Dec 19-Jan 20 Advisor

BUDGETING

16 CEA ADVISOR DECEMBER 2019 – JANUARY 2020

CEA BUDGET SUMMARY: STRATEGIC PLAN AND BUDGET HIGHLIGHTS FOR FISCAL YEAR 2019-2020

2019 CEA Financial Report/ Treasurer’s Statement 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, P.C., of Hartford, to perform the audit. Representatives of Whittlesey, P.C., presented the audit report for the fiscal year ending June 30, 2019, to the CEA Board of Directors in September 2019. The auditors presented an overview of the report and made no recommendations for changes in CEA’s accounting practices.

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 2019- 2020 is balanced with estimated income and expenses of $22,099,581. The approved budget includes a contingency expenditure of $30,000. The current membership level is based on a full- time equivalent (FTE) membership of 36,159 (1,839 FTE increase from last year). Existing programs were reviewed to help limit the dues impact as much as possible. The increase in income of $1,151,161 was due to the increase of FTE membership and the increase in income from Capitol Place rent. Some program reductions were made to offset increased expenditures in other areas. The program expense budget increased by $275,500, and personnel expenses increased by $875,661. The total increase in expenses was $1,151,161. The personnel area had an overall increase of 5.7 percent due to contractual agreements and a significant increase to the pension plan to meet the required AFTAP funding level. The net effect was a zero dollar ($0) dues increase. The following represent ongoing budget commitments as reflected in

the final 2019-2020 budget as approved by the 2019 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, New Teacher Conference, and Summer Leadership Conference • 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 • Maintain 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 UniServ field offices • Legal representation for our members

David Jedidian CEA Treasurer 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 $2 million due to an increase in investment income, membership, and NEA income • Net expense savings of $1 million • Non-cash depreciation expense of $800,000 • Pension and post-retirement insurance liability increase of $3 million due to change in discount rate • The financial statements reflect a $2.4 million increase in net assets for the year CEA’s crisis reserve is $9.66 million and designated reserve balances are $2.51 million as of June 30, 2019. Whittlesey, P.C., 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 increased, total income increased, and expenses were within or below 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.

U.S. Postal regulations require that the CEA Advisor Statement of Ownership be published annually.

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