August 1999
Volume 63 |
Number 8
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ADMINISTRATIVE UPDATE
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| Ensuring Resources
for Society to Carry Out Its Mission |
Orin F. Guidry, M.D., Treasurer
The responsibility of the Treasurer and the Section on Fiscal
Affairs is to prudently manage the Society's resources rather
than to actively decide how those resources are used. Our charge
is to ensure that the Society has the assets it needs to carry
out our scientific, educational, patient safety and political
missions.
An excellent example of this ability occurred in 1998
and 1999 when ASA was faced with the possibility of a change in
the Health Care Financing Administration regulations and was able
to spend a substantial amount of money on the Medicare Patient
Advocacy Program. The expense had not been foreseen, but ASA was
able to make this considerable effort because of past prudence
and discipline. It is vital to have the financial strength to
meet these unanticipated challenges.
The Section on Fiscal Affairs consists of the Treasurer,
the Assistant Treasurer and members of the Committee on Finance
of the Board of Directors. The current members are Roger A. Moore,
M.D., Roger W. Litwiller, M.D., Richard P. Albertson, M.D., Timothy
E. Baldwin, M.D., Jan Ehrenwerth, M.D., Jimmie D. Moore, M.D.,
and me.
The charge to the Section is to be "responsible to the
Board of Directors for all matters concerning the fiscal affairs
of this Society." In practice, the Section usually meets twice
each year. At each meeting, the Section hears a report from ASA's
portfolio manager, considers the investment fund's performance
and discusses the portfolio's management and philosophy. The Section
also meets annually with representatives of the accounting firm
that audits the Society and reviews its report and management
letter. Currently, ASA uses Arthur Andersen for its annual audit.
The Section also studies other financial matters and makes recommendations
to the Board. Recent examples of such issues include the President's
honorarium, funding of the related foundations and advertising
revenue from the journal. The Committee on Finance also serves
as a reference committee at the Board of Directors' meetings and
hears all reports relating to fiscal affairs.
Because of prudent budgeting and management over a long
period of time, ASA has accumulated money when revenue exceeded
expenses. This money is in two vehicles. The first is the common
stock portfolio mentioned above that has been managed by the Chicago
Trust Company since 1991. The guidelines are that 70 to 100 percent
of the fund will be in equities and that its cash equivalents
will never exceed 30 percent. The fund usually holds 40 to 50
different stocks. For the five years ending in 1998, the funds
annual performance was 25.5 percent compared to the S&P 500
Index of 23.9 percent. The Society also has a Northern Advantage
Account that is primarily in fixed income investments. Adding
these two accounts together gives an asset allocation of approximately
25 percent fixed income and 75 percent equities.
The annual budget is prepared by the Administrative Council
from budget requests submitted by each Section and Committee and
from information provided by the Executive Office. The budget
for the following year is initially approved at the Annual Meeting
of the Board of Directors in August, with final approval by the
House of Delegates in October. The current year's budget is often
amended at the March Board of Directors meeting when proposals
with a fiscal impact are approved. In spite of the fact that changes
are made at the Administrative Council and Board levels, ultimate
fiscal authority rests with the House of Delegates. A long-established
principle is that each annual budget stands alone. This means
that each House of Delegates makes the spending decisions for
the following year but cannot commit future Houses to expending
money for a given project.
All financial reports in the House of Delegates Handbook
are numbered either 450 or 451. The handbook is where you can
find Income and Expense Statements and Balance Sheets for the
Anesthesia Patient Safety Foundation, the Foundation for Anesthesia
Education and Research and the Wood Library-Museum of Anesthesiology.
You can also find ASA's current year's budget as amended, the
next year's budget submitted for House approval, the Statement
of Income and Expenditures for the current year and the Balance
Sheet.
On the surface, the budgeting process seems like a tedious,
prosaic and arcane exercise. Budgets, however, are not bureaucratic
or accounting make-work. A budget is the master plan of how
an organization intends to expend its resources and how it orders
its priorities.
Get involved in the ASA, become a delegate, pay attention
to the reports with numbers 450 and 451, and make sure that ASA
is going where you want it to go.
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