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Annual Treasurer's Report 2006

By Charles E. Robertson, Treasurer
Fall 2006 (Originally published in the Announcer)

Each year, toward the end of the summer the treasurer is asked to prepare the annual financial report to be published in the Fall Announcer. This year’s report has a couple of items you might find interesting in addition to the standard report from our annual audit.

As I write this in August, the head of our accounting department, Fran Smith, has just submitted her resignation effective at the end of August to join the staff of the American Association of Community Colleges. She has been an extremely valuable person in the executive office. Along with the normal accounting skills she has, she brought knowledge of grant accounting to our office and that by itself was a sorely needed expertise. I certainly will miss her. She freely answered all of my questions about the budget, some of which must have seemed pretty basic to her. And she was always prompt in replying to my last minute requests for data to include in the reports that go to the Executive Board, the Bauder Endowment Fund Committee, the Venture Fund Committee, and others. Unfortunately her leaving comes just as the budget for 2007 is being developed. Warren Hein, the association’s Associate Executive Officer, will be doing a yeoman’s job to get this budget prepared for the Executive Board’s approval at our October meeting.

Another important change in the financial status of the association is the hiring of a new executive officer (EO). Toufic Hakim began the job on September 5, 2006, and Bernie Khoury became our EO Emeritus. When Bernie Khoury announced his future retirement, the board saw the wisdom in keeping him as the EO Emeritus to help with the transition. So in 2007 we will have salaries for both an EO and an EO Emeritus.

Hiring a new executive officer was considered by your Executive Board to be very important (and you probably agree) and were willing to support the search financially. We hired a firm that specialized in searching for outstanding people to fill important positions such as university presidents and executive officers for a wide range of organizations. It was this company that found Hakim, so we feel that their charges were well worth it.

As Toufic begins making his impact on AAPT, he anticipates the beginning of new initiatives. While he has not yet unveiled his initiatives, it is certain that they will need “seed” money. This money will most likely not be included in our operations budget, but will be taken from our long-term reserve. That is why we have this reserve. His requests will not be long term however, and I expect that the initiatives will be self supporting in a couple of years.

A fund-raising program has begun and will continue for several years (unless someone with very deep pockets steps up sooner). The first thing we would like to do is to endow our awards. The money for these awards have always been taken from our operations budget, so if we can endow the prizes we will be able to have either a smaller budget or have additional programs that will help teachers and students alike. You will be hearing more about this from other sources.

In 2006, Charlie Holbrow accepted the position and challenge of becoming the Association’s Senior Staff Physicist. His goal was to investigate how AAPT could better serve the four-year colleges and universities. He designed and conducted several successful workshops. This position will continue with a new Senior Staff Physicist beginning sometime in the fall.

All of these items will help AAPT reach its goals and will impact the financial status of the Association. They will completely unbalance our operating budget, and the board recognizes this. Therefore the Executive Board is prepared to draw down our long-term reserve to cover these initial costs. The problem is we don’t know exactly how much this will cost, so you will have to follow the Treasurer’s Reports in the future to see what the impact is.

Now, for the more mundane part of this report. The firm of Rubino & McGeehin again audited our books and found that the financial statements of the association gave an accurate picture of our financial status. That means you can examine our financial statements found on the following pages with confidence.

The graph on page 33 (fig. 1) represents our assets for the period 1999–2005 in several categories. I have also included the Dow Jones Industrial Average for the same period. (You need to multiply the DJIA times 3 to get the actual value.) You can see that the main constituent of our total asset is our investment in unrestricted funds. These investments pretty much reflect the status of the financial market in general. The dip seen in 2005 is due to money we withdrew from our long-term account to pay for some of the items listed in the paragraphs above.

So, we know how 2005 turned out and are in the midst of 2006. We are working on the 2007 budget. We have a new EO and maybe a new accountant. Decisions are being made by your Executive Board. And life goes on.

If you have any questions about these financial statements or the financial status of the organization please feel free to email me at chuckr@u.washington.edu.

—Chuck Robertson