18 CEA ADVISOR DECEMBER 17 - JANUARY 18 BUDGETING The CEA Constitution, Article X, Section D.3, requires a summary of the adopted CEA budget to be published in an official CEA publication. The budget for fiscal year 2017- 2018 is balanced with estimated income and expenses of $22,479,790. The approved budget includes a contingency expenditure of $30,000. The current membership level is based on a full- time equivalent (FTE) membership of 36,810 (100 FTE increase from last year). Existing programs were reviewed to help limit the dues impact as much as possible. The increase of $199,169 in the income budget from NEA, Capitol Place rent, and the 100 additional FTEs in membership helped cover the $383,219 increase in total expenses. Some program reductions were made to offset increased expenditures in other areas. The program expense budget decreased by $27,000, yet the personnel budget increased by $410,219. The personnel area had an overall increase of 2.6 percent due to contractual agreements and staff reorganizing. The net effect was a five-dollar ($5) dues increase. The following represent ongoing budget commitments as reflected in the final 2017-2018 budget as approved by the 2017 CEA Representative Assembly: • Local Enrichment Grant Program, including the Urban Intern Program • Resources for NEA state delegate expenses associated with the NEA RA • CEA/NEA Orientation and Summer Leadership Conference • New professional staff position to consult with locals on health insurance CEA BUDGET SUMMARY: STRATEGIC PLAN AND BUDGET HIGHLIGHTS FOR FISCAL YEAR 2017-2018 CEA is required by its Constitution, Article V, Section E.12, to present an annual financial report to the membership. CEA retained the firm of Whittlesey & Hadley, P.C., of Hartford, to perform the audit. Representatives of Whittlesey & Hadley presented the audit report for the fiscal year ending June 30, 2017, to the CEA Board of Directors in September 2017. The auditors presented an overview of the report and made no recommendations for changes in CEA’s accounting practices. The final audit report indicates that CEA adheres to generally accepted accounting principles that follow the recommendations of the Financial Accounting Standards Board in its Statement of Federal Accounting Standards (SFAS) No. 117, Financial Statements of Not-for- Profit Organizations. CEA was issued a favorable audit opinion. Key factors in the financial statement are: • Income gain of $865,000 due to an increase in investment income, membership, and NEA income • Non-cash depreciation expense of $700,000 • Net actual income over actual expenditures was a $442,000 profit • Pension and post-retirement insurance liability decrease of $1.8 million due to change in discount rate, gain in investment income, and additional contribution to pension plan CEA Treasurer Tom Nicholas 2017 CEA FINANCIAL REPORT/ TREASURER’S STATEMENT • The financial statements reflect a $1.5 million increase in net assets for the year CEA’s crisis reserve is $8.5 million, and its total undesignated reserves as of June 30, 2017, are a negative $21 million. Whittlesey & Hadley also audited the Connecticut Education Foundation, Inc. (CEF), the Connecticut Education Association Political Action Committee (CEA-PAC), and the Health and Welfare Benefit Plan. They found that all of these entities also conformed to generally accepted accounting principles, and all received positive audit opinions. In summary, this year’s audit report reflects CEA as a financially stable organization. CEA’s accrued pension and other post-retirement liabilities decreased, total income increased, and expenses were within budget. The actuarial calculations are all standards with the adoption of the Federal Account Standard (FAS) 158. Total operating income other than investments and total expenses remained well within the budget. Even in these difficult times CEA will continue to strive to provide organizational consistency and maintain a solid financial position for the future of the organization. • Resources related to professional issues for new and experienced teachers • Retirement workshops for members and resources to assist locals hosting retirement workshops • Resources for members to attend minority special interest caucus meetings • Resources for building coalitions for political involvement • Contractual obligations, including staff salaries and insurance benefits • Maintenance of appropriate computer and communication technology within CEA, as well as a disaster recovery site • Property management and maintenance of CEA building • Operation and staffing of five UniServ field offices • Legal representation for our members U.S. Postal regulations require that the CEA Advisor Statement of Ownership be published annually.