst 7

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13 9 Financial Section

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15 Office of the Washington State Auditor Pat McCarthy INDEPENDENT AUDITOR S REPORT ON FINANCIAL STATEMENTS October 4, 2018 Executive Committee and Members R. Kinney Poynter, Executive Director National Association of State Auditors, Comptrollers and Treasurers Lexington, Kentucky REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the National Association of State Auditors, Comptrollers and Treasurers (NASACT), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise NASACT s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to NASACT s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of NASACT s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 11 Insurance Building, P.O. Box Olympia, Washington (360) Pat.McCarthy@sao.wa.gov

16 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the National Association of State Auditors, Comptrollers and Treasurers, as of June 30, 2018, and the changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the sole purpose of forming an opinion on the financial statements that collectively comprise NASACT s basic financial statements as a whole. The introductory section, budgetary comparison schedule and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements of NASACT. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated October 4, 2018, on our consideration of NASACT s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering NASACT s internal control over financial reporting and compliance. Sincerely, Pat McCarthy State Auditor Olympia, WA 12

17 MANAGEMENT S DISCUSSION AND ANALYSIS The following discussion about the financial performance of NASACT provides a narrative overview and analysis of the financial activities for the fiscal year ended June 30, Readers are encouraged to consider this narrative in conjunction with the information that is furnished in the letter of transmittal, which can be found preceding this analysis, and with the basic financial statements that follow. Activities that are normally intended to recover all or a significant portion of their costs through user fees and charges to external users of goods and services are required to report as business-type activities. Since NASACT s activities are expected to recover their costs, the Association reports as a business-type activity. HIGHLIGHTS Net Position The assets of NASACT exceeded liabilities at fiscal year-end by $2,592,245 (presented as Total net position ). Of this amount $2,059,931 was reported as Unrestricted. In FY 2017, assets exceeded liabilities by $2,477,741 and unrestricted net position was $1,931,781. The unrestricted net position represents the amount available to meet ongoing obligations. Change in Net Position In FY 2018, NASACT s total net position increased by $114,504. OVERVIEW OF THE FINANCIAL STATEMENTS This overview and analysis is intended to serve as an introduction to the Association s basic financial statements, which include two components: (1) the financial statements and (2) notes to the financial statements. This report also contains other information, such as the budgetary and statistical sections. These components are described below. Financial Statements Because NASACT reports as a business-type activity, it presents the statements required for that type of entity. The statements provide both short-term and long-term information about the Association s financial position. These statements are prepared using the flow of economic resources measurement focus and the accrual basis of accounting, the same measurement focus and basis of accounting that is used in the private sector. These financial statements take into account all revenues and expenses related to the fiscal year regardless of whether the cash involved has been received or disbursed. The financial statements include three statements: 1. The Statement of Net Position (page 19) presents the Association s assets and liabilities, with the difference between the two reported as Total net position. Over time, increases or decreases in the Association s net position serve as an indicator of whether the financial position of NASACT is improving or deteriorating. 2. The Statement of Revenues, Expenses and Changes in Fund Net Position (page 20) presents information regarding how net position changed during the fiscal year. All changes in net position are reported when the underlying event occurs, regardless of the timing of the related cash flow. Thus, revenues and expenses are reported in this statement for items that will not result in cash transactions until future fiscal periods (such as uncollected contract revenues and earned, but not used, personal leave). 3. The Statement of Cash Flows (page 21) presents the cash receipts and cash payments occurring during the fiscal year. In this statement, changes in net cash are reported when the cash transaction occurs, regardless of the timing of the underlying events. This report provides users 13

18 with the information needed to assess the Association s ability to generate future cash flows and meet obligations as they come due and to assess operating versus investing activities. Notes to the Financial Statements The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the financial statements. The notes to the financial statements may be found immediately following the financial statements, pages 22 through 26. Other Information Following the basic financial statements is other information which further explains and supports the information in the financial statements. FINANCIAL ANALYSIS OF NASACT The condensed information below was derived from NASACT s Statement of Net Position at June 30, 2018, and June 30, The net position at June 30, 2018, is $2,592,245, an increase of $114,504 from fiscal year 2017 s net position of $2,477,741. Net Position as of Amount June 30, 2018 June 30, 2017 Change % Change Current assets $ 2,297,729 $ 1,524,565 $ 773,164 51% Capital assets 532, ,960 (13,646) -2% Other assets 1,750,000 2,475,000 (725,000) -29% Total assets 4,580,043 4,545,525 34,518 1% Current liabilities 1,811,619 1,898,475 (86,856) -5% Noncurrent liabilities 176, ,309 6,870 4% Total liabilities 1,987,798 2,067,784 (79,986) -4% Investment in capital assets 532, ,960 (13,646) -2% Unrestricted net position 2,059,931 1,931, ,150 7% Total net position $ 2,592,245 $ 2,477,741 $ 114,504 5% Current assets include cash, investments, deposits, accounts receivable, accrued interest receivable, prepaid expenses and restricted cash. As shown above, current assets increased 51 percent from June 30, The increase is due to the change in classification of investments that will mature in the next 12 months. Other assets decreased by 29 percent for the same reason. Capital assets decreased about two percent due to depreciation. Current liabilities include accounts payable, salaries payable, unearned income and the current portion of compensated absences. Current liabilities decreased five percent, caused in part by a slower collection of annual dues and technical service fees for the upcoming year. Noncurrent liabilities consist of the longterm portion of compensated absences. This number increased by four percent due to value and amount of accrued leave. The larger component of NASACT s net position (79 percent) is the unrestricted portion, which is resources that may be used at the Association s discretion to meet ongoing obligations. Unrestricted net position was 78 percent of total net position at June 30, The remaining portion of net position represents NASACT s investment in capital assets, such as an office building, office equipment, furniture and software applications. The Association uses these assets to provide services to members; these assets are not available for future spending. After netting capital 14

19 asset acquisitions, net investment in capital assets decreased by approximately two percent. The decrease is due to depreciation. The following condensed financial information was derived from NASACT s Statement of Revenues, Expenses and Changes in Net Position for the years ended June 30, 2018, and June 30, Statement of Changes in Net Position for the Fiscal Year Ended June 30, Amount Change % Change Revenues State dues $ 633,000 $ 642,900 $ (9,900) -2% Technical service fees 246, ,500 11,250 5% Corporate associates 499, ,000 16,500 3% Sponsor fees 149, ,500 3,000 2% Registration fees 614, ,222 67,420 12% Contract revenue 262, ,123 (1,352) -1% Admin service reimbursements 363, ,579 (332,797) -48% Admin service fees 51,907 85,082 (33,175) -39% Interest revenue 60,592 55,971 4,621 8% Miscellaneous revenue 147,679 16, , % Total revenues 3,030,123 3,173,192 (143,069) -5% Expenses Salaries and employee benefits 1,367,093 1,335,103 31,990 2% Admin service expense 365, ,087 (332,407) -48% Meeting expense 653, , ,866 52% Travel reimbursements 108,922 96,630 12,292 13% Rent expense 70,297 69,297 1,000 1% Consultant services 80,990 63,520 17,470 28% Supplies expense 32,741 50,979 (18,238) -36% Consultant expense 30,734 36,019 (5,285) -15% Staff travel 46,775 35,641 11,134 31% Other expenses 158, , % Total expenses 2,915,619 2,972,987 (57,368) -2% Increase (decrease) in net position 114, ,205 (85,701) -43% Net position - beginning 2,477,741 2,277, ,205 9% Net position - ending $ 2,592,245 $ 2,477,741 $ 114,504 5% State dues are payments from states in support of NASACT. State dues decreased by $9,900, or two percent, compared to FY A few states that normally pay, did not. The NASACT Executive Committee previously voted to increase members annual dues by 3.5 percent each year, but with the recent increase in net position, the committee decided to keep dues the same. Technical service fees are funds received from states in support of NASC and NSAA. The amount of fees received increased by five percent, or $11,000. The NASC Executive Committee agreed to increase fees by $250 per state for FYs 18 and 19. NSAA fees remained the same. Corporate associates are receipts from NASACT s private sector partners in support of the NASACT annual conference. The FY 2018 and FY 2017 conferences were held in Nashville, Tennessee, and Indianapolis, Indiana, respectively. The amount of funds collected from corporate associates increased by $16,500 in 2018 compared to NASACT raised the platinum level from $40,000 to $45,000 in FY This increase and a few additional contributors created the change. Corporate associate levels are shown on page 40 in the supplemental information of this report. 15

20 Sponsor fees are payments from NASACT s private sector partners in support of the NASC and NSAA annual conferences. Total sponsor fees increased by $3,000 from Sponsors vary from year to year and are sometimes dependent upon the location and local support generated by state offices. While sponsors for the NASC Annual Conference decreased, NSAA increased support for the NSAA Annual and Information Technology conferences. Registration fees increased 12 percent, or $67,000, compared to FY Registrations for the NASACT annual conference, held in Nashville, increased by $60,000 compared to FY Registrations for the NSAA Information Technology Conference and Tennessee Training Seminars increased by $25,000 and $11,000, respectively. However, revenue from webinars decreased by $28,500. Contract revenue is a combination of payments on contracts for state training seminars and for association management services provided to the Association of Local Government Auditors, the National Association of State Retirement Administrators and the National Association of State Treasurers. Contracts with these associations increased revenue by about $10,000. However, revenue from state training seminars decreased by about the same amount. The administrative services program is comprised of two activities, NSAA s peer review program and the benchmarking program. It has two sources of revenue, administrative fees and reimbursements, the latter of which is offset by administrative service expense. Both the revenues and expenses for these activities vary based on program participation during the fiscal year. Administrative service reimbursements for peer review and benchmarking totaled $363,782 for FY 2018 compared to $696,579 for FY The organization scheduled 13 peer reviews in FY 2018 and collected $45,500 in administrative fees. In 2017, team members performed 20 peer reviews. The service fees for benchmarking amounted to $6,000 in 2018 compared to $15,000 in FY Interest revenue is generated on the Association s investments in savings and certificates of deposit. Interest revenue increased slightly from FY 2017 due to an increase in rates on certificates of deposit purchased early in FY Miscellaneous revenue increased by $131,000 from FY 17. This revenue is derived from the recognition of unearned income used to cover the costs of NASACT representatives attending meetings in support of GASB-related activities. The amount of the funds used each year varies. The Association used approximately $14,000 to cover these costs in FY NASACT also received $125,000 from the state of Tennessee to offset expenses in conjunction with the annual conference held in Nashville in August Salaries and employee benefits expenses include salaries, insurance, retirement, etc. These amounts increased by $32,000 from FY Most of the increase stems from changes in salaries and insurance costs. As discussed above, administrative service expense is a combination of expense relating to peer review and the benchmarking program. These expenses are reimbursed by states for participation in these programs. The reduction of these expenses is a result of less participation in the benchmarking activities and fewer peer reviews. Meeting expenses are associated with the conferences held throughout the year. This cost increased in 2018 by $224,000. Much of the increase, $204,000, is attributed to the NASACT annual conference. As mentioned above, the state of Tennessee donated $125,000 to cover activities and other costs. Expenses for the NASC Annual Conference also increased by $22,500 in FY 2018 compared to FY Meeting costs for other conferences remained similar to the prior year. Travel reimbursements are funds returned to attendees of the NASACT, NASC and NSAA annual conferences. The expense increased by $12,000 from FY The maximum reimbursements remained the same as FY 2017 at $1,500 for the NASACT annual and $750 for NASC and NSAA. The number of requests for all three conferences increased by 10 from FY 2017 to FY 2018 mostly for the NASC annual conference. Attendance was low at the FY 17 NASC conference due to the weather. 16

21 Rent expense is for the staff offices at NASACT s Washington, D.C. location. This expense increased slightly per the contract with the lessor. Consultant services are fees charged by professionals to perform specific services for NASACT. The fees for these services increased by about $17,500 from FY Of this amount, $15,000 is attributed to the NASACT annual conference. The remaining increase was for the annual compensation study. Supplies expense decreased by about $18,000 in FY During FY 17, NASACT purchased several new computers and furniture items which were below the capitalization threshold. Supplies also include paper, toner, cables, folders, etc., and numerous other items that aid in the everyday functions of both offices and for conferences. Consultant expenses decreased by $5,300 from FY Most of these expenses are for GASB-related activities and training seminars. While expense for GASB-related activities remained the same, state training expense decreased due to less seminars held in FY 18. Staff travel increased $11,000 from FY 17. This travel is a combination of hotel, mileage, airfare, meals, etc., for staff to attend conferences and meetings throughout the year. Most of the increase was from the NASACT Annual Conference and Lexington and DC office travel. Other expenses include office condo association fees, postage, telephone, printing, bank fees, copier rental, etc. These expenses had only a slight increase in FY 18. BUDGETARY HIGHLIGHTS NASACT s Executive Committee approves the Association s annual budget prior to the beginning of the fiscal year. NASACT s actual financial performance for FY 2018 finished above the approved budget as shown in the other information on page 29. Corporate associates were $74,500 above budget. Sponsor fees collected were $12,500 above budget. Miscellaneous revenue was $30,000 above budget. Supplies and meeting expense were higher than budgeted while travel reimbursements, salaries and benefits were lower than anticipated. NASACT s management is aware of the importance of reducing expenses and pursuing cost-saving techniques. During the past years, staff have aggressively pursued these initiatives. Recently, staff either initiated or continued the following cost-saving and revenue generating techniques: Invested excess reserves in financial instruments yielding higher returns than the operating account. Used SkyMiles for some staff travel and to bring speakers to the Emerging Leaders Conference. Switched to a different type of corporate credit card that will generate cash refunds instead of frequent flyer miles. ECONOMIC CONDITION AND OUTLOOK Current economic conditions continue to allow the Association to thrive with support by members, corporate associates, sponsors and conference registrants. For FY 2018, NASACT s budget projected a decrease in net position of $102,000; however, total revenues were higher than anticipated, which allowed the Association to finish the year with an increase of $114,504. NASACT expects to meet budget in FY

22 REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the finances of the National Association of State Auditors, Comptrollers and Treasurers to interested individuals. Questions concerning any of the information provided in this report or requests for additional information should be addressed to NASACT, 449 Lewis Hargett Circle, Suite 290, Lexington, KY 40503, (859)

23 National Association of State Auditors, Comptrollers and Treasurers Statement of Net Position June 30, 2018 ASSETS Current assets: Cash and cash equivalents $ 473,532 Investments 1,505,000 Deposits held in custody by others 4,700 Accounts receivable 95,622 Accrued interest receivable 34,167 Prepaid expenses 83,397 Restricted cash 101,311 Total current assets 2,297,729 Noncurrent assets: Investments 1,000,000 Restricted investments 750,000 Capital assets - building, net of accumulated depreciation 507,125 Capital assets - equipment, net of accumulated depreciation 25,189 Total noncurrent assets 2,282,314 Total assets $ 4,580,043 LIABILITIES Current liabilities: Accounts payable $ 85,954 Salaries payable 46,122 Employee cafeteria plan payable 550 Unearned income 1,648,545 Compensated absences 30,448 Total current liabilities 1,811,619 Noncurrent liabilities: Compensated absences 176,179 Total noncurrent liabilities 176,179 Total liabilities 1,987,798 NET POSITION Investment in capital assets 532,314 Unrestricted 2,059,931 Total net position 2,592,245 Total liabilities and net position $ 4,580,043 The notes to the financial statements are an integral part of this statement. 19

24 National Association of State Auditors, Comptrollers and Treasurers Statement of Revenues, Expenses and Changes in Fund Net Position For the Year Ended June 30, 2018 OPERATING REVENUES: State dues $ 633,000 Technical service fees 246,750 Corporate associates 499,500 Sponsor fees 149,500 Registration fees 614,642 Contract revenue 262,771 Administrative service reimbursements 363,782 Administrative service fees 51,907 Miscellaneous revenue 147,679 Total operating revenues 2,969,531 OPERATING EXPENSES: Salaries 1,103,156 Employee benefits 263,937 Supplies 32,741 Postage and handling 5,167 Communication services 14,312 Copying 3,693 Repairs and maintenance 1,437 Continuing education 625 Consultant services 80,990 Consultant expenses 30,734 Staff travel 46,775 Executive committee/president expense 11,413 Meeting expense 653,616 Travel reimbursement 108,922 Administrative service expense 365,680 Printing 16,521 Books and periodicals 628 Credit card fees 27,871 Miscellaneous 3,906 Professional membership dues 1,877 Banking service fees 730 Rent 70,297 Office condo association fees 11,200 Utilities 4,548 Janitorial services 2,489 Copier rental 5,350 Software support 13,469 Insurance 4,742 Auditing 5,796 Depreciation - building 19,197 Depreciation - equipment 3,800 Total operating expenses 2,915,619 Operating income (loss) 53,912 Nonoperating revenues (expenses) Interest and investment revenue 60,592 Interest expense Total nonoperating revenues (expenses) 60,592 Change in net position 114,504 Total net position - beginning 2,477,741 Total net position - ending $ 2,592,245 The notes to the financial statements are an integral part of this statement. 20

25 National Association of State Auditors, Comptrollers and Treasurers Statement of Cash Flows For the Year Ended June 30, 2018 Other Cash GASB Cash Total Cash CASH FLOWS FROM OPERATING ACTIVITIES Receipts from members $ 830,050 $ $ 830,050 Receipts from corporate associates 505, ,900 Receipts from sponsors 153, ,250 Receipts from participants 606, ,821 Receipts from contractors 270, ,779 Receipts from administrative service reimbursements 404, ,782 Receipts from administrative service fees 51,907 51,907 Receipts from sales of publications Receipts from cafeteria plan 8,396 8,396 Other receipts 148, ,461 Payments to vendors (1,535,184) (14,111) (1,549,295) Payments to employees (1,356,798) (1,356,798) Payments to cafeteria plan participants (7,567) (7,567) Net cash provided by operating activities 80,846 (14,111) 66,735 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of capital assets (9,350) - (9,350) Sale of capital assets - - Interest paid on capital debt Principal paid on capital lease (587) (587) Net cash used by capital and related financing activities (9,937) (9,937) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from the sale and maturity of investments 500, ,000 Purchase of investments and securities (780,000) (780,000) Interest and dividends 51,790 51,790 Net cash provided by investing activities (228,210) (228,210) Net increase (decrease) in cash and cash equivalents (157,301) (14,111) (171,412) Balances - beginning of the year 630, , ,255 Balances - end of the year $ 473,532 $ 101,311 $ 574,843 Reconciliation of operating income to net cash provided by operating activities: Operating income $ 53,912 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 22,997 Change in assets and liabilities: Decrease in accounts receivable 56,629 Decrease in prepaid expenses 12,316 Decrease in employee café plan receivable 281 Decrease in accounts payable (21,971) Increase in salaries payable 1,675 Increase in employee café plan payable 550 Decrease in unearned income (68,272) Increase in compensated absences 8,618 Net cash provided by operating activities $ 66,735 The notes to the financial statements are an integral part of this statement. 21

26 National Association of State Auditors, Comptrollers and Treasurers Notes to the Financial Statements June 30, 2018 Note 1 Summary of Significant Accounting Policies The accompanying financial statements have been prepared in conformity with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board. The Association has prepared required supplementary information titled Management s Discussion and Analysis, which precedes the basic financial statements, and other information, which includes the Budgetary Comparison Schedule, which follows these footnotes. a. Reporting Entity The National Association of State Auditors, Comptrollers and Treasurers, an unincorporated association, is an instrumentality of the states. Its mission, as set forth in its constitution, is to assist state leaders to enhance and promote effective and efficient management of government resources. Because of the Association s standing as an instrumentality of the states, its financial statements have been prepared in accordance with generally accepted accounting principles as prescribed by the GASB. b. Measurement Focus, Basis of Accounting and Basis of Presentation The Association is considered a special purpose government and reports as a business-type activity, using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Operating revenues and expenses are distinguished from non-operating items. Operating revenues and expenses result from providing services in connection with ongoing operations. Items not meeting the criteria of operating transactions are recorded as non-operating. c. Budgetary Data The annual budget for FY 2018 was prepared using the accrual basis of accounting. The Association s budget and any subsequent revisions are approved by the Executive Committee. d. Capital Assets Capital assets, which include an office building, office equipment, furniture and software, are reported on the Statement of Net Position. The Association defines capital assets as assets that have a cost of $2,000 or more at the date of acquisition and have an expected useful life of more than one year. Capital assets are depreciated using the straight-line method over the assets estimated useful lives. Estimated useful lives generally are assigned as follows: building, 39 years; equipment, 2-10 years; furniture, 5-10 years; software, 2-10 years. e. Business-Type Activity Accounting and Financial Reporting The Association applies all applicable GASB pronouncements including GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. 22

27 National Association of State Auditors, Comptrollers and Treasurers Notes to the Financial Statements June 30, 2018 f. Basis for Cash Restriction NASACT classifies cash into two categories, restricted and unrestricted. Restricted cash balances are cash amounts administered by NASACT, but imposed by law through enabling legislation, which in NASACT s case is the Executive Committee. Restricted cash balances reported in the financial statements include the balance of the past collections from the states for GASB funding. As stated in Note 6, the Financial Accounting Foundation changed the funding mechanism for the GASB in FY 2012 and the NASACT Executive Committee determined that any remaining GASB funds collected by NASACT should be retained by the Association for GASB-related activities. The Executive Committee established a policy in August 2012 specifying the appropriate uses of these funds. All other cash held by the Association is considered unrestricted for reporting purposes. Note 2 Cash and Cash Equivalents, Restricted Cash and Investments As of June 30, 2018, the Association had the following investments and securities: Deposit Type Fair Value Cash: Demand $ 574,674 Investments: Certificates of deposit 3,255,000 Total 3,829,674 Net withdrawals and deposits in transit 169 Total cash and investments in bank $ 3,829,843 Custodial Credit Risk. Custodial credit risk is the risk that in the event of a bank failure, the Association s deposits may not be returned to it. The Association s policy requires bank institutions to provide collateralization in excess of the FDIC limit. As of June 30, 2018, none of the Association s total bank deposits were exposed to custodial credit risk. Interest Rate Risk. Managing interest rate risk limits NASACT s exposure to fair value losses arising from changes in interest rates. According to the Association s investment policy, at least one third of the net financial assets of the Association may be invested in instruments with a maturity of no more than 12 months. The remainder of the assets may be invested in financial instruments with a maturity of no more than five years with adequate laddering to ensure that the average life shall be no greater than two and a half years. As of June 30, 2018, the Association had seven investments with a maturity greater than one year. 23

28 National Association of State Auditors, Comptrollers and Treasurers Notes to the Financial Statements June 30, 2018 Note 3 Accounts Receivable Accounts receivable have been aggregated and presented in the financial statements. Detailed information is presented below: Contracts $ 72,019 Peer Review 15,553 Registrations 8,050 Accounts receivable, June 30, 2018 $ 95,622 Note 4 Capital Assets The Association s investment in capital assets as of June 30, 2018, totals $532,314 (net of accumulated depreciation). This investment in capital assets includes the headquarters office, furniture, equipment and software. Capital asset activity for the year ended June 30, 2018, is summarized below: Balance Increases Decreases Balance Capital assets Building $ 748,689 $ 748,689 Furniture 14,245 14,245 Equipment 45,296 9,350 54,646 Software 19,272 19,272 Total capital assets 827,502 9, ,852 Less accumulated depreciation Building 222,367 19, ,564 Furniture 11, ,946 Equipment 28,394 3,362 31,756 Software 19,272 19,272 Total accumulated depreciation 281,542 22, ,538 Capital assets, net $ 545,960 $ (13,646) $ 532,314 Note 5 Accounts Payable Accounts payable have been aggregated and presented in the financial statements. Detailed information is presented below: Vendors $ 39,946 Reimbursements 31,474 Payroll liabilities 14,534 Accounts payable, June 30, 2018 $ 85,954 24

29 National Association of State Auditors, Comptrollers and Treasurers Notes to the Financial Statements June 30, 2018 Note 6 Unearned Income As stated in Note 1, amounts collected by NASACT for the GASB are considered restricted cash. During FY 2012, the Financial Accounting Foundation changed the method of collecting funds in support of the GASB. At June 30, 2012, the remaining funds were set aside to be used for GASB-related activities such as travel by members to GASB hearings. The balance of the account at June 30, 2017, was $865,000. During FY 2018, the association used approximately $14,000. The balance at June 30, 2018 is $851,000. The remaining $797,000 in unearned income consists of dues, technical assessments, registrations and corporate associates relating to FY Note 7 Compensated Absences Compensated absences activity for the year ended June 30, 2018, is summarized below. Of this amount, $30,448 is considered a current liability. Compensated absences, July 1, 2017 $ 198,009 Additions 13,704 Deletions 5,086 Compensated absences, June 30, 2018 $ 206,627 Note 8 Leases The following is a schedule of future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of June 30, 2018: Year Ending June 30 Office Space Copier Total 2019 $ 61,621 $ 5,196 $ 66, ,462 5,196 41,658 Total future minimum lease payments $ 98,083 $ 10,392 $ 108,475 The following schedule shows the composition of total rental expenditures for all operating leases: For the Year Ended June 30, 2018 Minimum rentals: Office space $ 70,297 Copier 5,350 Total $ 75,647 25

30 National Association of State Auditors, Comptrollers and Treasurers Notes to the Financial Statements June 30, 2018 Note 9 Retirement Plan Generally, all employees are eligible to participate in the Teachers Insurance and Annuity Association/College Retirement Equities Fund, a privately administered, defined contribution retirement plan. Participant eligibility and contributory requirements are established in the Retirement Resolution. Employees contribute five percent of gross wages and the Association contributes ten percent of gross wages. The Association will match additional employee contributions up to five percent. After an employee completes 25 years of service and reaches age 60, or after completing 30 years of service and reaching age 55, the Association contributes an additional ten percent of gross wages, for a total employer contribution of 20 percent. The Association assumes no liability other than its contributions. The plan administrator s annual report may be obtained by writing to: TIAA-CREF, 730 Third Avenue, New York, NY For the year ended June 30, 2018, the Association had a total payroll of $1,103,156 of which $1,095,874 was covered by the plan. Employee contributions for the plan years ending June 30, 2018, 2017, and 2016, were $128,055, $119,524, and $118,079, respectively. Employer contributions for the plan years ending June 30, 2018, 2017, and 2016, were $152,266, $147,627, and $153,771, respectively. Note 10 Risk Management and Insurance Coverage Association employee benefits for health, dental, long-term disability and life insurance coverage are fully insured through commercial carriers. A commercial insurance carrier provides coverage for property exposure. There were no reductions in commercial insurance coverage during the fiscal year ended June 30, The Association does not participate in any risk pools. Note 11 Disposition of NSAA Portion of Unrestricted Net Position In fiscal year 2001, the National State Auditors Association eliminated support for the training packages component of the State Auditor Training Program and designated the remaining balance of $139,547 at June 30, 2001, until further study and analysis could be performed regarding the appropriate distribution of the training packages balance. After applying the provisions of GASB 34, the designated balance was reduced to $134,884 and is reflected as a component of Unrestricted Net Position. On March 24, 2003, the NSAA Executive Committee approved a scholarship program to assist members/speakers in attending NSAA conferences. The scholarships are funded by the interest earned on the training fund; the principal will remain intact. 26

31 27 Other Information

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33 National Association of State Auditors, Comptrollers and Treasurers Budgetary Comparison Schedule For the Period Ended June 30, 2018 Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) Operating Revenues: State dues $ 640,000 $ 640,000 $ 633,000 $ (7,000) Technical assessments 246, , ,750 - Corporate associates 425, , ,500 74,500 Sponsor fees 137, , ,500 12,500 Registration fees 528, , ,642 86,092 Contract revenue 275, , ,771 (12,429) State reimbursement 308, , ,782 55,782 Administrative fees 57,240 57,240 51,907 (5,333) Sale of publications Miscellaneous revenue 117, , ,630 30,130 Total operating revenues 2,735,240 2,735,240 2,969, ,291 Operating Expenses: Salaries 1,171,432 1,171,432 1,103,156 68,276 Fringe benefits 294, , ,937 30,524 Supplies 25,530 25,530 32,741 (7,211) Postage and handling 5,275 5,275 5, Communication services 20,350 20,350 14,312 6,038 Copying 8,615 8,615 3,693 4,922 Equipment repairs/maintenance ,437 (937) Continuing education (125) Consultant services 74,000 74,000 80,990 (6,990) Consultant expenses 40,900 40,900 30,734 10,166 Staff travel 43,500 43,500 46,775 (3,275) President/executive ctte expense 2,500 2,500 11,413 (8,913) Meeting expense 590, , ,616 (63,286) Travel reimbursement 130, , ,922 21,078 Administrative service expense 308, , ,680 (57,680) Printing 9,100 9,100 16,521 (7,421) Books and periodicals 2,350 2, ,722 Credit card fees 23,800 23,800 27,871 (4,071) Miscellaneous 2,300 2,300 3,906 (1,606) Professional membership dues ,877 (1,677) Banking service fees (30) Rent 66,000 66,000 70,297 (4,297) Condominium association fees 11,500 11,500 11, Utilities 5,000 5,000 4, Janitorial services 2,500 2,500 2, Copier rental 5,500 5,500 5, Software support 15,500 15,500 13,469 2,031 Insurance 4,500 4,500 4,742 (242) Auditing 4,200 4,200 5,796 (1,596) Depreciation - Building 19,197 19,197 19,197 - Depreciation - Equipment 5,000 5,000 3,800 1,200 Total operating expenses 2,893,240 2,893,240 2,915,619 (22,379) Operating income (loss) $ (158,000) $ (158,000) $ 53,912 $ 211,912 Nonoperating revenues (expenses) Interest and investment revenue 56,000 56,000 60,592 4,592 Interest expense Total nonoperating revenues (expenses) 56,000 56,000 60,592 4,592 Change in net assets (102,000) (102,000) 114, ,504 Total net assets - beginning 2,477,741 2,477,741 2,477,741 - Total net assets - ending $ 2,375,741 $ 2,375,741 $ 2,592,245 $ 216,504 29

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35 31 Statistical Section

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37 National Association of State Auditors, Comptrollers and Treasurers Statistical Section For the Fiscal Year Ended June 30, 2018 This part of NASACT s Comprehensive Annual Financial Report presents detailed information in the areas listed below to provide a context for understanding what the information in the financial statements and notes says about the Association s overall financial health. CONTENT Financial Trend Information 34 These schedules contain trend information to help the reader understand how the Association s financial performance and fiscal well-being have changed over time. Revenue Information. 36 These schedules present information to help the reader evaluate NASACT s most significant revenue sources: membership dues, registration fees, contract revenue and the corporate associates program. Debt Information. 40 These schedules present information to help the reader appraise the Association s current levels of outstanding debt and the ability to incur debt in the future. Demographic Information 41 These schedules offer demographic and economic indicators to help the reader understand the environment within which the Association s financial activities take place. Operating Information These schedules contain operating data to help the reader understand how the information in the Association s financial report relates to the services it provides and activities it performs. SOURCES Financial information is derived from the financial statements presented in the comprehensive annual financial reports for the relevant years. Non-financial information is derived from various internal sources including, but not limited to, conference databases, source documents, and historical membership files. NOTE Due to the reporting format and definition changes prescribed by GASB Statement No. 34, information for fiscal years is provided. 33

38 National Association of State Auditors, Comptrollers and Treasurers Statistical Section For the Fiscal Year Ended June 30, 2018 Financial Trend Information - Net Position Last Ten Fiscal Years Investment in capital assets $ 532,314 $ 545,960 $ 570,125 $ 576,930 $ 602,376 $ 622,920 $ 641,048 $ 656,481 $ 685,173 $ 557,510 Unrestricted 2,059,931 1,931,781 1,707,411 1,850,381 1,918,441 1,794,055 1,744,553 1,589,040 1,390,734 1,381,001 Total net position $ 2,592,245 $ 2,477,741 $ 2,277,536 $ 2,427,311 $ 2,520,817 $ 2,416,975 $ 2,385,601 $ 2,245,521 $ 2,075,907 $ 1,938,511 34

39 National Association of State Auditors, Comptrollers and Treasurers Statistical Section For the Fiscal Year Ended June 30, 2018 Financial Trend Information - Changes in Net Position Last Ten Fiscal Years Operating Revenues NASACT operating $ 647,111 $ 659,075 $ 645,788 $ 618,699 $ 613,056 $ 592,655 $ 571,698 $ 558,051 $ 538,925 $ 543,925 Conferences 1,187, , , , , , , , , ,815 Training seminars 165, , , , , , , , , ,480 Technical services 246, , , , , , , , , ,500 Administrative services 415, , , , , ,409 1,173, , , ,407 Cooperative efforts 46,616 72,967 66, ,556 99,479 73,371 46,569 73,621 78,038 52,174 Contracts 254, , , , , ,913 90,940 86,695 73,160 69,081 Miscellaneous 6, ,342 79, ,428 11,596 12,027 11,848 Total operating revenues 2,969,531 3,117,221 2,803,553 2,676,111 2,959,854 2,759,671 3,032,563 2,537,519 1,965,994 2,319,230 Operating Expenses NASACT operating 1,006, ,305 1,103,178 1,130, , , , , , ,267 Conferences 845, , , , , , , , , ,722 Training seminars 140, , , , , , , , , ,770 Technical services 247, , , , , , , , , ,913 Administrative services 428, , , , , ,623 1,174, , , ,627 Cooperative efforts 9,635 16,057 19,820 19,463 21,915 14,680 10,555 29,097 32,109 25,673 Contracts 236, , , , , , , , ,672 88,102 Total operating expenses 2,915,619 2,972,987 3,010,409 2,817,752 2,897,007 2,770,242 2,924,329 2,421,052 1,889,880 2,386,074 Operating income (loss) 53, ,234 (206,856) (141,641) 62,847 (10,571) 108, ,467 76,114 (66,844) Nonoperating Revenues (Expenses) Interest and investment revenue 60,592 55,971 57,081 48,135 40,995 41,945 31,846 53,147 62,989 88,153 Interest expense (1,707) (8,902) Loss on disposal of assets Nonoperating income (loss) 60,592 55,971 57,081 48,135 40,995 41,945 31,846 53,147 61,282 79,251 Change in net position $ 114,504 $ 200,205 $ (149,775) $ (93,506) $ 103,842 $ 31,374 $ 140,080 $ 169,614 $ 137,396 $ 12,407 35

40 National Association of State Auditors, Comptrollers and Treasurers Statistical Section For the Fiscal Year Ended June 30, 2018 Revenue Information - Membership Dues Last Ten Fiscal Years Dues billed $ 828,900 $ 830,700 $ 811,700 $ 766,600 $ 741,450 $ 721,000 $ 726,000 $ 730,500 $ 702,000 $ 697,000 Dues paid by members 633, , , , , , , , , ,625 Membership dues per tier 1 (staff > 500) $ 5,800 $ 5,800 $ 5,600 $ 5,400 $ 5,200 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 2 (staff ) 5,200 5,200 5,000 4,800 4,700 4,500 4,500 4,500 4,500 4,500 3 (staff ) 4,600 4,600 4,500 4,300 4,100 4,000 4,000 4,000 4,000 4,000 4 (staff ) 4,100 4,100 3,900 3,700 3,600 3,500 3,500 3,500 3,500 3,500 5 (staff < 100) 3,500 3,500 3,400 3,200 3,100 3,000 3,000 3,000 3,000 3,000 NOTE The current dues structure was instituted in fiscal year

41 National Association of State Auditors, Comptrollers and Treasurers Statistical Section For the Fiscal Year Ended June 30, 2018 Revenue Information - Registration Fees Last Ten Fiscal Years Registration revenue Webinars $ 44,449 $ 72,967 $ 65,861 $ 100,556 $ 99,219 $ 72,571 $ 46,129 $ 73,027 $ 77,291 $ 50,539 NASACT 188, , , , , ,225 79,525 87,830 82, ,100 NASC 29,500 32,300 30,950 25,650 31,150 35,050 26,400 31,900 20,950 16,400 NSAA 122, , , , ,318 88,100 89,525 87,100 69,975 76,220 NSAA/NASC Emerging Leaders 73,345 51,871 46,750 37,825 42,500 43,775 32,725 27,650 36,260 31,595 Tennessee training seminars 157, , , , , , , , , ,480 Total registration revenue $ 614,642 $ 547,222 $ 581,546 $ 556,537 $ 603,977 $ 510,731 $ 417,479 $ 429,207 $ 417,951 $ 428,334 Number of conferences held Webinars NASACT NASC NSAA NSAA/NASC Emerging Leaders Tennessee training seminars Total number of conferences held Number of attendees Webinars a NASACT NASC NSAA NSAA/NASC Emerging Leaders Tennessee training seminars Total number of attendees 2,081 1,998 1,800 2,076 1,991 1,597 1,480 1,573 1,498 1,531 CPE credits issued Webinars 3,297 7,474 5,692 8,663 8,597 6,546 6,351 6,600 7,330 4,878 NASACT 2,567 1,637 2,299 1,599 1,898 1,702 1, ,630 NASC , ,110 1,247 1, NSAA 3,840 2,399 1,595 3,874 3,140 1,144 2,780 1,125 2,318 3,493 NSAA/NASC Emerging Leaders 2,256 1,792 1,880 1,500 1,710 1,836 1,344 1,102 1,590 1,433 Tennessee training seminars 8,946 7,998 8,660 8,586 9,161 9,074 8,353 7,861 7,342 8,066 Total CPE credits issued 21,888 22,277 21,225 25,011 25,616 21,547 21,182 18,596 20,427 20,065 NOTES a Registrations for webinars are by site, not by individual attendee. 37

42 National Association of State Auditors, Comptrollers and Treasurers Statistical Section For the Fiscal Year Ended June 30, 2018 Revenue Information - Contract Revenue Last Ten Fiscal Years Contract revenue ALGA $ 129,595 $ 123,428 $ 116,710 $ 110,125 $ 99,008 $ 100,844 $ 90,940 $ 86,695 $ 73,160 $ 69,081 NASRA 33,476 32,445 30,459 28,210 31,669 30,069 NAST 91,700 88,600 86,500 36,750 Training seminars 8,000 19,650 30,050 50,500 30,000 45,100 36,750 11,988 32,000 15,000 U.S. Department of State 6,029 20,742 Total contract revenue $ 262,771 $ 264,123 $ 263,719 $ 225,585 $ 166,706 $ 196,755 $ 127,690 $ 98,683 $ 105,160 $ 84,081 Types of services contracted ALGA A, C, F A, C, F A, C, F A, C, F A, C, F A, C, F A, C, F A, C, F A, C, F A, C, F NASRA A, F A, F A, F A, F A, F A, F NAST C, F C, F C, F C, F Training seminars T T T T T T T T T T U.S. Department of State A, F, T A, F, T Number of contracts ALGA NASRA NAST Training seminars U.S. Department of State 1 1 Total number of contracts KEY A C F T Administrative Conference Financial Technical 38

43 National Association of State Auditors, Comptrollers and Treasurers Statistical Section For the Fiscal Year Ended June 30, 2018 Revenue Information - Corporate Associates Program Last Ten Fiscal Years Corporate associates revenue per level Bronze $ 82,000 $ 68,000 $ 48,000 $ 60,000 $ 66,000 $ 50,000 $ 50,000 $ 55,000 $ 72,500 $ 65,000 Silver 162, , , , , , , , , ,500 Gold 75, ,000 50,000 25,000 75, ,000 25, ,000 50,000 75,000 Platinum 180, , , , ,000 90, , , ,000 90,000 Other 5,000 12,000 12,000 3,000 3,500 9,500 3,000 3,500 11,500 Total corporate associates revenue $ 499,500 $ 483,000 $ 452,500 $ 399,500 $ 472,000 $ 381,000 $ 392,000 $ 403,000 $ 370,500 $ 354,000 Corporate associates levels Bronze $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 Silver 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 Gold 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 Platinum a 45,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 Corporate associates per level Bronze Silver Gold Platinum Other Total number of corporate associates NOTES a Platinum level is $45,000 and above. This level was updated in

44 National Association of State Auditors, Comptrollers and Treasurers Statistical Section For the Fiscal Year Ended June 30, 2018 Debt Information Last Ten Fiscal Years Capital debt, beginning balance $ - $ - $ - $ - $ - $ - $ - $ - $ 159,625 $ 159,625 Capital debt incurred Capital debt principal payments 159,625 Capital debt, ending balance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 159,625 Capital debt per dues paying member $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 1,200 Capital debt incurred Capital debt principal payments Capital debt per dues paying member $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 1,200 40

45 National Association of State Auditors, Comptrollers and Treasurers Statistical Section For the Fiscal Year Ended June 30, 2018 Demographic Information Last Ten Fiscal Years Membership by category Auditor Comptroller Treasurer Total membership Operating Information - Full-Time Equivalents Last Ten Fiscal Years NASACT operating Conferences Training seminars Technical services Administrative services Cooperative efforts Contracts Total full-time equivalents

46 National Association of State Auditors, Comptrollers and Treasurers Statistical Section For the Fiscal Year Ended June 30, 2018 Operating Information - Employee Count Last Ten Fiscal Years Total employee count Operating Information - Capital Assets Last Ten Fiscal Years Capital assets by classification Building $ 507,125 $ 526,322 $ 545,519 $ 564,715 $ 583,913 $ 603,111 $ 622,309 $ 641,505 $ 660,703 $ 679,900 Furniture 2,299 2,736 3,173 4,104 5,528 3,054 5,029 7,006 9,274 11,543 Equipment 22,890 16,902 21,433 8,111 11,937 13,759 13,710 7,970 12,650 17,392 Software 998 2,996 2,546 8,300 Total capital assets by classification $ 532,314 $ 545,960 $ 570,125 $ 576,930 $ 602,376 $ 622,920 $ 641,048 $ 656,481 $ 685,173 $ 717,135 Building Square footage 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 Equipment Laptops Desktops Servers Software applications

47 Office of the Washington State Auditor Pat McCarthy INDEPENDENT AUDITOR S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Executive Committee and Members R. Kinney Poynter, Executive Director National Association of State Auditors, Comptrollers and Treasurers Lexington, Kentucky We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the National Association of State Auditors, Comptrollers and Treasurers (NASACT), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise NASACT s basic financial statements, and have issued our report thereon dated October 4, INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered NASACT s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of NASACT s internal control. Accordingly, we do not express an opinion on the effectiveness of NASACT s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of NASACT s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 43 Insurance Building, P.O. Box Olympia, Washington (360) Pat.McCarthy@sao.wa.gov