2007-2006 June 30 The Florida Bar Financial Statements

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The Florida Bar and Subsidiaries
Financial Statements and
Supplemental Information
June 30, 2007 and 2006
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Table of Contents
June 30, 2007 and 2006
Independent Auditors' Report 1 - 2
Management's Discussion and Analysis 3-7
Financial Statements
Consolidated Statements of Net Assets 8
Consolidated Statements of Revenues, Expenses, and Changes in Net Assets 9
Consolidated Statements of Cash Flows 10- 11
Notes to Consolidated Financial Statements 12 - 27
Supplementary Information
Consolidating Statement of Net Assets as of June 30, 2007. 28 - 29
Consolidating Statement of Revenues, Expense and Changes
in Net Assets for the year ended June 30,2007. 30
Consolidating Statement of Cash Flows for the year ended
June 30, 2007. 31 - 32
General Fund Schedule of Budgeted and Actual Revenues and Expenses
for the year ended June 30, 2007. 33 - 41
General Fund Reconciliation of Revenues and Expenses on a Budgetary Basis to
Totals Per the Consolidating Schedule of Statement of Revenues, Expenses
and Changes in Net Assets for the year ended June 30, 2007. 42
Clients' Security Fund Schedule of Budgeted and Actual Revenues and
Expenses for the year ended June 30, 2007. 43
Certification Fund Schedule of Budgeted and Actual Revenues and Expenses
for the year ended June 30, 2007. 44
Sections Fund Schedule of Budget and Actual Revenues and Expenses for the
year ended June 30,2007. 45 - 46
Other Reports
Report on Internal Control Over Financial Reporting and On Compliance and
Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards 47 - 48
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CARR, RIGGS &INGRAM, LLC
1713 Mahan Drive
Tallahassee, FL 32308
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PI 850 878 8777
FI 850 878 2344
www.cricpa.com
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American Institute of
Certified Public Accountants
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Alabama Society of
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Florida Institute of
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Georgia Society of
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Mississippi Society of
AICPA Alliance for CPA Firms
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Center for Audit Quality
g ~ C R I
CAR R
RIGGS &
INGRAM
Independent Auditors' Report
Board of Governors
The Florida Bar
Tallahassee, Florida
We have audited the accompanying consolidated financial statements of the business
type activities of The Florida Bar and Subsidiaries (The Florida Bar) as of and for the
years ended June 30, 2007 and 2006, which comprise The Florida Bar's basic financial
statements as listed in the table of contents. These financial statements are the
responsibility of The Florida Bar's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in
the United States of America and the standards applicable to financial audits contained
in Government AUditing Standards, issued by the Comptroller General of the United
States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in
all material respects, the financial position of the business-type activities of The Florida
Bar and Subsidiaries as of June 30, 2007 and 2006, and the changes in financial
position and cash flows thereof for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report
dated October 4, 2007, on our consideration of The Florida Bar and Subsidiaries'
internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an
opinion on the internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
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I Board of Governors
The Florida Bar
Page 2
The management's discussion and analysis on pages 3 through 7 are not a required part of the
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basic financial statements but is supplementary information required by accounting principles
generally accepted in the United States of America. We have applied certain limited
procedures, which consisted principally of inquiries of management regarding the methods of
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measurement and presentation of the required supplementary information. However, we did not
audit the information and express no opinion on it.
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Our audits were performed for the purpose of forming an opinion on the consolidated financial
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statements that collectively comprise The Florida Bar and Subsidiaries' basic financial
statements. The supplementary information as listed in the table of contents, is presented for
the purposes of additional analysis and is not a required part of the basic consolidated financial
statements of The Florida Bar. Such information has been subjected to the auditing procedures
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applied in the audit of the basic consolidated financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic consolidated financial statements taken as
a whole.

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October 4, 2007
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Management's Discussion and Analysis
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The Florida Bar is the statewide professional and regulatory organization for lawyers with more
than 81,500 members. Headquartered in Tallahassee, The Florida Bar is a unified state bar by
rule of the Supreme Court of Florida. Membership in The Florida Bar is a necessary component of
Supreme Court of Florida regulation of all lawyers licensed to practice law in Florida (Article IV,
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Section 15, Florida Constitution). The foundation for the organization is built on a philosophy of
equity and ethics. Through its programs and services, the Bar supports this philosophy with four
pillars that function as the mission of The Florida Bar: providing public service, protecting rights,
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promoting professionalism and pursuing justice.
Overview of the Financial Statements
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I This annual report consists of three parts - management's discussion and analysis, the basic
consolidated financial statements, and an optional section that presents supplementary
information. The supplementary information includes consolidating statements and comparisons of
actual results to budgeted results. The basic consolidated financial statements present the
consolidated financial position, results of operations, and cash flows of the Florida Bar and its
subsidiaries. The Florida Bar performs two overall activities as the statewide regulators of the
practice of law and the professional association of lawyers. Its activities are accounted for as a
proprietary type enterprise fund because it charges fees to provide its services similar to a
business enterprise.
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The Statement of Net Assets includes all of The Florida Bar's assets and liabilities. The net assets
are the difference between The Florida Bar's assets and liabilities. The Statement of Revenues,
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Expenses, and Changes in Net Assets include all of The Florida Bar's revenues and expenses
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regardless of when the cash is received or paid. The change in net assets is one way to measure
The Florida Bar's financial health or position. A Statement of Cash Flows provides additional
information regarding the change in The Florida Bar's cash position.
Summary of Operations
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At June 30, 2007 and 2006, The Florida Bar had $58,556,200 and $52,906,350, respectively in
total assets. Of this amount $51,221,438 and $46,034,465 was held in cash and investments and
$6,339,329 and 5,904,229 was invested in capital assets at June 30, 2007 and 2006, respectively.
The primary liability at June 30, 2007 and 2006 was deferred revenue of $9,362,874 and
$9,659,687, respectively, resulting from advance collection of member fees and prepayments for
Continuing Legal Education registrations. Our net assets were $42,327,971 and $36,311,836 at
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June 30, 2007 and 2006, respectively.
These amounts are in line with the prior year's balances given the current changes in net assets.
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The original operating budgets for the General Fund (excluding the wholly-owned subsidiary and
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controlled entities) for the years ended June 30,2007 and 2006, approved by the Florida Supreme
Court, planned on an increase in net assets of $724,991 and $482,000, respectively. After Board
of Governor amendments, the planned (decrease) increase became $(951,934) and $726,314,
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respectively. General Fund actual operations resulted in a change in net assets of $2,963, 163 and
$2,582,203, respectively. This improved performance resulted primarily from better than planned
investment returns, increased sales in continuing legal education registrations and certifications
and efficiencies in operations of the various departments of The Florida Bar. Included in the
supplemental information is an actual to budget comparison for each department.
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For the year ended June 30, 2007 and 2006, The Florida Bar's budget funded most departments at
a continuation level. A consumer assistance program was implemented in 2006-07 to centralize all
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complaint intake in Tallahassee. No other significant increased activity was implemented or
planned.
The Lawyer Regulation Department is currently in the process of restructuring and staffing its
consumer assistance program and is expected to have full implementation of the program in 2007
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08.
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CONDENSED CONSOLIDATED FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS
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June 30,
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Assets
Current assets
Capital assets, net
Total assets
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I Liabilities
Current liabilities
Other liabilities
Total liabilities
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Net assets
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Invested in capital assets, net of related debt
Restricted for scholarships
Unrestricted
Total net assets
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Total liabilities and net assets
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2007
$ 52,216,871
6,339,329
$ 58,556,200
$ 12,157,092
4,071,137
16,228,229
4,474,503
32,551
37,820,917
42,327,971
$ 58,556,200
2006 Change
$ 47,002,121
5,904,229
$ 52,906,350
$
$
5,214,750
435,100
5,649,850
$ 12,556,535
4,037,979
16,594,514
$ (399,443)
33,158
(366,285)
3,854,686
25,248
32,431,902
36,311,836
619,817
7,303
5,389,015
6,016,135
$ 52,906,350 $ 5,649,850
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CONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS
June 30, 2006 2005 Change
Assets
Current assets $ 47,002,121 $ 38,912,927 $ 8,089,194
Capital assets, net 5,904,229 6,220,716 (316,487)
Total assets
Liabilities
Current liabilities
Other liabilities
Total liabilities
$ 52,906,350
$ 12,556,535
4,037,979
16,594,514
$ 45, 133,643 $ 7,772,707
$ 9,943,975 $ 2,612,560
4,077,261 (39,282)
14,021,236 2,573,278
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Net assets
Unrestricted
Total net assets
3,854,686
25,248
32,431,902
36,311,836
3,999,660 (144,974)
25,792 (544)
27,086,955 5,344,947
31,112,407 5,199,429
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Total liabilities and net assets $ 52,906,350 $ 45, 133,643 $ 7,772,707
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For more detailed information, see the accompanying Consolidated Statements of Net Assets.
CONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
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June 30,
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Operating revenues
Operating expenses
Net operating revenues
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Non-operating revenues
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Non-operating expenses
Net non-operating revenues
Increase in net assets
Net assets, beginning
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Net assets, ending
2007
$ 39,732,682
(37,915,576)
1,817,106
4,361,648
(162,619)
4,199,029
6,016,135
36,311,836
$ 42,327,971
2006
$ 36,834,025
(33,968,523)
2,865,502
$
Change
2,898,657
(3,947,053)
(1 ,048,396)
2,505,173
(171,246)
2,333,927
1,856,475
8,627
1,865,102
5,199,429
31,112,407
816,706
5,199,429
$ 36,311,836 $ 6,016,135
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CONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
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Operating revenues $ 36,834,025 $ 35,118,962 $ 1,715,063
Operating expenses (33,968,523) (32,417,175) (1,551,348)
Net operating revenues 2,865,502 2,701,787 163,715
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Non-operating revenues 2,505,173 1,520,124 985,049
Non-operating expenses (171,246) (177,280) 6,034
Net non-operating revenues 2,333,927 1,342,844 991,083
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Increase in net assets 5,199,429 4,044,631 1,154,798
Net assets, beginning 31,112,407 27,067,776 4,044,631
I Net assets, ending $ 36,311,836 $ 31,112,407 $ 5,199,429
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For more detailed information, see the accompanying Consolidated Statements of Revenues,
Expenses, and Changes in Net Assets.
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CAPITAL ASSETS
The Florida Bar had invested the f o l l o w i n ~ in Capital Assets:
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Land $ 1,103,060 $ 1,103,060 $
Building and improvements 8,292,805 7,902,973 389,832
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Landscaping and parking 120,318 120,318
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Equipment and furnishings 4,632,356 4,456,519 175,837
Construction in progress 136,170 136,170
Total, prior to depreciation 14,284,709 13,582,870 701,839
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Accumulated depreciation (7,945,380) (7,678,641 ) (266,739)
Net capital assets $ 6,339,329 $ 5,904,229 $ 435,100
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June 3D,
Land
Building and improvements
Landscaping and parking
Equipment and furnishings
Total, prior to depreciation
CAPITAL ASSETS
2006
$ 1,103,060
7,902,973
120,318
4,456,519
13,582,870
2005
$ 1,103,060
7,877,915
120,318
4,651,072
13,752,365
$
Change
25,058
(194,553)
(169,495)
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Accumulated depreciation
Net capital assets
(7,678,641)
$ 5,904,229
(7,531,649)
$ 6,220,716 $
(146,992)
(316,487)
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Presently, The Florida Bar has no plans to significantly alter its investment in capital assets.
I DEBT
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At June 30, 2007 and 2006, The Florida Bar had $1 ,864,825 and $2,049,543, respectively
outstanding in a mortgage loan. The mortgage loan is scheduled to balloon on October 15,
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2009. Management is evaluating its options for when the mortgage loan balloons.
Management will decide to either pay the loan or refinance the balloon. Investments have been
purchased to cover the required balloon payment if that is the selected course of action.
Future Financial Plan
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The Florida Bar was created by the Supreme Court of Florida to assist it in regulating the
practice of law in Florida. It is primarily funded through lawyer payments of their required
annual fee, sale of continuing education programs to lawyers and other revenue from its
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business partners and affiliates. There is no plan to materially change these revenue streams
for the next two years. Accordingly, there are no present plans to materially increase the scope
or nature of the services provided to the citizens of Florida and the lawyers authorized to serve
them.
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Financial Statements
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Consolidated Statements of Net Assets
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June 30,
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Assets
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Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
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Prepaid expenses and other assets
Total current assets
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Capital assets, net
Land
Buildings and improvements
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Construction in progress
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Total capital assets, net
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Total assets
Liabilities and Net Assets
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Current liabilities
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Current portion of long-term debt
Accounts payable
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Claims payable
Accrued expenses
Deferred revenues
Security deposits
Total current liabilities
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I Non-current liabilities
Long-term debt, less current portion
Compensated absences payable
Total non-current liabilities
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Total liabilities
Net assets
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Unrestricted
Total net assets
Total liabilities and net assets
2007 2006
$ 10,667,868
40,553,570
577,459
417,974
52,216,871
$ 13,917,754
32,116,711
405,324
562,332
47,002,121
1,103,060
8,292,805
120,318
4,632,356
136,170
(7,945,380)
6,339,329
1,103,060
7,902,972
120,318
4,456,519
(7,678,640)
5,904,229
$ 58,556,200 $ 52,906,350
$ 198,939
1,586,408
53,595
907,385
9,362,874
47,891
$ 184,718
1,413,949
478,858
773,537
9,659,687
45,786
12,157,092 12,556,535
1,665,886
2,405,251
4,071,137
1,864,825
2,173,154
4,037,979
16,228,229 16,594,514
4,474,503
32,551
37,820,917
42,327,971
3,854,686
25,248
32,431,902
36,311,836
$ 58,556,200 $ 52,906,350
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See accompanying notes to the consolidated financial statements.
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Consolidated Statements of Revenues, Expenses and Changes in Net Assets
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Years ended June 30, 2007 2006
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Operating revenues
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Annual fees $ 20,896,608 $ 20,284,163
Other fees from members 6,003,005 5,356,003
Sales of products and services 8,891,878 7,560,103
Advertising 2,315,354 2,223,308
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Young lawyers 575,425 532,811
Grants and other 1,050,412 877,637
Total operating revenues 39,732,682 36,834,025
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Operating expenses
Regulation of the practice of law 14,704,622 13,318,143
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Cost of products and services provided to members 10,289,835 9,338,041
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Unauthorized practice of law 1,344,015 1,248,161
Public service programs 1,738,927 1,999,453
Communications with members and the public 3,989,239 3,550,705
Administration 3,515,762 2,399,971
Legislation 401,101 417,473
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Young lawyers 550,596 426,265
Depreciation and amortization 699,110 667,743
Other programs and costs 682,369 602,568
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Total operating expenses 37,915,576 33,968,523
Operating income 1,817,106 2,865,502
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Non-operating revenues (expenses)
Investment earnings 4,361,648 2,505,173
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Interest expense (148,325) (164,679)
Loss on disposal of capital assets (14,294) (6,567)
Total non-operating revenues (expenses) 4,199,029 2,333,927
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Ghange in net assets 6,016,135 5,199,429
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Total net assets, beginning of year 36,311,836 31,112,407
Total net assets, end of year $ 42,327,971 $ 36,311,836
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Consolidated Statements of Cash Flows
Years ended June 3D, 2007 2006
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Cash flows from operating activities:
Receipts from members, customers and other sources $ 39,800,129 $ 39,683,779
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Payments to employees, suppliers and other vendors (37,493,257) (33,499,046)
Net cash provided by operating activities 2,306,872 6,184,733
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Cash flows from non-capital and related financing activities:
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Reduction of debt (184,718) (171,513)
Interest paid (148,325) (164,679)
Net cash (used in) non-capital and related financing activities (333,043) (336,192)
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Cash 'flows from capital and related financing activities:
Acquisition of capital assets (1,148,504.) (357,823)
Net cash (used in) capital and related financing activities (1,148,504) (357,823)
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Cash flows from investing activities:
Net change in repurchase agreement (1,499,475) (52,760)
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Redemption of investments 32,951,300 11,850,573
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Purchase of investments, net of decrease in fair value (39,888,684) (18,147,824)
Investment income 4,361,648 2,505,173
Net cash (used in) provided by investing activities (4,075,211 ) (3,844,838)
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(Decrease) increase in cash and cash equivalents: (3,249,886) 1,645,880
Cash and cash equivalents, beginning of year 13,917,754 12,271,874
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Cash and cash equivalents, end of year $ 10,667,868 $ 13,917,754
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I See accompanying notes to the consolidated financial statements.
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Consolidated Statements of Cash Flows (Continued)
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Years ended June 30, 2007 2006
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Reconciliation of operating income to net cash provided by
operating activities:
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Operating income $ 1,817,106 $ 2,865,502
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Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization 699,110 667,743
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(Increase) decrease in:
(172,135)
144,358
267,081
(360,384)
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Increase (decrease) in:
Accounts payable 172,459 110,990
Claims payable (425,263) 339,666
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Accrued expenses
Deferred revenues
133,848
(296,813)
83,318
2,054,273
Security deposits 2,105 1,355
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Compensated absenses payable
Net cash provided by operating activities $
232,097
2,306,872 $
155,189
6,184,733
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Non-cash investing, capital, and financing acitivities
Change in the fair value of investments $ 1,195,805 $ 310,344
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Supplemental information
Cash paid for interest
Loss on disposal of assets
$ 148,325
$ 14,294
$
$
164,679
6,567
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Notes to Consolidated Financial Statements
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NOTE 1 - NATURE OF BUSINESS
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The Florida Bar and Subsidiaries (The Florida Bar) is the statewide professional organization of
lawyers. It serves as an advocate and intermediary for attorneys, the court and the public. The
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Florida Bar was established as a unified state bar by rule of the Supreme Court of Florida. The
Florida Bar regulates lawyers in Florida, investigates the unauthorized practice of law, offers
continuing legal education, publishes law journals and offers other member services.
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
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The Florida Bar is a unified state bar organized as an arm of the Supreme Court of the State of
Florida. It is considered a governmental entity because it was established by, and has the
potential to be dissolved by, the Supreme Court of Florida. Therefore, The Florida Bar adopted the
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provisions of Statement No. 34 ("Statement No. 34") of the Governmental Accounting Standards
Board liBasic Financial Statements - and Management's Discussion and Analysis - for State and
Local Govemments," as amended by Statement No. 37.
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In evaluating The Florida Bar as a reporting entity, management has considered all potential
component units for which The Florida Bar may be financially accountable and if found to be
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financially accountable, be required to be included in The Florida Bar's financial statements. The
Florida Bar is financially accountable if it appoints a voting majority of an organization's governing
board and (1) it is able to impose its will on an organization or (2) there is a potential for an
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organization to provide specific financial benefit to or impose specific financial burden on The
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Florida Bar. Additionally, the primary government is required to consider other organizations for
which the nature and significance of their relationship with the primary government are such that
exclusion would cause the reporting entity's financial statements to be misleading or incomplete.
Management's analysis has disclosed no component units that should be included in The Florida
Bar's financial statements.
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Basis of Presentation
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The Florida Bar is accounted for as a proprietary type enterprise fund. Enterprise funds are used
to account for activities that are financed and operated in a manner similar to private business
enterprises: (1) where the costs of providing goods and services to the general public on a
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continuing basis are to be financed through user charges; or (2) where the periodic determination
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of net income is considered appropriate. Proprietary funds distinguish operating revenues and
expenses from non-operating items. Operating revenues and expenses generally result from
providing goods and services in connection with a proprietary fund's ongoing operations.
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Operating expenses for The Florida Bar include the costs of personnel, contractual services,
supplies, utilities, repairs and maintenance, and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as non-operating revenues and expenses.
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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Basis of Accounting
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Basis of accounting refers to when revenues and expenses are recognized in the accounts and
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reported in the financial statements. The financial statements are prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the United States of
America. Under this method, revenues are recognized when they are earned and expenses are
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recognized when they are incurred. The measurement focus of proprietary fund types is on a flow
of economic resources method, which emphasizes the determination of net income, financial
position, and cash flow. All fund assets and liabilities, current and non-current, are accounted for in
the Consolidated Statements of Net Assets.
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Cash and Cash Equivalents
All demand deposit accounts, daily repurchase agreements and short-term highly liquid
investments with original maturities of three months or less are reported as cash equivalents.
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Investments
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Investments are reported at fair value, which are based on quoted market prices. The
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determination of realized gains and losses is independent of the determination of the net change in
the fair value of investments. Realized gains and losses on investments held in a previous fiscal
year and sold in the current period were used to compute the change in fair value for the previous
year and the current year.
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Capital Assets
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Capital assets are stated at cost less accumulated depreciation. The cost of capital assets is
depreciated over the estimated useful lives of the related assets, ranging from 5 to 40 years, using
the straight-line method. When capital assets are retired or otherwise disposed of, the costs and
related accumulated depreciation are removed from the accounts and any resulting gain or loss is
reflected in the Consolidated Statements of Revenues, Expenses and Changes in Net Assets, in
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the period of disposal.
Claims Payable
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The Florida Bar created the Clients' Security Fund (the Fund) to compensate people who have
suffered financial losses due to misappropriation of funds by errant Florida Bar members. The
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Fund is financed by $20 of each Florida Bar member's annual fees. Claims payable represent
amounts payable from the Fund.
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Deferred Revenues
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Deferred revenues consist primarily of membership fees collected in advance, prepaid advertising
and prepaid legal education courses.
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Allocation of Expenses
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The costs of providing the various programs, services, and other activities have been summarized
on a functional basis in the Consolidated Statement of Revenues, Expenses and Changes in Net
Assets. Accordingly, certain costs have been allocated among the programs and supporting
I
services benefited.
Principles of Consolidation
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The accompanying consolidated financial statements include the accounts of The Florida Bar and
its wholly-owned subsidiary, The Florida Bar Building Corporation, and its other controlled entities,
Florida Lawyers Association for the Maintenance of Excellence, Inc., and The Florida Attorneys
Charitable Trust. All significant intercompany transactions and accounts have been eliminated in
consolidation.
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Income Taxes
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The Florida Bar is an administrative agency of the Supreme Court and is not subject to federal or
state income tax. The Florida Bar Building Corporation, Florida Lawyers Association for the
Maintenance of Excellence, Inc., and The Florida Attorneys Charitable Trust have been granted
exemption from federal and state income taxes except on unrelated business income under
I
Sections 501 (c)(25), 501 (c)(6), and 501 (c)(3), respectively, of the Internal Revenue Code.
Accordingly, no liability for income taxes is reflected in these financial statements.
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Estimates
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The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and
I
liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.
Concentration
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The Florida Bar receives the majority of its revenue from lawyers licensed to practice in the State of
Florida.
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Net Assets
Net assets are categorized as invested in capital assets, restricted for scholarships, and
undesignated. Invested in capital assets is intended to reflect the portion of net assets that are
I
associated with non-liquid, capital assets. Restricted for scholarships consists of monies restricted
for the annual G. Kirk Haas fund scholarships. Undesignated assets consist of all other assets not
included in the previous categories.
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Derivative Financial Instruments
The Florida Bar follows the provisions of Governmental Accounting Standards Board (GASB)
Technical Bulletin No. 2003-1, Disclosure Requirements for Derivatives Not Reported at Fair Value
on the Statement of Net Assets, an amendment to GASB Technical Bulletin 94-1. GASB Technical
Bulletin No. 2003-1 provides an updated definition of derivatives and requires certain disclosures
regarding the government's objective for entering into derivative transactions and the derivative's
terms, fair value, and risk exposures.
Recent Accounting Pronouncements
The Florida Bar prospectively adopted Governmental Accounting Standards Board (GASB) No. 45,
Accounting and Financial Reporting by Employers for Postemployment Benefits Other than
Pensions (OPEB), during the year ended June 30,2007. This statement establishes standards for
the measurement, recognition, and display of OPEB expenses and related liabilities, note
disclosures and, if applicable, required supplementary information, in the financial reports of
governmental employers. OPEB costs are accrued when the related services are received by The
Florida Bar.
NOTE 3-CASH AND CASH EQUIVALENTS
Cash and cash equivalents are subject to custodial credit risk. Custodial credit risk is the risk that
in the event of a bank or other counterparty failure, The Florida Bar's cash and cash equivalents
may not be returned. The Florida Bar's policy with respect to custodial credit risk is that The Florida
Bar will only maintain demand deposit accounts with financial institutions in which management
believes that the risk is limited because the financial institutions are large with strong financial
positions.
Cash and cash equivalents are held at two financial institutions. Operating cash is held at a
financial institution insured by the Federal Deposit Insurance Corporation up to $100,000 each for
the parent and subsidiary accounts. Operating cash balances were $2,561,243 and $2,021,114 at
June 30, 2007 and 2006, respectively. Additional cash and money market funds are held at al
financial institution insured by the Securities Investor Protection Corporation up to $100,000./
Additional cash and money market funds were $8,106,625 and $11,896,640 at June 30, 2007 and/
2006, respectively.
- 15
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NOTE 4 - INVESTMENTS
Investment Objectives and Policies
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Investments will be made for the sole interest and exclusive purpose of providing investment
returns for The Florida Bar. The Florida Bar's investment objectives and policies are achieved
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through a short-term account portfolio and a long-term account portfolio. The ultimate
responsibility for the proper supervision of The Florida Bar's investment portfolio rests with the
Board of Directors and the Investment Committee.
The purpose of the short-term portfolio is to provide for The Florida Bar's short-term working
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capital needs. The short-term portfolio possesses a short-term time horizon (one to three years)
and within this horizon, the primary objectives of the short-term portfolio are to preserve capital
for short-term cash flow needs, provide liquidity, and to achieve attractive short-term yields
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consistent with the preservation of capital.
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The purpose of the long-term investment portfolio is to provide for The Florida Bar's operating
needs and to fund The Florida Bar's programs both today and into the future. The long-term
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portfolio possesses an intermediate to long-term horizon (five to seven years) and within this
horizon, the primary objectives of the long-term portfolio are to provide long-term growth of
capital and income.
The asset allocation guidelines with regard to acceptable asset classes, the overall target asset
mix, and the representative indices of each asset class are as follows:
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Short-Term
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Asset Classes
Short-Term Fixed Income
Cash and Equivalents
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Long-Term
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Asset Classes
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Large Cap Equity
Mid Cap Equity
Small Cap EqUity
International
Emerging Market Equity
Real Assets
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REITs
TIPS
Cash and Equivalents
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Target
Minimum Mix Maximum
35.0t'o 50.0t'o 65.0%
35.0% 50.0% 65.0%
Target
Minimum Mix Maximum
14.0
0
k 20.0% 26.0%
4.0% 6.0% 8.0%
4.0% 6.0%
8.00/0
9.8k 14.0
0
k 18.2t'o
O.Ot'o 2.0% 4.0%
0.0% 2.0% 4.0%
1.0% 3.0% 5.0%
1.0% 3.0
0
k 5.0%
2.0
0
k 4.0
0
k 6.0
0
k
- 16
Representative
Index
Lehman Brothers 1-3 year Govt Bond Index
Citigroup U.S. 90-Day Treasury Bills
Representative
Index
Standard & Poor's 500 Index
Russell Mid Cap Index
Russell 2000 Index
MSCI EAFE Index
MSCI Emerging Markets Free Index
Dow Jones AIG Commodity Index
NAREIT Equity Index
Lehman Brothers US TIPS Index
Citigroup U.S. 90-Day Treasury Bills
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NOTE 4 - INVESTMENTS (CONTINUED)
Investments
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At June 30, The Florida Bar's investment balances were as follows:
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June 30,
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Repurchase agreement
Mutual funds - debt securities (ST) *
Mutual funds - debt securities (LT) *
US Treasuries
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Federal Agencies
Corporate Bonds &Other Fixed Income
Municipal Bonds
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US Treasury Bonds
Mutual funds - equity securities
Stocks
Total investments
Fair Value
$ 2,173,963
7,081,588
4,854,913
2,279,114
3,656,258
913,232
1,354,845
3,212,727
15,026,930
$ 40,553,570
2007
Maturity
Daily
2 year average **
N/A
5 year average**
15 year average**
16 year average**
11 year average**
2 year average **
N/A
N/A
2006
Rating Fair Value
N/A $ 674,488
Ba to Aaa 9,548,510
N/A 7,429,690
Aaa
Aaa
Baa2 to Aaa
A1 to Aaa
Aaa
N/A 1,701,705
N/A 12,762,318
$ 32,116,711
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* The Florida Bar invests in short-term mutual funds, which consist of debt securities (Le. fixed income securities).
The Florida Bar's short-term mutual funds are not invested directly in fixed income debt securities. The Florida Bar is
able to sell their interest in these mutual funds' at will (subject to potential redemption fees).
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** Represents the average maturity of debt securities held by The Florida Bar.
Credit Risk
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Investments in fixed income debt securities through mutual funds must adhere to the policy of
meeting an average quality rating of A or higher for the long-term portfolio and AA or higher for
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the short-term portfolio by either Standards & Poor's, Moody's or Fitch Investors Service at the
time of purchase. Investments in corporate holdings must be rated investment grade or better
by either Standards & Poor's, Moody's or Fitch Investors Service at the time of purchase.
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Concentration of Credit Risk
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Investments in equity securities are subject to a maximum 5% commitment at cost and 10
%
weighting at market of the account's total market 'value for any individual security or single
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issuer. Investment in fixed income securities are subject to no more than 5% of the account's
market value invested in a single issue or in direct obligations of a single issuer with the
exception of the U.S. Government and its agencies so long as any such government or agency
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issue shall be backed with the full faith and credit of the U.S. Government. In addition, no more
than 15% of the fixed income securities may be invested in mortgage backed or asset backed
securities of a single issuer, with the exception of those issued by the U.S. Government, its
agencies, or its sponsored agencies.
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- 17
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Notes to Consolidated F'inancial Statements
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Interest Rate Risk
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Interest rate risk arises from investments in debt instruments and is defined as the risk that
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changes in interest rates will adversely affect the fair value of an investment. The Florida Bar's
investment in U.S. Treasuries, federal agencies, corporate bonds, municipal bonds and U.S.
Treasury bonds are directly subject to the interest rate risk of debt instruments. The Florida Bar
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is not directly subject to the interest rate risk for its short-term debt instruments, as investments
in these debt securities are entered into through mutual funds and The Florida Bar is able to sell
their interest in these mutual funds at will (subject to potential redemption fees). Additionally,
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The Florida Bar has elected to participate in mutual funds with target durations of one to two
years (low duration funds). However, investments in mutual funds are with the understanding
that the investment policies stated in the mutual fund's prospectus supersedes the guidelines
established by The Florida Bar.
Custodial Credit Risk
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Custodial credit risk is the risk that in the event of bankruptcy of the custodial entity, The Florida
Bar's deposits may not be returned to it. The Florida Bar's policy regarding custodial credit risk
is that deposits subject to overnight repurchase agreements shall only be invested in securities
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backed by the United States government. Additionally, The Florida Bar will only hold investment
securities that are insured or registered and held by The Florida Bar, or its designated agent, in
the name of The Florida Bar. The repurchase agreement is exposed to uninsured and
uncollateralized custodial credit risk with Bank of America. Investments held through Morgan
Stanley have Securities Investor Protection Corporation coverage up to $500,000 per customer
for cash and securities and excess protection provided by the Customer Asset Protection
Company for up to the net equity value of cash and securities in Morgan Stanley's account.
Investments in PIMCO mutual funds are held by a third party trust company.
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Foreign Currency Risk
Investments in international equity securities are limited to SEC-Registered, U.S. exchange
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listed, U.S. dollar-denominated securities in foreign domiciled issuers. Investments in
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international debt securities are limited to SEC-registered, U.S. dollar-denominated, U.S.
government backed securities issued by foreign governments. The Florida Bar invests in
international securities through American Depository Receipts (ADRs). ADRs represent
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investments in shares of foreign companies traded on the U.S. financial markets and are
denominated in U.S. dollars and, thus, are not exposed to foreign currency risk. Investments in
foreign currency-denominated government bonds, any type of foreign corporate bond, or any
other type of foreign currency are not allowed. Securities of foreign companies traded on
foreign stock exchanges may be purchased only with the written permission of The Florida Bar's
Investment Committee. Additionally, the investment policy approves the use of mutual funds,
which may include foreign securities, with the understanding that the investment policies stated
in the mutual fund's prospectus supersede the guidelines set forth in The Florida Bar's
investment policy.
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Derivative Instruments
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The Florida Bar's investment policy states that investments in options, derivatives and financial
futures are prohibited in separately managed accounts. Additionally, the investment policy
approves the use of mutual funds, which may include derivative instruments, with the
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understanding that the investment policies stated in the mutual fund's prospectus supersede the
guidelines set forth in The Florida Bar's investment policy.
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NOTE 5 - ACCOUNTS RECEIVABLE, NET
The following is a summary of accounts receivable, net:
I June 30, 2007 2006
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Accounts receivable $ 602,359 $ 430,224
Allowance for doubtful accounts (24,900) (24,900)
Accounts receivable, net $ 577,459 $ 405,324
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NOTE 6 - CAPITAL ASSETS, NET
Capital assets not being depreciated:
Land
Construction in Progress
Total capital assets not depreciated
July 1, 2006
$ 1,103,060
1,103,060
Additions
$ -
136,170
136,170
Deletions June 30, 2007
$ - $ 1,103,060
136,170
1,239,230
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Capital assets being depreciated:
Total capital assets being depreciated
7,902,972
120,318
4,456,519
12,479,809
389,833
674,799
1,064,632
(498,962)
(498,962)
8,292,805
120,318
4,632,356
13,045,479
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Less accumulated depreciation for:
Total accumulated depreciation
Total capital assets being depreciated, net
(4,269,950)
(120,318)
(3,288,372)
(7,678,640)
4,801,169
(263,422)
(435,688)
(699,110)
365,522
432,370
432,370
(66,592)
(4,533,372)
(120,318)
(3,291,690)
(7,945,380)
5,100,099
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Depreciation expense for
$667,743, respectively.
the years
$ 5,904,229 $ 501,692
ended June 30, 2007 and
$ (66,592) $ 6,339,329
2006 was $699,110 and
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NOTE 7 - LONG-TERM LIABILITIES
Long-Term Debt
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The following is a summary of long-term debt:
June 30, 2007 2006
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Renewal mortgage note payable to Bank of America in the amount
of $2,986,384 due on October 15, 2009. Monthly payments of
principal began on November 15, 1999 at $9,383 with annual
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increases of $723 per month each November 15th based on a 15
year amortization with a balloon payment of $1,396,760 at maturity.
Interest is payable monthly based on a contract rate equal to the
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London Interbank Offering Rate (LIBOR) (5.32% at June 30, 2007)
plus 47 basis points. However, the interest rate was swapped in a
hedge transaction. See Note 8 below. The mortgage is
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collateralized by real estate owned by The Florida Bar Building
Corporation and guaranteed by The Florida Bar. $ 1,864,825 $ 2,049,543
Current portion (198,939) (184,718)
Long-term debt, less current portion $ 1,665,886 $ 1,864,825
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Years ended June 30,
The following are maturities of long-term debt:
Amount
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2008
2009
2010
Total
Compensated Absences Payable
Compensated absences payable consisted of the following:
$ 198,939
214,255
1,451,631
$ 1,864,825
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June 30,
Accrued vacation
Accrued sick leave
Total compensated absences
2007
$ 1,451,600
953,651
$ 2,405,251
2006
$ 1,289,710
883,444
$ 2, 173, 154
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NOTE 7 - LONG-TERM LIABILITIES (CONTINUED)
Changes in Long-Term Liabilities
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Changes in long-term liabilities are summarized as follows:
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Balance Balance
July 1,2006 Additions Reductions June 30, 2007
Long-term debt $ 2,049,543 $ - $ (184,718) $ 1,864,825
Compensated absences 2,173,154 1,746,807 (1,514,710) 2,405,251
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Total long-term liabilities $ 4,222,697 $ 1,746,807 $ (1,699,428) $ 4,270,076
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NOTE 8 - DERIVATIVE DISCLOSURE -INTEREST RATE SWAP
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Objective of the interest rate swap. In October 1999, The Florida Bar refinanced an 8.5%
fixed rate mortgage to a variable rate mortgage based on the LIBOR rate plus .47%. To
I
manage its interest rate exposure under the variable rate renewal mortgage note payable to
Bank of America, The Florida Bar entered into a hedge transaction on October 13, 1999 to swap
its floating rate for a fixed rate through a 120 month interest rate swap provided by Bank of
'America.
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Terms. The swap was for the notional amount of $2,986,384 which was equal to the principal
amount of the underlying variable rate debt. The notional amount declines each year as the
principal amount of the associated debt declines. At June 30, 2007 and 2006, the notional
amount was $1,864,825 and $2,049,543, respectively. The swap was entered into at the same
I
time that the debt was refinanced (October 1999). Under the swap, The Florida Bar pays the
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Bank of America a contracted interest rate of 30-day LIBOR plus .47% and receives a payment
from Bank of America based on the coupon rate of the swap which is 6.97%. The net effect of
the two contractual rates is an effective fixed rate of 7.44%. The swap matures on October 15,
2009.
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Fair value. Due to the difference between the two rates, the swap had a negative fair value of
$63,775 and $80,999 as of June 30,2007 and 2006, respectively. The fair value was estimated
by the Bank of America as identified in the Schedule to the International Swap Dealers
Association Master Agreement (ISDA) using the mid-market level method. This method is in
accordance with market conventions, which take into consideration estimates about relevant
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present and future market conditions, as well as size and liquidity of the position and related
actual or potential hedging transactions.
Basis risk. The swap exposes The Florida Bar to basis risk should the LIBOR rates decrease
significantly. If a change occurs that results in a significant decrease in LIBOR rates, the
I
expected cost savings may not be realized.
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Termination risk. The Florida Bar or the Bank of America may terminate the swap if the other
party fails to perform under terms of the agreement. If at the time of termination the swap has a
negative fair value, The Florida Bar would be liable to the Bank of America for a payment equal
to the swap's fair value.
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NOTE 8 - DERIVATIVE DISCLOSURE -INTEREST RATE SWAP (CONTINUED)
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Swap payments and associated debt. Using rates as of June 30, 2007, debt service
requirements of the renewal mortgage note payable and the swap payments, assuming current
interest rates remain the same for their term, were as follows. As rates vary, the variable-rate
interest payments and swap payments will vary.
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Year ending Interest rate Net debt
June 30 Principal Interest Total swap, net service
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2008 $ 198,939 $ 102,788 $ 301,727 $ 20,948 $ 322,675
2009 214,255 90,870 305,125 18,519 323,644
2010 1,451,631 20,747 1,472,378 4,228 1,476,606
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Total $ 1,864,825 $ 214,405 $ 2,079,230 $ 43,695 $ 2,122,925
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NOTE 9 - REVENUE AND EXPENSE CLASSIFICATION
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The significant revenue and expense accounts presented in the consolidated financial
statements are described as follows:
Other Fees from Members
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Includes revenues from members other than annual dues such as advertising approval fees,
certification fees and section dues.
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Sales of Products and Services
Includes revenues from sources such as Continuing Legal Education (CLE) registrations, sales
of publications and meeting revenues.
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Grants and Other
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Includes grants received from The Florida Bar Foundation, cost recoveries from discipline
cases, rents received in The Bar Center Building Fund and other sources of revenue.
Regulation of the Practice of Law
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Includes expenses incurred for Lawyer Regulation, Lawyer Advertising, Ethics, Continuing Legal
Education Rules (CLER), Membership Records and Certification.
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Cost of Products and Services Provided to Members
Includes expenses such as the cost of CLE courses and publications, Legal Office Management
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Advisory Services (LOMAS), voluntary member assistance programs, meetings, committee
activity and section activity.
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NOTE 9 - REVENUE AND EXPENSE CLASSIFICATION (CONTINUED)
Communication with Members and the Public
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Includes the expenses of the Public Information Department and The Florida Bar Journal and
News.
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Administration
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Includes board and officer expenses, the cost of the Executive Director's office, General
Counsel, Research, Planning and Evaluation, and liability and property insurance.
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NOTE 10 - RETIREMENT PLANS
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The Florida Bar sponsors a defined contribution pension plan, The Florida Bar Employees'
Pension Plan (the Plan), which is available to all salaried personnel having completed six
months of service. The Plan is administered by The Florida Bar Retirement Committee. The
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Plan may be amended at any time by The Florida Bar. Employer contributions are discretionary
and are currently made for all eligible employees based on a formula which was 11
0
/0 of covered
compensation and 4.30/0 on covered compensation exceeding 80
0
/0 of the Social Security wage
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base for the years ended June 30, 2007 and 2006. The employer contributions are allocated to
separate participant accounts and invested by the Trustee in the funds selected by the
employee from those offered by the Plan Administrator. Participant accounts vest based on the
following schedule:
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< 3 years 0
0
/0
3 -4 years 40
0
/0
4 - 5 years 60
0
/0
5 - 6 years 80
0
/0
> 6 years 1000/0
Forfeited contributions are held in a separate account and are used to reduce future employer
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contributions. The plan has been amended to comply with all applicable Federal tax laws. The
pension contribution made equaled the contribution required during the years ended June 30,
2007 and 2006 for the Plan years ended December 31, 2006 and 2005 and was $1,434,567
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and $1,275,351, respectively.
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The Florida Bar also has a deferred compensation plan. The plan is for the benefit of all eligible
employees who elect to participate.
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NOTE 11 - RETIREE POSTEMPLOYMENT HEALTH BENEFITS
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Plan Description. The Florida Bar Retiree Health Plan (TFBRHP) is a single-employer defined
benefit healthcare plan administered by The Florida Bar. TFBRHP provides health insurance
I
benefits to eligible employees at early retirement, disability or 'full retirement. The Florida Bar
has the authority to establish and amend benefit provisions to TFHRHP.
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Funding Policy. The contribution requirements of plan members and The Florida Bar are
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established and may be amended by The Florida Bar. The required contribution is based on an
actuarially determined percentage of total active payroll. For fiscal year ended June 30, 2007,
The Florida Bar contributed $1,281,688 to the plan. Plan members, who are ages 62 through
65 or disabled, are required to contribute $25 per month for retiree-only coverage and $100 per
month for all other member coverage.
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Annual OPES Cost and Net OPES Obligation. The Florida Bar's annual other postemployment
benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the
employer (ARC), an amount actuarially determined in accordance with the parameters of GASB
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Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is
projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years. Based on the January 1, 2006,
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actuarial valuation, the ARC is 0.97% of active payroll payable for the fiscal year ending June
I
30,2007. The following table shows the components of The Florida Bar's annual OPEB cost for
the year, the amount actually contributed to the plan, and changes in The Florida Bar's net
OPEB obligation to TFBRJ-IP:
Annual required contribution $ 64,766
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Interest on net OPEB obligation
Adjustments to annual required contribution
Annual OPEB cost (expense)
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Net OPEB obligation - July 1, 2007
Annual OPEB cost (expense) for 2007
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Benefits paid during 2007
Contributions made during 2007
$ 64,766
$ 1,230,002
64,766
(13,080)
(1,281,688)
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Net OPEB obligation - June 30, 2007 $
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The Florida Bar's annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan, and the net OPEB obligation for 2007 were as follows:
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AnnualOPEB Percentage of Annual OPEB Cost Net OPES
Fiscal Year Ended Cost Contribtued Obligation
6/30/2007 $ 64,766 100
0
Jb $
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NOTE 11 - RETIREE POSTEMPLOYMENT HEALTH BENEFITS (CONTINUED)
Funded Status and Funding Progress. As of January 1, 2006, the first actuarial valuation date,
the plan was unfunded. The actuarial accrued liability for benefits was calculated to be
I
$1,203,784. The covered payroll (annual payroll of active employees covered by the plan) was
$12,946,872, and the ratio of the UAAL to the covered payroll was 9.30
0
AJ. The liability was
funded in June 2007.
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Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Amounts
I
determined regarding the funded status of the plan and the annual required contributions of the
employer are subject to continual revision as actual results are compared with past expectations
and new estimates are made about the future.
I
Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are
based on the substantive plan (the plan as understood by the employer and the plan members)
and include the types of benefits provided at the time of each valuation and the historical pattern
of sharing of benefit costs between the employer and plan members to that point. The actuarial
methods and assumptions used include techniques that are designed to reduce the effects of
I
short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent
with the long-term perspective of the calculations.
I
In the January 1, 2006 actuarial valuation, the projected unit credit actuarial cost method was
I
used. The actuarial assumptions included a 6% investment rate of return, which is a blended
rate of the expected long-term investment returns on plan assets and on the employer's own
investments, and an annual healthcare cost trend rate of 12AJ initially, reduced by decrements
I
to an ultimate rate of 60/0 in the year 2010 and beyond. Both rates included a 3% inflation
assumption. As of the January 1, 2006 actuarial valuation, TFBRHP did not have plan assets in
trust solely to provide benefits to retirees and their beneficiaries. However, the actuary assumed
I
that TFBRHP would start to pre-fund benefits and the investment rate of return was based on
this fact. The UAAL is being amortized as a level percentage of projected payroll on an open
basis. The remaining amortization period at January 1, 2006 was 30 years.
NOTE 12 - LEASES
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The Florida Bar is the lessee of office space under operating leases expiring in various years
through the year 2017, with escalation clauses.
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NOTE 12 - LEASES (CONTINUED)
The Florida Bar leases office space from its wholly-owned subsidiary, The Florida Bar Building
Corporation. The intercompany rental income and rental expense have been eliminated in
I
consolidation.
Future minimum rental payments are as follows:
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Years ending June 30, Amount
2008 $ 717,229
2009 676,454
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2010 559,887
2011 205,583
2012 203,798
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Thereafter 1,110,623
Total minimum future rental payments $ 3,473,574
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Total rental expense for the fiscal year ended June 30, 2007 and 2006 was $860,045 and
$757,530, respectively.
I
The Florida Bar is also the lessor of certain office space in a building owned by The Florida Bar.
The space is rented to unrelated entities under operating leases expiring in various years
through the year 2009. Rental income for the fiscal years ended June 30, 2007 and 2006 were
I
$507,083 and $499,561, respectively.
Future minimum rental receipts are as follows:
Years ending June 30, Amount
I
I
2008 $ 265,991
2009 66,986
Total minimum future rental payments $ 332,977
I
NOTE 13 - CONTINGENCIES
I
The Florida Bar is involved in several actions as defendant and/or co-defendant. The majority
of the actions are expected to be settled with little or no financial impact to The Florida Bar. An
I
accurate assessment of any significant liability is not determinable although management of The
Florida Bar believes that the possibility of any significant liability arising from current litigation is
extremely remote.
I
NOTE 1 4 ~ - COMMITMENTS
The Florida Bar has contracted with various hotels to reserve facilities, rooms, and food and
beverage services for meetings and seminars to be held through 2015. If The Florida Bar
I
should choose to cancel the contract(s), liquidating damages will be due to the hotel. Generally,
liquidating damages are tiered depending on the time between cancellation and scheduled
arrival date and are based on a percentage of anticipated revenues.
I
I
- 26
I
I
I
NOTE 14 - COMMITMENTS (CONTINUED)
I
The following is a schedule of estimated liquidating damages that The Florida Bar would incur
should they cancel the contract(s) as of June 30, 2007:
I
Estimated
liquidating
I
Event damages
Annual Meeting $ 674,810
Mid-Year Meeting 98,682
I
Board of Governors Meeting 130,746
General Meeting 15,700
Section Meeting 592,893
Continuing Legal Education Seminars 356,745
Total commitment $ 1,869,576
I
NOTE 15 - DESIGNATED FUND BALANCES
I
I
The Florida Bar has designated certain net assets to be used for specific program purposes. As
of June 30,2007 and 2006, the designated net assets were $14,691,134 and $12,073,656,
respectively.
NOTE 16 - RISK MANAGEMENT PROGRAMS
I
The Florida Bar is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
I
Workers' compensation, property, and general liability coverage are provided through
I
commercial insurance carriers. Management continuously reviews the limits of coverage and
believes that current coverage is adequate. There were no significant reductions in insurance
coverage from the previous year.
I
I
I
I
I
I
- 27
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
Supplementary Information
IL...----------------.-J
------------------
Consolidating Statement of Net Assets
Clients'
General Bar Center Security Certification Sections Eliminating Total
June 30, 2007 Fund Fund Fund Fund Fund Entries All Funds
Assets
Current assets
Cash and cash equivalents
Short-term investments
Due from other funds
Total current assets
$ 9,533,712
40,553,570
545,576
-
443,091
51,075,949
$ 1,134,156
-
-
5,415,255
-
6,549,411
$ -
-
-
4,621,087
-
4,621,087
$ -
-
-
789,453
-
789,453
$ -
-
-
3,969,392
-
3,969,392
$ -
-
31,883
(14,795,187)
(25,117)
(14,788,421 )
$ 10,667,868
40,553,570
577,459
417,974
52,216,871
Restricted assets
Investment in The Florida Bar
Building Corporation
Total restricted assets
1,611,647
1,611,647
-
-
-
-
-
-
-
-
(1,611,647)
(1,611,q47)
Capital assets, net
Land
Construction in progress
-
-
-
-
-
-
-
1,103,060
8,292,805
120,318
4,632,356
136,170
(7,945,380)
6,339,329
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,103,060
8,292,805
120,318
4,632,356
136,170
(7,945,380)
6,339,329
Total assets $ 52,687,596 $ 12,888,740 $ 4,621,087 $ 789,453 $ 3,969,392 $ (16,400,068) $ 58,556,200
See Independent Auditors' Report.
- 28
- - - - - - - - - - - - - - - - - - -
Consolidating Statement of Net Assets
(Continued)
Clients'
June 30,2007 Fund Fund Fund Fund Fund Entries All Funds
Liabilities and Net Assets
Current liabilities
Current portion of long-term debt $ - $ 198,939 $ - $ - $ - $ - $ 198,939
Accounts payable 2,937,134 15,006 - - - (1,365,732) 1,586,408
Claims payable - - 53,595 - - - 53,595
Accrued expenses 907,385 - - - - - 907,385
Due to other funds 13,397,572 - - - - (13,397,572)
Deferred revenues 9,362,874 - - - - - 9,362,874
Security deposits - 73,008 - - - (25,117) 47,891
Total current liabilities 26,604,965 286,953 53,595 - - (14,788,421 ) 12,157,092
Non-current liabilities
Long-term debt, less current portion - 1,665,886 - - - - 1,665,886
Compensated absences payable 2,405,251 - - - - - 2,405,251
Total non-current liablities 2,405,251 1,665,886 - - - - 4,071,137
Total liabilities 29,010,216 1,952,839 53,595 - - (14,788,421 ) 16,228,229
Net assets
Invested in capital assets, net of related debt - 4,474,503 - - - 4,474,503
Restricted for scholarships 32,551 - - - - - 32,551
Unrestricted
Designated 515,046 4,849,751 4,567,492 789,453 3,969,392 - 14,691,134
Undesignated 23,129,783 - - - - - 23,129,783
Contributed capital - 1,611,647 - - - (1,611,647)
Total net assets 23,677,380 10,935,901 4,567,492 789,453 3,969,392 (1,611,647) 42,327,971
Total liabilities and net assets $ 52,687,596 $12,888,740 $ 4,621,087 $ 789,453 $ 3,969,392 $ (16,400,068) $ 58,556,200
- 29
- - - - - - - - - - - - - - - - - - -
Consolidating Statement of Revenues, Expenses and Changes in Net Assets
Clients'
Year ended June 30, 2007 Fund Fund Fund Fund Fund Entries All Funds
Operating revenues
Annual fees $ 20,896,608 $ - $ - $ - $ - $ - $ 20,896,608
Other fees from members 3,757,073 - - 1,074,551 1,171,381 - 6,003,005
Sales of products and services 6,344,212 - - 5,515 2,542,151 - 8,891,878
Advertising 2,315,354 - - - - - 2,315,354
Young lawyers 575,425 - - - - - 575,425
Grants and other 526,919 978,887 81,001 - - (536,395) 1,050,412
Total operating revenues 34,415,591 978,887 81,001 1,080,066 3,713,532 (536,395) 39,732,682
Operating expenses
Regulation of the practice of law 13,972,125 - - 936,414 - (203,917) 14,704,622
Cost of products and services provided to members 7,345,063 - - - 3,051,525 (106,753) 10,289,835
Unauthorized practice of law 1,363,825 - - - - (19,810) 1,344,015
Public service programs 586,698 - 1,160,737 - - (8,508) 1,738,927
Communication with members and the public 4,047,917 - - - - (58,678) 3,989,239
Administration 3,567,529 - - - - (51,767) 3,515,762
Legislation 406,995 - - - - (5,894) 401,101
Young lawyers 558,686 - - - - (8,090) 550,596
Depreciation and amortization - 699,110 - - - - 699,110
Other programs and costs 240,424 514,923 - - - (72,978) 682,369
Total operating expenses 32,089,262 1,214,033 1,160,737 936,414 3,051,525 (536,395) 37,915,576
Operating income (loss) 2,326,329 (235,146) (1,079,736) 143,652 662,007 - 1,817,106
Non-operatlng revenues (expenses)
Investment earnings 3,126,872 464,834 388,230 48,322 333,390 - 4,361,648
Interest expense - (148,325) - - - - (148,325)
Loss on disposal of capital assets - (14,294) - - - - (14,294)
Total non-operating revenues 3,126,872 302,215 388,230 48,322 333,390 - 4,199,029
Change In net assets 5,453,201 67,069 (691,506) 191,974 995,397 - 6,016,135
Net assets, beginning of year 20,711,247 9,924,400 3,716,362 597,479 2,973,995 (1,611,647) 36,311,836
Transfers (to) from other funds (2,487,068) 944,432 1,542,636
Net assets, end of year $ 23,677,380 $ 10,935,901 $ 4,567,492 $ 789,453 $ 3,969,392 $ (1,611,647) $ 42,327,971
- 30
- - - - - - - - - - - - - - - - - - -
Consolidating Statement of Cash Flows
Clients'
Year ended June 30,2007 Fund Fund Fund Fund Fund Entries All Funds
Cash flows from operating activities:
Receipts from members, customers and other sources $ 33,946,214 $ 978,887 $ 81,001 $ 1,080,066 $ 3,713,532 $ 429 $ 39,800,129
Payments to employees, suppliers and other vendors (32,200,890) 352,603 (469,231 ) (1,128,388) (4,046,922) (429) (37,493,257)
Net cash provided by (used in) operating activities 1,745,324 1,331,490 (388,230) (48,322) (333,390) - 2,306,872
Cash flows from non-capital and related financing activities:
Reduction of debt - (184,718) - - - - (184,718)
Interest paid - (148,325) - - - - (148,325)
Net cash (used in) non-capital and related financing
activities - (333,043) - - - - (333,043)
Cash flows from capital and related financing activities:
Acquisition of capital assets - (1,148,504) - - - - (1,148,504)
Net cash (used in) capital and related financing activities - (1,148,504) - - - - (1,148,504)
Cash flows from investing activities:
Net change in repurchase agreement (1,499,475) - - - - - (1,499,475)
Redemption of investments 32,951,300 - - - - - 32,951,300
Purchase of investments, net of change in fair value (39,888,684) - - - - - (39,888,684)
Investment income 3,126,872 464,834 388,230 48,322 333,390 - 4,361,648
Net cash (used in) provided by investing activities (5,309,987) 464,834 388,230 48,322 333,390 - (4,075,211 )
(Decrease) increase in cash and cash equivalents (3,564,663) 314,777 - - - - (3,249,886)
Cash and cash equivalents, beginning of year 13,098,375 819,379 - - - - 13,917,754
Cash and cash equivalents, end of year $ 9,533,712 $ 1,134,156 $ - $ - $ - $ - $10,667,868
- 31
- - - - - - - - - - - - - -
Consolidating Statement of Cash Flows
(Continued)
Year ended June 30, 2007
General
Fund
Bar Center
Fund
Clients'
Security
Fund
Certification
Fund
Sections
Fund
Eliminating
Entries
Total
All Funds
Reconciliation of operating income to net cash provided
by (used in) operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities
Depreciation and amortization
Transfers (to) from other funds
(I ncrease) decrease in:
Due from other funds
Prepaid expense and other assets
Increase (decrease) in:
Accounts payable
Claims payable
Accrued expenses
Security deposits
Due to other funds
Deferred revenues
Net cash provided by (used in) operating activities
$ 2,326,329
-
(2,487,068)
(172,564)
-
144,358
310,574
-
365,945
-
1,554,563
(296,813)
$ 1,745,324
$ (235,146)
699,110
944,432
-
(54,831 )
-
(24,180)
-
-
2,105
-
-
$ 1,331,490
$ (1,079,736)
-
1,542,636
-
(425,867)
-
-
(425,263)
-
-
-
-
$ (388,230)
$ 143,652
-
-
(191,974)
-
-
-
-
-
-
-
$ (48,322)
$ 662,007
-
-
(995,397)
-
-
-
-
-
-
-
$ (333,390)
$ -
-
429
1,668,069
-
(113,935)
-
-
-
(1,554,563)
-
$ -
$ 1,817,106
699,110
(172,135)
144,358
172,459
(425,263)
365,945
2,105
(296,813)
$ 2,306,872
Non-cash investing, capital and financing activities:
Change in the fair value of investments
Loss on disposal of assets
$ 1,195,805
$ -
$ -
$ 14,294
$
$
-
-
$
$
-
-
$
$
-
-
$
$
-
-
$ 1,195,805
$ 14,294
Supplemental information:
Cash paid for interest $ - $ 148,325 $ - $ - $ - $ - $ 148,325
- 32
I
I
I
Variance
Favorable
Year ended June 30, 2007 Actual BUdgeted (Unfavorable)
I
Revenues - budgetary basis
I
Annual fees
Investments
Authorized house counsel
I
Lawyer regulation
Professional enhancement program
Unlicensed practice of law
I
Ethics
Lawyer advertising
Professionalism
I
Multijurisdictional practice
Meetings and conventions
I
Addressing services
Continuing legal education program
Continuing legal education rule
I
Course approval center
Public service programs
Foreign legal consultants
I
Law office management advisory services
Member benefits program
Legal publications
I
Section administration
Young lawyers division
Committtee expenses
Public information
Journal
I
News
Directory
Research, planning and evaluation
I
Building and grounds
Other revenue
G. Kirk Haas Fund (restricted revenue)
I
Total revenues - bUdgetary basis
$ 20,896,608
3,110,215
295,703
698,438
113,100
8,225
424,072
36,139
447,385
500,772
208,628
3,594,351
722,902
121,087
749,346
12,755
178,901
585,644
924,059
732,770
575,425
122,113
490,446
1,600,110
224,798
64,951
14,562
9,216
37,462,721
$ 20,726,323 $ 170,285
850,000 2,260,215
210,800 84,903
702,391 (3,953)
73,250 39,850
5,045 3,180
50 (50)
425,620 (1,548)
37,173 (1,034)
500,000 (52,615)
486,125 14,647
210,000 (1 ,372)
3,189,705 404,646
528,284 194,618
110,579 10,508
954,125 (204,779)
11,075 1,680
176,007 2,894
592,966 (7,322)
1,080,030 (155,971 )
815,696 (82,926)
633,097 (57,672)
5,000 (5,000)
100,509 21,604
457,290 33,156
1,419,747 180,363
248,033 (23,235)
57,105 7,846
12,500 2,062
3,500 5,716
34,622,025 2,840,696
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I
- 33
I
I The Florida Bar and Subsidiaries
I
(Continued)
I
Variance
Favorable
Expenses - budgetary basis
I
General administration
Staff and office expense 653,685 848,984 195,299
Travel 54,158 58,426 4,268
I
Internal service and administration 2,509 2,349 (160)
I
Member service project
Post employment health 1,228,899 1,203,784 (25,115)
Other operating expenses 9,557 18,174 8,617
Total general administration 1,948,808 2,131,717 182,909
Board and officer
I
I
Travel 25,178 24,696 (482)
Internal service and administration 12,146 12,791 645
Total board and officer 629,935 701,968 72,033
I
Legislation
Staff and office expense 116,085 116,663 578
Contract services 239,173 314,600 75,427
Travel 2,943 6,692 3,749
I
Internal service and administration 47,500 57,338 9,838
Total legislation 406,995 503,023 96,028
I
Authorized house counsel
I
Staff and office expense 11,373 9,593 (1,780)
Internal service and administration 11,414 6,782 (4,632)
Other operating expenses 1,298 870 (428)
Total authorized house counsel 24,085 17,245 (6,840)
I
General counsel
I
Contract services 551,424 350,536 (200,888)
Travel 2,300 5,147 2,847
Other operating expenses 164 1,394 1,230
Total general counsel 770,857 580,160 (190,697)
I
I
Division director - legal
Staff and office expense (16,355) (24,242) (7,887)
Travel 15,798 23,518 7,720
I
Internal service and administration 496 724 228
Other operating expenses 64 (64)
Total division director - legal 3 (3)
I
- 34
I
I
I
(Continued)
I
Variance
Favorable
Year ended June 30, 2007 Actual Budgeted (Unfavorable)
I
I Attorney Consumer Assistance Program
Travel 157 318 161
I
I
I
Total lawyer'regulation
Lawyer regulation
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total lawyer regulation
910,424
8,467,557
126,784
1,233,289
346,377
10,174,007
1,075,222
8,594,121
187,937
1,331,698
364,575
10,478,331
164,798
126,564
61,153
98,409
18,198
304,324
I
I
Total professional enhancement program
Professional enhancement program
Travel
26,737
7,387
3,603
1,815
39,542
33,118
12,518
5,865
4,667
56,168
6,381
5,131
2,262
2,852
16,626
I
Division director - ethics, UPL and professionalism
Travel
Less cost dist.
24,380
9,059
33
(6,798)
6,638
140
(31,178)
(2,421 )
107
I
Total division director - ethics, UPL and professionalism
(33,500)
28 20
33,500
(8)
I
I
Unlicensed practice of law
Travel
1,151,158
34,340
146,261
36,285
1,191,631
41,547
173,327
55,447
40,473
7,207
27,066
19,162
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Total unlicensed practice of law
Total lawyer assistance program/substance abuse
Lawyer assistance program/substance abuse
11,739
44,591
433,000
489,330
1,368,044
487,234
5,300
48,934
433,000
1,461,952
(2,096)
(6,439)
4,343
93,908
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- 35
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I
(Continued)
I
Variance
Favorable
I
Advertising task force
I
Travel 610 (610)
Internal service and administration 1,202 634 (568)
Other operating expenses 676 676
Total advertising task force 12,208 6,310 (5,898)
I
Ethics
I
Travel 4,366 4,004 (362)
Other operating expenses 6,677 5,493 (1,184)
Total ethics 617,534 622,961 5,427
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Lawyer advertising
I
Travel 5,462 8,125 2,663
Total lawyer advertising 685,289 703,620 18,331
I
Ethics/advertising staff pool
Staff and office expense 4 (4)
Total ethics/advertsising pool 4 (4)
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Professionalism
I
I
Travel 16,373 17,906 1,533
Total professionalism 443,941 494,954 51,013
I
Multijurisdictional practice
Other operating expenses 79 1,800 1,721
Total multijurisdictional practice 21,343 24,281 2,938
I
Florida Registered Paralegal
I
Travel 3,248 3,248
Other operating expenses 2,025 2,025
Total professionalism 55,555 56,864 1,309
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- 36
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I
(Continued)
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Variance
Favorable
I
Shipping and receiving
I
Internal service and administration 2,427 (2,427)
Other operating expenses 21 17 (4)
Less cost distribution (128,132) (154,060) (25,928)
Total shipping and receiving
I
Building and grounds
I
Staff and office expense 1,147,565 1,230,668 83,103
Travel 2,812 3,400 588
Less cost distribution (1,085,934) (1,177,757) (91,823)
Total building and grounds 64,979 57,105 (7,874)
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I
Meetings and conventions
Contract services 600 600
Travel 16,797 24,741 7,944
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Less cost distribution (21,452) (26,569) (5,117)
Total meetings and conventions 805,527 793,405 (12,122)
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Information systems
Travel 6,692 9,929 3,237
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I
Less cost distribution (3,260,639) (3,549,841 ) (289,202)
Total information systems (5) 5
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Human resource management
Travel 1,454 1,454
I
Internal service and administration 33,493 25,242 (8,251 )
Other operating expenses 28,195 28,350 155
Less cost distribution (264,754) (265,552) (798)
Total human resource management
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Division director - programs
Travel 3,139 5,726 2,587
Other operating expenses 31 229 198
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Total division director - programs 7 (7)
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- 37
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(Continued)
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Variance
Favorable
I
I Continuing legal education programs
Travel 59,500 53,578 (5,922)
Internal service and administration 1,038,400 1,055,842 17,442
Other operating expenses 1,571,957 1,383,122 (188,835)
Total continuing legal education programs 3,460,453 3,263,639 (196,814)
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Continuing legal education rule
Staff and office expense 184,719 173,018 (11,701 )
Travel 753 1,235 482
I
Internal service and administration 164,985 157,564 (7,421 )
Total continuing legal education rule 384,371 364,344 (20,027)
I
Course approval center
I
Total course approval center 121,086 113,360 (7,726)
I
Legal education and specialization pool
I
Staff and office expense (4) 4
Internal service and administration 2 (2)
Total legal education and specialization pool (2) 2
Professional development pool
I
Travel 145 (145)
I
Internal service and administration 264 34 (230)
Other operating expenses 1,492 764 (728)
Total professional development pool (7) (48,579) (48,572)
Public service programs
I
Travel 3,245 3,118 (127)
I
Total public service programs 587,527 840,499 252,972
I
Foreign legal consultants
Other operating expenses 374 374
Total foreign legal consultants 6,473 8,586 2,113
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- 38
I
22
I
(Continued)
I
Variance
Favorable
I
Print shop
I
Less cost distribution
421,873
79,635
(501,503)
449,758
22
102,790
(552,570)
27,885
23,155
(51,067)
Total print shop 5 (5)
I
Law office management advisory services
Travel 48,772 45,590 (3,182)
I
Total law office management advisory services 422,612 435,702 13,090
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I
Member benefits program
Total member benefits program 255,081 279,215 24,134
I
Legal publications
I
Travel 15,111 17,710 2,599
Total legal publications 1,195,716 1,263,093 67,377
I
Section administration
I
Travel 2,488 2,052 (436)
Other operating expenses 5,079 4,136 (943)
Total section administration 909,715 1,025,277 115,562
I
Young lawyers division
I
Travel 9,367 6,361 (3,006)
Other operating expenses 443,626 421,125 (22,501 )
Total young lawyers division 558,686 514,597 (44,089)
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I
I
- 39
I
I
I
(Continued)
I
Year ended June 30, 2007 Actual Budgeted
Variance
Favorable
(Unfavorable)
I
I
Committee
Travel
138,112
16,248
44,909
62,900
138,192
19,158
48,067
75,431
80
2,910
3,158
12,531
I
Total committee
Public information
262,169 280,848 18,679
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I
Contract services
Travel
Total public information 1,464,754
3,182
45,971
576,008
172,547
1,413,561
7,792
47,760
518,224
171,031
(51,193)
4,610
1,789
(57,784)
(1,516)
I
Office systems
I
Total office systems (4) 4
I
"Journal" - "News" staff pool
Travel
I
Total "Journal" - "News" staff pool 2 (2)
I
"Journal"
I
Travel
424,336
501
51
(424,892)
(49,520)
2,564
30,843
16,115
459,016
834
137
(459,987)
(41,234)
3,482
25,604
12,148
34,680
333
86
(35,095)
8,286
918
(5,239)
(3,967)
253,885
1,907
74,307
491,411
(6,525)
267,405
3,334
84,047
484,753
(4,312)
13,520
1,427
9,740
(6,658)
2,213
Total "Journal" 814,985 835,227 20,242
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"News"
Travel
Total "News"
482,523
9,377
83,456
1,008,517
(151,168)
1,432,705
469,422
11,737
145,202
1,014,447
(195,366)
1,445,442
(13,101)
2,360
61,746
,5,930
(44,198)
12,737
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(Continued)
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Variance
Favorable
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Directory
Less cost distribution (3,921 ) (3,921 )
Total Directory 339,731 393,682 53,951
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Finance and records
Travel 9,434 7,307 (2,127)
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Less cost distribution (1,706,964) (1 ,678,057) 28,907
Total finance and records 709,123 786,305 77,182
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Research, planning and evaluation
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Staff and office expense 137,720 137,394 (326)
Contract services 7,750 8,574 824
Travel 4,691 4,629 (62)
Internal service and administration 1,783 423 (1,360)
Total research, planning and evaluation 160,329 162,001 1,672
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Division directors - administration
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Travel 15 590 575
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Less cost distribution (135,423) (200,604) (65,181 )
Total division directors - administration
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G. Kirk Haas Fund (restricted fund) 3,000 2,000 (1,000)
Total expenses 32,556,922 33,631,319 1,074,397
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Excess of revenues over expenses - bUdgetary basis $ 4,905,799 $ 990,706 $ 3,915,093
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General Fund Reconciliation of Revenues and Expenses on a
Budgetary Basis to Totals Per the Consolidating Schedule of
Statement of Revenues, Expenses and Changes in Net Assets
Excess of
Revenues
Operating Over(Under)
Year ended June 30, 2007 Revenues Expenses Expenses
Totals on budgetary basis
Add:
Subsidiary operations
Florida Lawyers Association for the Maintenance of
Excellence, Inc.
The Florida Attorneys Charitable Trust
Less:
Adjustments for financial statement presentation purposes
Net change in the fair value of investments
Budgeted items treated as interfund transfers for basic
financial statement purposes
Depreciation
$ 37,462,721 $ 32,556,922 $ 4,905,799
16,657 74,846 (58,189)
63,085 1,926 61,159
(3,126,872) (3,126,872)
(544,432) 544,432
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Total operating revenues, expenses and income per Consolidating
Schedule of Statement of Revenues, Expenses and Changes in
Net Assets $ 34,415,591 $ 32,089,262 $ 2,326,329
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Clients' Security Fund Schedule of Budgeted and Actual Revenues and Expenses
Year ended June 30, 2007
Operating revenues
Annual contribution *
Recoveries
Total operating revenues
Operating expenses
Contract services
Travel
Claims paid
Total operating expenses
Operating income (loss)
Investment earnings
Total non-operating revenues
Change in net assets
Actual Budget
Variance
Favorable
(Unfavorable)
$ 1,542,636
81,001
1,623,637
$ 1,542,640
36,750
1,579,390
$ (4)
44,251
44,247
105,020
131,677
6,654
61,713
851,943
3,730
1,160,737
117,589
65,000
6,650
121,374
3,542,640
5,007
3,858,260
12,569
(66,677)
(4)
59,661
2,690,697
1,277
2,697,523
462,900 (2,278,870) 2,741,770
388,230
388,230
175,000
175,000
213,230
213,230
$ 851,130 $ (2,103,870) $ 2,955,000
* The annual contribution from the general fund is treated as a budgeted revenue item on this
statement. However, it is treated as an interfund transfer in the basic financial statements section
of this report. The difference between the budget basis statement and the basic financial statement
is reconciled as follows:
Change in net assets - budgetary basis $ 851,130
Less: annual contribution treated as an interfund
transfer on the basic financial statements (1,542,636)
Change in net assets per Consolidating Schedule of
Statement of Revenues, Expenses and Changes in
Net Assets $ (691,506)
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Certification Fund Schedule of Budgeted and Actual Revenues and Expenses
I Variance
Favorable
Year ended June 30, 2007 Actual Budget (Unfavorable)
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Operating revenues
Member Fees $ 1,074,551
Sales 5,515
Total operating revenues 1,080,066
Operating expenses
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Contract services
Travel
607,298
18,078
43,658
103,290
164,090
Total operating expenses 936,414
Operating income (loss) 143,652
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(7,837) 151,489
Investment earnings 48,322 25,000 23,322
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Total non-operating revenues 48,322 25,000 23,322
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Change in net assets per Consolidating Schedule of
Statement of Revenues, Expenses and Changes in
Net Assets $ 191,974 $ 17,163 $ 174,811
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$ 992,712 $ 81,839
8,925 (3,410)
1,001,637 78,429
655,567 48,269
21,750 3,672
42,245 (1,413)
121,302 18,012
168,610 4,520
1,009,474 73,060
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Sections Fund Schedule of Budgeted and Actual Revenues and Expenses
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Variance
Favorable
Revenues - budgetary basis
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Real property, probate and trust law $ 1,439,306 $ 891,555 $ 547,751
Trial lawyers 267,636 332,243 (64,607)
Business law 305,139 241,503 63,636
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General practice 159,401 88,463 70,938
Family law 643,273 338,566 304,707
City, county, and local government 58,454 55,025 3,429
Workers' compensation 75,090 87,232 (12,142)
Tax law 305,786 353,289 (47,503)
Criminal law 109,922 76,015 33,907
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Administrative law 38,399 38,321 78
Environmental and land use law 130,380 61,658 68,722
Practice management and technology 8,707 10,979 (2,272)
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Labor and employment law 98,084 117,627 (19,543)
International law 124,746 115,322 9,424
Entertainment, arts and sports law 33,108 53,396 (20,288)
Health law 30,550 49,421 (18,871 )
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Public interest law 5,405 5,801 (396)
Government lawyers 7,986 33,595 (25,609)
Elder law 131,515 122,475 9,040
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Out-of-state practice 15,157 26,456 (11,299)
Appellate practice and advocacy 50,872 38,351 12,521
Equal opportunity law 7,740 4,070 3,670
Council of sections 266 3,450 (3,184)
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Total revenues - budgetary basis 4,046,922 3,144,813 902,109
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- 45
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Sections Fund Schedule of Budgeted and Actual Revenues and Expenses
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(Continued)
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Variance
Favorable
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Operating expenses - budgetary basis
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Real property, probate and trust law $ 970,288 $ 859,012 $ (111,276)
Trial lawyers 157,311 200,104 42,793
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Business law 213,976 232,292 18,316
General practice 103,946 109,309 5,363
Family law 617,019 211,039 (405,980)
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City, county, and local government 54,071 89,388 35,317
Workers' compensation 105,859 138,027 32,168
Tax law 296,607 346,891 50,284
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Criminal law 57,447 91,254 33,807
Administrative law 13,464 67,226 53,762
Environmental and land use law 78,744 135,293 56,549
Practice management and technology 6,638 20,822 14,184
Labor and employment law 52,331 100,186 47,855
International law 78,518 113,472 34,954
Entertainment, arts and sports law 22,991 59,700 36,709
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Health law 32,417 60,861 28,444
Public interest law 8,729 13,353 4,624
Government lawyers 12,817 24,912 12,095
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Elder law 74,144 122,787 48,643
Out-of-state practice 20,060 35,940 15,880
Appellate practice and advocacy 62,005 53,393 (8,612)
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Equal opportunity law 4,343 4,781 438
Council of sections 7,800 7,490 (310)
Total expenses - budgetary basis 3,051,525 3,097,532 46,007
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Change in net assets per the Consolidating Schedule of
Statement of Revenues, Expenses and Changes in Net
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Assets $ 995,397 $ 47,281 $ 948,116
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Other Reports
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CARR, RIGGS & INGRAM, LlC
! l ~ CRI
CAR R
RIGGS &
INGRAM
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Board of Directors
The Florida Bar
Tallahassee, Florida
We have audited the basic financial statements of The Florida Bar and Subsidiaries as of
and for the year ended June 30, 2007, and have issued our report thereon dated October
4, 2007. We conducted our audit in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered The Florida Bar and Subsidiaries'
internal control over financial reporting as a basis for designing our auditing procedures for
the purpose of expressing our opinions on the financial statements, but not for the purpose
of expressing an opinion on the effectiveness of The Florida Bar and Subsidiaries' internal
control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of The Florida Bar and Subsidiaries' internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. A significant deficiency is a control
deficiency, or combination of control deficiencies, that adversely affects the The Florida Bar
and Subsidiaries' ability to initiate, authorize, record, process, or report financial data
reliably in accordance with generally accepted accounting principles such that there is more
than a remote likelihood that a misstatement of The Florida Bar and Subsidiaries' financial
statement that is more than inconsequential will not be prevented or detected by The
Florida Bar and Subsidiaries' internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies,
that results in more than a remote likelihood that a material misstatement of the financial
statements will not be prevented or detected by The Florida Bar and Subsidiaries' internal
control.
Alabama Society of
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Florida Institute of
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Georgia Society of
Mississippi Society of
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AICPA Alliance for CPA Firms
Center for Audit Quality
- 47
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1713 Mahan Drive
Tallahassee, FL 32308
PI 850 878 8777
FI 850 878 2344
www.cricpa.com
American Institute of
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Board of Directors
The Florida Bar
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Our consideration of internal control over financial reporting was for the limited purpose described
in the first paragraph of this section and would not necessarily identify all deficiencies in internal
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control that might be significant deficiencies or material weaknesses. We did not identify any
deficiencies in internal control over financial reporting that we consider to be material weaknesses,
as defined above.
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Compliance and Other Matters
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As part of obtaining reasonable assurance about whether The Florida Bar and Subsidiaries'
financial statements are free of material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which
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could have a direct and material effect on the determination of financial statement amounts.
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However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance that are required to be reported under Government Auditing
Standards.
We have noted other matters that we have reported to the management of The Florida Bar in a
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separate letter dated October 4, 2007.
This report is intended solely for the information
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management and is not intended to be and should
specified parties.
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October 4,2007
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and use of the Board of Directors and
not be used by anyone other than these

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