Treasurer’s Report

To NSPE Board of Directors

July 28, 2007

Overview

Report looks at Operating Results for our fiscal year ended June 30, 2007

Challenges we face in meeting budgetary goals in the new fiscal year

Mixed Results

On a consolidated basis, the Society achieved a net operating surplus of $72,332

NICET achieved a substantial surplus of $329,488

NSPE General Fund incurred a deficit of $270,289

Consolidated Results

-$300,000

-$200,000

-$100,000

$0

$100,000

$200,000

$300,000

$400,000

NICET NSPE Other

Surplus (Deficit) NICET Surplus $329,488

NSPE Deficit ($270,289)

Consolidated Surplus

$72,332

NSPE General Fund Results

The following slides address the three major components of NSPE operations and their impact on the operating deficit:– Revenue– Direct Program Expenses– Staff & Administrative (support) Costs

General Fund Operating Results

$0.0

$1,000.0

$2,000.0

$3,000.0

$4,000.0

$5,000.0

$6,000.0

$7,000.0

$8,000.0

Revenue Expense Staff &Admin

Budget Actual Variances

Revenue($272.9)

Expense 257.2

Staff/Admin (198.1)

Breakdown of Revenue(in millions)

$3.3

$3.6

$3.3

$3.9

$3.0 $3.2 $3.4 $3.6 $3.8 $4.0

Non-Dues

Dues

Actual Budget

Dues Revenue

Dues revenue shortfall of $266,700

2007 shortfall: a significant variance from budget, but loss in membership is less than in previous two years. (trend bottoming out?)

Following chart shows 5-year trend in dues revenue.

5-Year Dues Revenue Trend

$3,400.0

$3,500.0

$3,600.0

$3,700.0

$3,800.0

$3,900.0

$4,000.0

'03 '04 '05 '06 '07

Dues

Change by Year

2004 $ 24,400 2005 (135,900) 2006 (201,000) 2007 (37,200)

No changes to dues rates

Non-Dues Revenue

In essence, we achieved our budget of $3.3 million in non-dues revenue

There were significant variances in individual programs, but they tended to offset one another.

Following charts provide more details on non-dues revenue.

Non-Dues Revenue Components

22%

18%

10%7%6%

37%

AffinityProducts

HQ Rentals

Contract Docs

Job Board

Convention

All Other

Non-Dues Revenue Programs Results for Top 5

Budget Actual Variance

Affinity Prods 717.9 738.1 20.2 HQ Rentals (1) 608.7 590.4 (18.3) Contract Docs (2) 400.0 342.0 (58.0) Job Board 75.0 219.4 144.4 Convention (3) 345.5 212.6 (132.9)

1. A 5th floor suite vacant for 2 months 2. Publication of new documents delayed 3. Attendance down 33% from prior year

Expenses

Overall, expenses were controlled. Total expenses were $59,117 less than

budget Direct expenses were $257,217 less than

budgeted Staff & Administrative costs were $198,100

over budget

Direct Program Expenses

$257,217 in savings were spread throughout almost all programs

Savings achieved in spite of spending that was not budgeted for:– SSEC / National Staff Retreat $26,000– Jump Start Fund Requests $61,400– Conclusion of Member Survey $17,100– Executive Search Committee $11,000

Staff & Support Costs

Overrun of $198,100 is due to several factors:– Heavy reliance on temps, especially in first

months of year, to clean up the dues processing backlog and get us back on track.

– Severance package to former Executive Director– Rapid growth of online transactions, especially

dues payments (credit card fees range from 2.75% to 4% of transaction total)

Conclusion

Trends identified in earlier reports continued through the fourth quarter of operations

We continue to experience a revenue decline, and this was the major factor in sustaining the FY 2007 operating deficit.

Looking Forward

Our major challenge is to increase current revenue streams and to find new ones

We budgeted for flat dues revenue in 2008, carrying the 2007 budget forward

The actual shortfall of $266,700 in dues revenue presents a stiff challenge to make up for in our new year.

We must recruit aggressively & be cautious in our spending.

Recommendation

That a transfer be approved from the NSPE Reserve Fund to the NSPE Operating Fund that is sufficient to cover the fiscal year 2006/07 operating deficit, approximately $270,289.