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Fiscally Sound ASA Looks Forward to Further Growth
 he
future health of any organization can often be predicted
by its financial condition. I am pleased to announce
that once again ASA has had a banner year economically.
Our assets are greater now than at any time in our
history, and in spite of a deficit budget projected,
our audited year-end results indicate more than a
$1 million surplus. The surplus was due to the diligence
of various committees and task forces in controlling
their individual budgets.
ASA’s mission, however, is not to simply accumulate
assets but rather to promote anesthesia research,
education, patient safety and the advocacy of our
medical profession — anesthesiology. The growing
ASA assets provide a means to achieve our mission.
For the year 2006, the ASA budget continues to grow
significantly as we increase funding for our Foundations
and begin many new initiatives that are directed at
furthering the core values of ASA and its members.
Ensuring that ASA has the resources to accomplish
its goals is the job of the Section on Fiscal Affairs.
Not content to bask in past fiscal successes, the
Section has been actively taking on new challenges
to ensure ASA’s financial viability far into
the future. Some of the issues the Section on Fiscal
Affairs has been dealing with either directly or in
consultation with other Task Forces are:
Changes in the ASA Travel and Per-Diem Reimbursement
Policy
In October 2004, ASA President Eugene P. Sinclair,
M.D., assigned a task force to re-evaluate the ASA
Travel and Reimbursement Policy, which had been in
place essentially untouched for almost 50 years. The
charge given to the task force was first and foremost
to bring fairness to this policy; second, to bring
the policy in line with what other organizations provide;
and third, if possible, to improve ASA’s financial
status. The existing policy, based on a formula using
first-class airfare as the primary source for reimbursement,
essentially ensured that some ASA travelers would
be over-reimbursed for their travel while others would
not have their basic expenses covered.
The task force, with input from the Section on Fiscal
Affairs, developed a policy that ensures equity for
ASA travelers, no matter what distance they travel.
This new policy also will bring ASA travel reimbursement
policies more in line with that of other organizations.
By covering coach airfare, hotel room expenses and
a per diem, the new policy protects those ASA travelers
who previously had ended up with a loss when doing
ASA business. Does the policy make up for the huge
amount of expended time and effort provided by those
volunteering for ASA? The answer is a definite no.
There were strong feelings that the primary strength
of ASA is in the many wonderful and capable people
willing to come forth and volunteer their time and
effort to ASA, based on their commitment to our specialty.
It would be impossible to create an economic mechanism
to make up for the lost time that these volunteers
take from their practices. The new policy, however,
will make it easier for those traveling on ASA business
to have, at least, their expenses covered. Will ASA
save a lot of money with this new policy? Running
the initial numbers indicates that ASA will most likely
break even with this new policy, but the primary advantage
is that it finally brings fairness to the entire travel
and reimbursement policy. In order to keep this policy
current with the needs of the membership, the Section
on Fiscal Affairs promises ongoing review and modification.
You can be assured that it will not be another 50
years before the Section on Fiscal Affairs reassesses
this policy!
Diversification of Asset Classes
In the early 1990s, ASA decided to leap into the stock
market for investing a portion of its assets. The
leap was controlled, and the result was investment
in a single large cap growth fund. This fund has done
quite well over the years, but the Section on Fiscal
Affairs, checking on the some $30 million ASA has
in this fund, noticed sudden swings in ASA assets
of more than $1 million from month to month. Based
on increasing concerns as to the safety of having
ASA assets limited to only a bond fund and a single
large cap growth fund, a financial advisor from Deloitte
and Touche was hired to provide an analysis of ASA
investments and work with the Section on Fiscal Affairs
to develop a new Investment Policy Statement.
After numerous telephone conferences, the Section
on Fiscal Affairs has agreed to an approach that is
considered moderately conservative. Over the next
year, the Section will redistribute ASA assets into
a more diversified portfolio that will bring greater
stability to ASA’s holdings as well as provide
a more consistent return on invested assets. With
more than $50 million in assets, the Section on Fiscal
Affairs also has requested that ASA hire a financial
consultant to oversee the managers involved in the
new diversified investment classes and to work directly
with the Section of Fiscal Affairs to ensure that
the Investment Policy Statement is followed.
Spendable Account
As mentioned earlier, the purpose of ASA assets is
not simply to have them grow. The assets are there
to carry out ASA’s missions. One way to make
income from assets become part of the working capital
that can be utilized for various important projects
is to designate some of the expected and historic
returns on investments as a line item in the income
portion of the revenue/expense sheet. The recommendation
of the Section on Fiscal Affairs is to use a very
conservative 2.5 percent of $40 million in ASA assets,
or $1 million, as a Spendable Account in the 2006
budget. For the 2007 budget, there will be a new Administrative
Procedure governing how the amount of the Spendable
Account will be determined, based on the past three
years’ total investment returns and the immediate
past three years’ total assets.
Our job is ongoing as we are continually challenged
with projects, both new and old, that we must deal
with effectively in order to ensure the future financial
health of ASA.
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