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BY FRANCIS A. ADEWALE
Believe it or not, by the time you read this update we will be past the midpoint of this fiscal year. 2024 has been a year of growth and great development for your Bar Association. For those in the WSBA Finance Department and on the Budget and Audit Committee, the March 31, 2024, financials mark the end of the second quarter of fiscal year 2024. With 50 percent of the year complete, the WSBA general fund is outperforming earlier budget predictions with revenue ahead of budget, indirect expenses on target, and direct expenses under budget. The general fund net income is $1,381,357 as of March 31. Below is a summary of the information presented at the May Budget and Audit Committee meeting, with the major variances and estimates moving forward highlighted:
General fund revenue is up
General fund revenue is ahead of budget at 56 percent (+$1,339,758). Variances include higher bar exam fees, law clerk fees, and donations from the Washington State Bar Foundation. These variances are a result of timing of collection, and the general fund will likely come in on or slightly ahead of budget at the end of the fiscal year. For example, collection of fees for the July 2024 bar exam concluded in May. Additionally, the Bar Foundation provides annual funding, and the full amount of budgeted funds has been collected for the year as of March.
As reported in the April/May issue of Bar News, where the focus was on Q1 results, we continue to collect interest income revenue and revenue from new member product sales, which are both ahead of the annual budget, and the FY 24 reforecast includes an additional $250,000 for interest income to account for higher performance. WSBA license fees are the main source of revenue and as of March are on budget. Two additional areas that are tracking ahead of budget are Mandatory Continuing Legal Education late fees and Pro Hac Vice fees. Revenue from these areas can be difficult to predict as they are dependent upon external party actions.
General fund expenses are under budget
General fund expenses are under budget by 2 percent (-$555,736), primarily as a result of underspending in the WSBA’s direct expenses—which are program costs such as board/council/task force meetings, event expenses, supplies, staff travel, etc. These expenses can vary depending on the timing of activities. It is normal for the WSBA’s direct expenses to run under budget in the first half of the fiscal year. We expect spending in these areas to increase as we move into the second half of the fiscal year. Indirect expenses, which are the bulk of the WSBA’s costs, are on budget at 50 percent as of March. Indirect expenses consist of salaries, payroll taxes, and employee benefits, and other indirect/overhead expenses (such as rent, insurance, office supplies, etc.).
CLE FUND REVENUE AHEAD OF BUDGET
This fund, which includes CLE seminars, CLE products, and Deskbooks, has budgeted a surplus of $157,341 for FY 24. March 31 results reflect an actual surplus of $371,577. Revenue is higher than budget by 13 percent (+$219,160) caused by the residual impact of high seasonal product sales from December. Expenses overall are under budget by 5 percent (-$73,747), mostly due to lower expenses from timing of direct expenses that have not been incurred yet for seminars held later in the fiscal year and higher indirect expenses for employee medical benefits.
CPF REVENUE AHEAD OF BUDGET
The Client Protection Fund (CPF) budgeted a use of reserves of $92,700 for FY 24. Actual results as of March 31 reflect a surplus of $585,648. Revenue is over budget for the year by 14 percent (+$83,506) for all sources. Interest income, as noted under the general fund, is higher because of steady interest rates, and the FY 24 budget reforecast includes $120,000 to account for the increase. Almost all member assessments have been collected for this year, so there should be minimal additional revenue collected during the remainder of the year. Overall expenses are under budget by 23 percent (-$250,528), mainly because direct expenses for gifts to injured clients are paid out toward the end of the fiscal year.
expenses lower for The Sections fund
This fund represents the collective total of financial activity for all 29 Sections. Sections budgeted a loss of $328,603 for FY 24. Actual results as of March 31 reflect a surplus of $116,548, mainly from higher Section dues revenues caused by timing of collection, and we expect this to come in on budget. This revenue source is collected primarily in January and February and supports Sections for a full membership year (January-December), which is different from the WSBA’s fiscal year (October-September). Therefore, at the end of each fiscal year, we allocate one quarter of the dues (for October-December) to the following fiscal year to account for the difference between the membership year and fiscal year. Expenses are also lower and impacted by the timing of programming and Section activities, which are planned at various times throughout the year.
Now, as your Bar treasurer for the past two years, I could pretend to be the Hercules that made all this happen, but I would be lying to you—I wouldn’t do that. The Washington State Bar Association is blessed to have an incredibly professional, ethical, and hardworking staff. When I attend bar leaders’ conferences and listen to the challenges other bar leaders face, both administratively and financially, I exult with gratitude for our competent and conscientious staff. Don’t get me wrong, we are not perfect and we face a lot of headwinds, but our challenges pale in comparison to what others are dealing with. It all comes down to fundamentals: a rigorous enforcement of fiscal policies, an adroit commitment to equity, and a disciplined approach to budget and audit. For these reasons, please join me in commending Director of Finance Tiffany Lynch and the rest of the WSBA Finance Department. They work behind the scenes to produce accurate and timely financial reports, review expense reports, and develop the annual budget, budget reforecasts, and reallocations. They perform fiscal analyses on every action of the Board, guide the Board through the annual budget retreat, manage the WSBA’s investment portfolio, and have worked hard in negotiating our lease and other property interests. They along with other departments at the WSBA are the real STARS of the organization. Join me in commending their perseverance, grit, and determination to keep the WSBA fiscally sound.
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If you would like more information about the meeting times and materials for the WSBA Budget and Audit Committee, visit www.wsba.org/Legal-Community/Committees-Boards-and-Other-Groups/budget-audit.
About the authoR
Francis Adewale is the WSBA treasurer and can be reached at: