The Florida Bar and Subsidiaries

Financial Statements
June 30, 2015 and 2014

The Florida Bar and Subsidiaries

Table of Contents
June 30, 2015 and 2014
Independent Auditors Report

1-2

Managements Discussion and Analysis

3-7

Consolidated Financial Statements

Consolidated Statements of Net Position

Consolidated Statements of Revenues, Expenses, and Changes in Net Position

Consolidated Statements of Cash Flows

10 - 11

Notes to Consolidated Financial Statements

12 - 28

Other Report
Independent Auditors 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

29- 30

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, 2015 and 2014, and the related notes to the financial statements, which collectively
comprise The Florida Bars basic consolidated financial statements as listed in the table of
contents.
Managements Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in the United
States of America; this includes the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on
our audits. We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entitys preparation and fair
presentation of the consolidated financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the respective financial position of the business-type activities of The Florida
Bar, as of June 30, 2015 and 2014, and the respective changes in financial position and cash
flows thereof for the years then ended in accordance with accounting principles generally
accepted in the United States of America.

Board of Governors
The Florida Bar
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
managements discussion and analysis on pages 3 through 7 is presented to supplement the
basic consolidated financial statements. Such information, although not a part of the basic
consolidated financial statements, is required by the Governmental Accounting Standards
Board, who considers it to be an essential part of financial reporting for placing the basic
consolidated financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with managements responses to our inquiries, the
basic consolidated financial statements, and other knowledge we obtained during our audit of
the basic consolidated financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the consolidated financial
statements that collectively comprise The Florida Bars basic consolidated financial statements.
The supplementary information is presented for purposes of additional analysis and is not a
required part of the basic consolidated financial statements.
The supplementary information is the responsibility of management and was derived from and
relate directly to the underlying accounting and other records used to prepare the basic
consolidated financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic consolidated financial statements and certain
additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the
basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the
supplementary information is fairly stated, in all material respects, in relation to the basic
consolidated financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 4, 2015 on our consideration of The Florida Bars internal control over financial
reporting and on our tests of its compliance with certain provisions of law, 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 internal control over financial reporting
or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering The Florida Bars internal control over financial
reporting and compliance.

CARR, RIGGS & INGRAM, LLC

Tallahassee, FL
December 4, 2015

Managements Discussion and Analysis

The Florida Bar and Subsidiaries

Managements Discussion and Analysis

With more than 100,000 members, The Florida Bar is the statewide professional and regulatory
organization for lawyers. 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
The Supreme Court of Floridas regulation of all lawyers licensed to practice law in Florida (Article
V, 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,
promoting professionalism and pursuing justice. The following managements discussion and
analysis is intended to provide the readers of The Florida Bars financial statements a general
overview of the financial activities during the last two fiscal years (FY) that ended on June 30,
2015 and 2014.
Financial Highlights
The Florida Bars total net position decreased approximately $1.3 million (or -2.1%) in FY15 as
compared to FY14 as a result of an operating loss of almost $1.3 million and an investment loss
of $183,294. In FY14, the Florida Bars total net position increased $6.1 million (or 10.8%) as
compared to FY13 resulting from a combination of operating income of $723,880 and an
investment gain of $5.4 million.
Total operating revenues for FY15 increased by $673,496 (or 1.5%) as compared to FY14 and
increased $1.4 million (or 3.4%) in FY14 as compared to FY13. The increase in FY15 was
comprised of an increase in membership and other fees from members as well as growth in sales
of products and services. The increase in operating revenue in FY14 consisted of growth in
membership supplemented by a pick-up in court ordered restitution and advertising revenue.
Total operating expenses increased approximately $2.7 million (or 6.1%) in FY15 and $1.4 million
(or 3.4%) in FY14. The increase in operating expenses in FY15 included a combination of a
complex disciplinary case in South Florida that necessitated the use of outside counsel, an
increase in claims paid by the Client Security Fund, and necessary improvements to the
technology infrastructure. The increase in operating expenses in FY14 came primarily as a result
of increasing health care and other employment related costs.
The resources available to spend for the General Fund of The Florida Bar were approximately
$1.4 million less than budgeted for FY15 and were approximately $2.6 million more than
budgeted for FY14. These results were primarily attributable to the actual gains and losses
incurred by the General Funds share of The Florida Bars investment income which was
budgeted at $1.5 million for both years and experienced an actual loss for the General Fund of
$127,560 for FY15 and an actual gain of $3.9 million for FY14. The Florida Bar was able to keep
expenses within budgeted limits in both years.
Overview of the Financial Statements
This annual report consists of three parts managements discussion and analysis, the basic
consolidated financial statements, and an optional section that presents supplementary
information. The supplementary information includes consolidating schedules 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 which are to serve as the statewide
regulator 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.

-3-

The Florida Bar and Subsidiaries

Managements Discussion and Analysis

The Consolidated Statement of Net Position includes all of The Florida Bars assets and liabilities.
The net position is the difference between The Florida Bars assets and liabilities. The
Consolidated Statement of Revenues, Expenses, and Changes in Net Position include all of The
Florida Bars revenues and expenses regardless of when the cash is received or paid. A
Consolidated Statement of Cash Flows provides additional information regarding the change in
The Florida Bars cash position. The notes (beginning on page 12) are an integral part in providing
a full understanding of The Florida Bars financial statements.
Summary of Operations and Condensed Consolidated Financial Information
CONDENSED CONSOLIDATED STATEMENTS OF NET POSITION

2015

June 30,

2013

2014

% Change

% Change

2014-2015

2013-2014

Assets
Current assets

Capital assets, net

Other non-current assets
Total assets

70,770,430 $
10,239,598
3,000,000
84,010,028

73,302,786 $ 66,124,233
10,734,193
10,363,930
76,858,426
83,666,716

-3.5%
-1.2%
100.0%
0.4%

10.9%
-3.4%
0.0%
8.9%

20,112,428
2,565,462
22,677,890

18,549,400
2,439,156
20,988,556

17,771,868
2,519,415
20,291,283

8.4%
5.2%
8.0%

4.4%
-3.2%
3.4%

10,239,598

10,363,930

10,734,193

-1.2%

-3.4%

99,978

100.0%

0.0%

50,008
58,967
45,782,942
52,255,263
62,678,160 $ 56,567,143

8.2%
-2.5%
-2.1%

17.9%
14.1%
10.8%

Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net position
Invested in capital assets,
net of related debt
Restricted for permanent
endowment
Restricted for expendable
scholarships
Unrestricted
Total net position

63,803
50,928,759
61,332,138 $

The Florida Bars cash and investments decreased to $68.8 million in FY15 from $71.8 million in
FY14 and increased to $71.8 million in FY14 from $64.4 million in FY13. The decrease in cash
and investments in FY15 was largely due to a $3.0 million loan to the Florida Bar Foundation to
assist with programs to improve access to justice for all Florida citizens. The increase in FY14
reflected the addition of cash provided by operations of $2.8 million and the cash earnings on the
investment portfolio of $4.4 million. The decrease in capital assets to June 30, 2015 from June 30,
2013 has been a function of the aging of The Florida Bars investment in its building,
improvements, and internally developed software which is reflected as depreciation and
amortization.

-4-

The Florida Bar and Subsidiaries

Managements Discussion and Analysis

Total net position of the Florida Bar decreased to $61.3 million in FY15 from $62.7 million in FY14,
a decrease of $1.4 million or 2.1%. The largest portion of the Florida Bars net position reflects its
substantial investment portfolio of $54.6 million. This portfolio allows the Florida Bar to continue to
delay increasing the required annual fees charged to its members to regulate the practice of law in
Florida. The last membership fee increase was over 14 years ago.
The remaining balance of net position reflects the Florida Bars investment in capital assets (e.g.
land, buildings, and equipment) as well as assets restricted by donors. The Florida Bar uses the
capital assets to provide services to its members, and the restricted assets may only be used for
the donor-specified purposes; consequently these assets are unavailable for future operational
spending.
For more detailed information, see the accompanying Consolidated Statements of Net Position.
CONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
June 30,
Operating revenues

2015

Operating expenses
Net operating income
Non-operating revenues
Non-operating expenses
Net non-operating revenues
Change in net position
Net position, beginning
Net position, ending

2014

2013

44,849,107 $ 44,175,611 $ 42,708,054

(46,110,311)
(43,451,727) (42,032,019)
(1,261,204)
723,884
676,035

% Change

% Change

2014-2015

2013-2014

1.5%
6.1%
-274.2%

3.4%
3.4%
7.1%

100,000
(184,818)
(84,818)

5,394,950
(7,817)
5,387,133

2,528,194
(5,778)
2,522,416

-98.1%
2264.3%
-101.6%

113.4%
35.3%
113.6%

(1,346,022)
62,678,160

6,111,017
56,567,143

3,198,451
53,368,692

-122.0%
10.8%

91.1%
6.0%

61,332,138 $

62,678,160 $ 56,567,143

-2.1%

10.8%

While the Florida Bar has not increased the annual fee required by its members, the revenue from
annual fees received by The Florida Bar have consistently increased by approximately 2% per
year, commensurate with the membership growth rate. This was supplemented by additional
collections for court ordered disciplinary costs as well as sales of continuing education products
and other membership services. The growth in fees in FY15 was offset by reductions in other
revenue sources such as income from advertising in The Bar News and Journal and proceeds from
events and programs sponsored by the Young Lawyers division.
Operating expenses increased 6.1% in FY15 which reflects the addition of several new programs
such as Vision 2016, the Access to Justice Commission, and continuing upgrades to The Florida
Bars technology infrastructure. The 3.4% increase in operating expenses in FY14 was related in
part to the start-up of the Vision 2016 program, the Leadership Academy program, and required
repairs on the headquarters building.
Non-operating revenues decreased in FY15 because of the unfavorable investment climate.
For more detailed information, see the accompanying Consolidated Statements of Revenues,
Expenses, and Changes in Net Position.
-5-

The Florida Bar and Subsidiaries

Managements Discussion and Analysis
Budgetary Highlights
For the years ended June 30, 2015 and 2014, The Florida Bars budget funded most departments
at a continuation level. The original operating budgets for the General Fund (excluding the whollyowned subsidiary and controlled entities) approved by the Florida Supreme Court, planned on a
decrease in net assets of ($852,388) and an increase of $1,910,380 for FY15 and FY14,
respectively before transfers to other funds. After Board of Governor amendments, the planned
decrease for FY15 became ($1,743,752) and the planned increase for FY14 became $1,445,714.
For FY15, significant budget amendments included funding for hiring outside counsel to assist with
a complicated multi-attorney discipline case, hiring a consultant to assist with the new commission
on Access to Justice and hiring a consultant to assist with an IT strategic plan. For FY14,
significant budget amendments included the creation of a new program to study the future of the
practice of law, special funding to educate the general public about law related topics, and the
implementation of a new website platform and layout.
Included in the supplemental information is an actual to budget comparison for each department for
FY15.
CAPITAL ASSETS
The Florida Bar invested the following in Capital Assets:
June 30,
Land

2015

Building and improvements

Landscaping and parking
Equipment and furnishings
Software
Software in development
Construction in progress

2014

2013

1,306,690 $
11,433,722
120,318
4,948,878
5,497,229
923,303
-

1,306,690 $ 1,306,690
11,346,008
11,349,427
120,318
120,318
4,874,529
4,831,457
5,108,938
4,431,345
393,822
280,310
11,220

24,230,140

23,150,305

(13,990,542)

(12,786,375)

% Change

% Change

2014-2015

2013-2014

0.0%
0.8%
0.0%
1.5%
7.6%
134.4%
0.0%

0.0%
0.0%
0.0%
0.9%
15.3%
40.5%
-100.0%

22,330,767

4.7%

3.7%

(11,596,574)

9.4%

10.3%

10,363,930 $ 10,734,193

-1.2%

-3.4%

Total, prior to depreciation and

amortization
Accumulated depreciation
and amortization
Net capital assets

10,239,598 $

Additions to software and software in development account for the majority of the increases in
capital assets and included costs of developing new programs or significantly updating ones
already in use. For FY15, this was largely due to continued work to update and improve The
Florida Bars website. Presently, The Florida Bar has no plans to significantly alter its
investment in capital assets other than to redesign the IT infrastructure and replace old legacy
systems.

-6-

The Florida Bar and Subsidiaries

Managements Discussion and Analysis

Future Financial Plan

The Florida Bar was created by the Supreme Court of Florida to assist the Supreme Court in
regulating the practice of law in Florida. The Florida Bar is primarily funded through required
annual fee payments by lawyers, sales of continuing education programs to lawyers, and other
fees for the regulation of attorneys or sales of legal related products and services. 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.

-7-

Consolidated
Financial Statements

The Florida Bar and Subsidiaries

Consolidated Statements of Net Position

June 30,
Assets
Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Prepaid expenses and other assets
Total current assets
Noncurrent assets
Capital assets, net:
Land and improvements
Software and software development in process
Accumulated depreciation and amortization
Total capital assets, net

2015

2014

$ 14,186,122
54,646,328
953,486
984,494
70,770,430

$ 18,517,501
53,331,083
731,293
722,909
73,302,786

17,809,608
6,420,532
(13,990,542)
10,239,598

17,647,545
5,502,760
(12,786,375)
10,363,930

Other non-current assets

Note receivable due in more than one year
Total other non-current assets
Total assets

3,000,000
3,000,000
84,010,028

83,666,716

Liabilities
Current liabilities
Accounts payable
Client Security Fund claims payable
Accrued expenses
Unearned revenues
Security deposits
Total current liabilities

2,049,500
1,001,043
1,278,010
15,734,941
48,934
20,112,428

1,806,666
1,332,838
1,263,803
14,097,164
48,929
18,549,400

Non-current liabilities
Compensated absences payable
Total non-current liabilities
Total liabilities

2,565,462
2,565,462
22,677,890

2,439,156
2,439,156
20,988,556

10,239,598
99,978
63,803
50,928,759
$ 61,332,138

10,363,930
58,967
52,255,263
$ 62,678,160

Net Position
Net investment in capital assets
Restricted for permanent endowment
Restricted for expendable scholarships
Unrestricted
Total net position

See accompanying notes to the consolidated financial statements.

-8-

The Florida Bar and Subsidiaries

Consolidated Statements of Revenues, Expenses and Changes in Net Position

Years ended June 30,

2015

Operating revenues
Annual fees
Other fees from members
Sales of products and services
Communication with members and the public
Young lawyers
Other revenue
Total operating revenues

25,586,032
7,024,507
9,240,309
1,435,030
1,010,177
553,052
44,849,107

Operating expenses
Regulation of the practice of law
Cost of products and services provided to members
Unauthorized practice of law
Public service programs
Communications with members and the public
Administration
Legislation
Young lawyers
Depreciation and amortization
Other programs and costs
Total operating expenses

18,657,818
10,333,661
1,684,219
3,306,055
4,081,577
3,324,911
581,926
961,875
1,409,854
1,768,415
46,110,311

Operating (loss) income

(1,261,204)

Non-operating (expenses) revenues

Investment (loss) earnings
Additions to permanent endowment
Loss on disposal of capital assets
Total non-operating (expenses) revenues

2014
$

25,061,587
6,817,452
9,166,020
1,523,156
1,058,690
548,706
44,175,611
17,758,333
10,578,827
1,671,903
2,261,160
3,982,243
2,666,458
571,916
832,757
1,324,280
1,803,850
43,451,727
723,884

(183,294)
100,000
(1,524)
(84,818)

5,394,950
(7,817)
5,387,133

Change in net position

(1,346,022)

6,111,017

Total net position, beginning of year

62,678,160

56,567,143

Total net position, end of year

61,332,138

See accompanying notes to the consolidated financial statements.

-9-

62,678,160

The Florida Bar and Subsidiaries

Consolidated Statements of Cash Flows

Years ended June 30,

Cash flows from operating activities:
Receipts from members, customers and other sources
Payments to employees, suppliers and other vendors
Net cash flows from operating activities
Cash flows from non-capital financing activities:
Permanent endowment donations
Net cash flows from non-capital financing activities
Cash flows from capital financing activities:
Acquisition of capital assets
Net cash flows from capital and related financing activities

2015

2014

$ 47,590,060
(46,235,876)
1,354,184

$ 48,371,137
(45,604,319)
2,766,818

100,000
100,000

(1,287,046)
(1,287,046)

(925,180)
(925,180)

28,731,385
(28,381,357)
(3,000,000)
(1,848,545)
(4,498,517)

25,870,733
(32,679,170)
4,430,859
(2,377,578)

Net decrease in cash and cash equivalents

(4,331,379)

(535,940)

Cash and cash equivalents, beginning of year

18,517,501

19,053,441

$ 14,186,122

$ 18,517,501

Cash flows from investing activities:

Redemption of investments
Purchase of investments
Payments to make loan
Investment (loss) income, net
Net cash flows from investing activities

Cash and cash equivalents, end of year

See accompanying notes to the consolidated financial statements.

- 10 -

The Florida Bar and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

Years ended June 30,

2015

2014

Reconciliation of operating (loss) income to net cash

flows from operating activities:
Operating (loss) income
$ (1,261,204)
Adjustments to reconcile operating (loss) income to net cash
provided by operating activities:
Depreciation and amortization
1,409,854
(Increase) decrease in:
Accounts receivable, net
(222,193)
Prepaid expenses and other assets
(261,585)
Increase (decrease) in:
242,834
Accounts payable
Claims payable
(331,795)
Accrued expenses
14,207
Unearned revenues
1,637,755
Security deposits
5
Compensated absences payable
126,306
Net cash flows from operating activities
$ 1,354,184

27,522
(735,509)
47,916
1,400,946
3
(80,259)
2,766,818

Non-cash investing, capital, and other financing acitivities

Change in the fair value of investments
Loss on disposal of assets

$
$

3,739,662
(7,817)

$ (2,266,294)
$
(1,524)

See accompanying notes to the consolidated financial statements.

- 11 -

723,884

1,324,280
(87,190)
145,225

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 1 NATURE OF BUSINESS

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
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.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
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
provisions of Statement No. 34 (Statement No. 34) of the Governmental Accounting Standards
Board (GASB) Basic Financial Statements and Managements Discussion and Analysis for
State and Local Governments, as amended by Statement No. 37.
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
financially accountable, be required to be included in The Florida Bars financial statements. The
Florida Bar is financially accountable if it appoints a voting majority of an organizations governing
board and (1) it is able to impose its will on an organization or (2) there is a potential for an
organization to provide specific financial benefit to or impose specific financial burden on The
Florida Bar. Additionally, The Florida Bar is required to consider other organizations for which the
nature and significance of their relationship with The Florida Bar are such that exclusion would
cause the reporting entitys financial statements to be misleading or incomplete. Managements
analysis has disclosed no component units that should be included in The Florida Bars financial
statements.
Basis of Presentation
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
continuing basis are to be financed through user charges; or (2) where the periodic determination
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 funds ongoing operations.
Operating expenses for The Florida Bar include the costs of personnel, contractual services,
supplies, utilities, repairs and maintenance, and depreciation and amortization of capital assets. All
revenues and expenses not meeting this definition are reported as non-operating revenues and
expenses.

- 12 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of Accounting
Basis of accounting refers to when revenues and expenses are recognized in the accounts and
reported in the financial statements. These consolidated financial statements have been 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 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 assets and liabilities, current and non-current, are
accounted for in the Consolidated Statements of Net Position.
Cash and Cash Equivalents
All demand deposit accounts and short-term highly liquid investments with original maturities of
three months or less are reported as cash equivalents.
Investments
Investments are reported at fair values. Fair values for securities traded on national or international
exchanges or over-the-counter are valued at quoted market prices. Fair values of securities not
traded on an exchange or over-the-counter are estimated based on the net asset values provided
by the investee calculated in accordance with FASB Topic 946.
Capital Assets
Capital assets are stated at cost less accumulated depreciation and amortization. The value of
software developed for The Florida Bars use includes all direct and indirect costs that are related
to development activities. The costs of capital assets are depreciated or amortized over the
estimated useful lives of the related assets, ranging from 3 to 40 years, using the straight-line
method. When capital assets are retired or otherwise disposed of, the costs and related
accumulated depreciation or amortization are removed from the accounts and any resulting gain or
loss is reflected in the Consolidated Statements of Revenues, Expenses and Changes in Net
Position, in the period of disposal.
Claims Payable
The Florida Bar voluntarily created the Clients Security Fund (the Fund) to provide possible
compensation to people who have suffered financial losses due to misappropriation of funds by
errant Florida Bar members. The Fund is financed by $25 of the annual fees due from each Florida
Bar member who is in good-standing (including inactive members). Claims payable represent
amounts that have been approved for payment from the Fund.
Unearned Revenues
Unearned revenues consist primarily of membership fees collected in advance, prepaid advertising
and prepaid legal education courses.

- 13 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Allocation of Expenses
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
Position. Accordingly, certain costs have been allocated among the programs and supporting
services benefited.
Principles of Consolidation
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.
Income Taxes
The Florida Bar is an administrative agency of the Supreme Court of Florida 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
Sections 501(c)(25), 501(c)(6), and 501(c)(3), respectively, of the Internal Revenue Code.
Estimates
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
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
The Florida Bar receives the majority of its revenue from lawyers licensed to practice in the State of
Florida.
Net Position
Net position is categorized as invested in capital assets, restricted for permanent endowments,
restricted for expendable scholarships, and unrestricted. Invested in capital assets represents the
cost of capital assets net of accumulated depreciation and amortization and is unavailable for
future spending. Restricted for permanent endowment includes donations in which the donor has
stipulated, as a condition of the gift, that the principal be held and invested and only the investment
earnings may be spent. Restricted for expendable scholarships consists of donations received that
must be used to fund the annual G. Kirk Haas scholarships. Unrestricted assets consist of all other
assets not included in the previous categories and are available for any lawful purpose.
Subsequent Events
Subsequent events have been evaluated through the date of the independent auditors report,
which is the date the financial statements were available to be issued.
- 14 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Reclassifications
Certain revenue and expense categories for the year ended June 30, 2014 were reclassified to
conform to the current year presentation.
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 Bars cash and cash equivalents may
not be returned. The Florida Bars 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 the risk to be limited because the financial institutions are large with strong financial
positions.
Cash and cash equivalents are held at three financial institutions. The cash held in demand deposit
accounts was $7,728,154 and additional cash and money market funds was $6,457,968 at June
30, 2015. Cash in the amount of $1,247,152 was insured by the Federal Deposit Insurance
Corporation (FDIC) as of June 30, 2015. The additional cash and money market funds are held at
a financial institution insured by the Securities Investor Protection Corporation (SIPC). As of June
30, 2015, the SIPC provides up to $250,000 in coverage for uninvested cash and money market
funds not otherwise covered by the FDIC.
NOTE 4 INVESTMENTS
Investment Objectives and Policies
Investments are made for the sole interest and exclusive purpose of providing investment
returns for The Florida Bar. The Florida Bars investment objectives and policies are achieved
through a short-term account portfolio and a long-term account portfolio, however, all
investments are available for sale if necessary and are classified as a current asset in the
consolidated statements of net position.
Investment guidelines are defined by a written Investment Policy (the Policy) approved by the
Florida Bars Board of Governors. The Policy establishes diversified investment strategies, both
by types of investment and by manager, minimum credit qualities, and duration limits. An
Investment Committee has oversight, within Policy limits, to implement and direct the
investment strategies. The policies are reviewed at least annually for any adjustments required
due to changes or developments within the investment markets that may provide enhanced
investment and/or risk management opportunities, and recommendations for changes are
submitted for approval by the Board of Governors.
The purpose of the short-term portfolio is to provide for The Florida Bars short-term working
capital needs. The short-term portfolio possesses a short-term time horizon (one to three years)
and within this horizon, the primary objectives are to preserve capital and provide liquidity for
short-term cash flow needs and to achieve attractive short-term yields consistent with
preservation of capital.
- 15 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 4 INVESTMENTS (CONTINUED)

Investment Objectives and Policies (Continued)
The purpose of the long-term investment portfolio is to provide for The Florida Bars operating
needs and to fund The Florida Bars programs both today and into the future. The long-term
portfolio possesses an intermediate to long-term horizon (five to seven years) that correlates to
the primary objectives of providing long-term growth of capital and income. The secondary
objectives are high current income and liquidity.
The Policy requires the risk adjusted returns of an investment over a full market cycle to rank in
the top 50% of universal comparisons with similar objectives and the investment should
outperform the target policy index. The Policy establishes asset allocation guidelines with regard
to acceptable asset classes and prohibited investments, the overall targeted asset mix, and the
representative indices for each asset class. The asset allocation guidelines as compared to
actual investment balances were as follows as of June 30, 2015:
Short-Term
Representative

Minimum

Target
Mix

Maximum

Actual

Short-Term Fixed income

35.0%

50.0%

65.0%

35.0%

Index

Cash and Equivalents

35.0%

50.0%

65.0%

65.0%

Citigroup U.S. 90-Day Treasury Bills Index

Asset Classes

Index

Long-Term
Representative

Target
Asset Classes

Minimum

Mix

Maximum

Index

Actual

U.S. Large Cap Equity

12.0%

17.0%

22.0%

15.8%

Standard & Poor's 500 Index

U.S. Mid Cap Equity

0.0%

4.0%

9.0%

4.5%

Russell Mid Cap Index

U.S. Small Cap Equity

0.0%

2.0%

7.0%

2.2%

Russell 2000 Index

International Equity

10.0%

15.0%

20.0%

19.0%

Int'l Small/Mid Cap Equity

0.0%

2.0%

7.0%

2.0%

MSCI EAFE Index

MSCI EAFE Small Cap Index or MSCI EAFE Small/Mid
Cap Index

Emerging Markets Equity

0.0%

5.0%

10.0%

5.1%

MSCI Emerging Markets Index

Commodities

1.0%

6.0%

11.0%

6.1%

Dow Jones UBS Commodity Index

REITs

0.0%

3.0%

8.0%

0.9%

NAREIT Equity Index or Dow Jones Global Select REIT

Inflation-linked Securities

0.0%

2.0%

7.0%

1.0%

Emerging Market Fixed Income

0.0%

2.0%

7.0%

0.0%

Barclays Capital U.S. TIPS Index

JP Morgan Emerging Markets Bond Index or JP Morgan
Emerging Market Bond Index (unhedged)

U.S. Fixed Income

15.0%

22.0%

29.0%

18.3%

Barclay's Capital Intermediate Gov't/Credit Bond Index

U.S. High Yield Fixed Income

0.0%

4.0%

9.0%

3.9%

Hedged Funds

0.0%

6.0%

9.0%

9.3%

Liquid Alternatives

0.0%

3.0%

8.0%

7.2%

Barclay's Capital U.S. Corporate High Yield Index

HFRI Conservative Index or Hedge Fund of Funds
Composite Index
60% MSCI ACWI/40% Barclays Capital Global
Aggregate

Managed Futures

0.0%

2.0%

5.0%

2.4%

Barclay's CTA Index

Cash & Equivalents

0.0%

5.0%

10.0%

2.3%

Citigroup U.S. 90-Day Treasury Bills

Performance and compliance reports are submitted to the Investment Committee quarterly. The
Florida Bar employs an investment consultant who provides performance and compliance
reporting at both the portfolio level and by individual investment manager.
- 16 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 4 INVESTMENTS (CONTINUED)

Investments
At June 30, The Florida Bars investment balances were as follows:
June 30,
U.S. Treasuries
Federal Agencies
Municipal Bonds
Corporate Bonds & Other Fixed Income
Mutual Funds - debt securities (ST)
Mutual Funds - equity securities
Mutual Funds - commodities
Inflation-linked securities
Equities
Managed Futures
Liquid Alternatives
Hedge Funds
Total investments

2015
1,036,636
2,327,071
731,414
4,803,960
8,378,474
3,122,439
2,474,214
500,889
21,702,544
1,285,044
3,608,559
4,675,084
54,646,328

2014
438,980
2,828,060
651,546
4,807,847
7,549,186
1,521,635
3,938,845
23,551,459
946,113
2,967,934
4,129,478
53,331,083

The Florida Bars investment securities are exposed to various risks, such as custodial credit
risk, interest rate risk, credit quality risk, foreign currency risk, concentration of credit risk, and
market conditions. Due to the level of risk associated with certain investment securities, it is at
least reasonably possible that changes in the value of investment securities will occur in the
near term and those changes could materially affect investment balances.
Custodial Credit Risk
Custodial credit risk is the risk that in the event of the failure of the custodial entity, The Florida
Bars deposits may not be returned to it. The Policies state that 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. Investments held through its agent, Morgan
Stanley Smith Barney, LLC have Securities Investor Protection Corporation (SIPC) coverage up
to $500,000 per customer for cash and securities as of June 30, 2015 of which $250,000 may
be in uninvested cash. Morgan Stanley Smith Barney, LLC also has purchased Excess SIPC
protection above the SIPC limits. This excess coverage is subject to a firmwide cap for Morgan
Stanley of $1 billion with no per-client limit for securities and a $1.9 million per-client limit for the
cash portion of any remaining shortfall.
Interest Rate Risk
Interest rate risk arises from investments in debt instruments and is defined as the risk that
changes in interest rates will adversely affect the fair value of an investment. The Florida Bars
investments in U.S. Treasuries, federal agencies, municipal bonds, corporate bonds, and other

- 17 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 4 INVESTMENTS (CONTINUED)

Interest Rate Risk (Continued)
bonds are directly subject to interest rate risk. The interest rate risk is managed by requiring the
duration of the fixed income portfolio to average between plus or minus 20% of the duration of
the representative benchmark for the investment.
As of June 30, 2015, The Florida Bars debt investments had the following maturities:

June 30,
U.S. Treasuries
Federal Agencies
Municipal Bonds
Corporate Bonds & Other Fixed
Income
Total investments

Fair Value
$ 1,036,636
2,327,071
731,414

Investment Maturities (In Years)

Less than 1
Year
1 - 5 Years 6 - 10 Years Over 10 Years
414,921 $
$
- $ 621,715 $
635,925
301,506
1,389,640
25,000
356,158
287,916
62,340

4,803,960

141,053

2,056,777

1,376,223

$ 8,899,081

$ 166,053

$ 3,670,575

$ 2,380,566

1,229,907
$

2,681,887

The Florida Bar is not directly subject to interest rate risk for its investment in mutual funds that
purchase debt instruments, as The Florida Bar is able to sell their interest in these mutual funds
at will (subject to potential redemption fees). At June 30, 2015, the weighted average life
reported by the mutual fund managers for the mutual funds invested in debt instruments was
2.51 to 2.8 years.
Credit Quality Risk
The Policy requires investments in fixed income debt securities to meet an average quality
rating of A or higher for the long-term portfolio and AA or higher for the short-term portfolio by
either Standard & Poors, Moodys or Fitch Investors Service at the time of purchase.
Investments in corporate holdings must be rated investment grade or better by either Standard
& Poors, Moodys or Fitch Investors Service at the time of purchase. In the event a bonds
credit rating is downgraded to a level below investment grade by two of the three ratings
agencies, the Investment Manager must notify the Investment Committee and provide the
Committee with the Managers outlook on the investment. The Investment Committee must
approve continuing to hold the downgraded investment. The Manager must regularly update the
committee on the downgraded investments status.

- 18 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 4 INVESTMENTS (CONTINUED)

Credit Quality Risk (continued)
The Florida Bars debt investments by rating at June 30, 2015 are presented below:

Quality Rating
Agencies

U.S.
Treasuries Federal Agencies
$

Aaa

1,036,636

2,327,071

Corporate
Bonds & Other Mutual Funds Fixed Income Debt Securities

Municipal
Bonds
$

573,800

333,221

1,779,654

Total
$

2,900,871
3,149,511

Aa1

221,024

127,548

348,572

Aa2

141,770

3,344

145,114

Aa3

30,430

143,626

174,056

A1

301,525

301,525

A2

4,969

401,427

406,396

A3

403,203

403,203

Baa1

590,766

590,766

Baa2

428,896

428,896

Baa3

50,171

50,171

Unrated

8,378,474

8,378,474

8,378,474

$ 17,277,555

Total investments

$ 1,036,636

2,327,071

731,414

4,803,960

Because mutual funds are listed and valued as a whole, not individual holdings, information
about specific ratings cannot be obtained however the mutual funds do have exposure to noninvestment grade securities. Investments in mutual funds are with the understanding that the
investment policies stated in the mutual funds prospectus supersedes the guidelines
established by The Florida Bar.
Foreign Currency Risk
Investments in international equity securities are limited to SEC-Registered, U.S. exchange
listed, U.S. dollar-denominated securities in foreign domiciled issuers. Investments in
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
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

- 19 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 4 INVESTMENTS (CONTINUED)

Foreign Currency Risk (continued)
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 Bars
Investment Committee. Additionally, the investment policies approve the use of mutual funds,
which may include foreign securities, with the understanding that the investment policies stated
in the mutual funds prospectus supersede the guidelines set forth in The Florida Bars
investment policy.
Concentration of Credit Risk
The Policy requires investments to be diversified such that there is not an undue concentration
in a single industry sector except for its Concentrated Portfolios. Investments in equity securities
are subject to a maximum 5% commitment at cost and 10% weighting at market of the
accounts total market value for any individual security or single issuer.
Investments in fixed income securities are subject to no more than 5% of the accounts market
value invested in a single issue (at cost) or in direct obligations of a single issuer (at market)
with the exception of the U.S. Government and its agencies so long as any such government or
agency 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.
Investments in cash and cash equivalents are limited to no more than 10% of the accounts
market value in a single issue (at cost), with the exception of issues backed by the U.S.
Government and its agencies and diversified money market funds.
Derivative Instruments
As of June 30, 2015, the Florida Bars investment policy states that investments in options,
derivatives and financial futures are prohibited in separately managed accounts other than its
Alternative Investment assets. Additionally, the investment policy approves the use of mutual
funds, which may include derivative instruments, with the understanding that the investment
policies stated in the mutual funds prospectus supersede the guidelines set forth in The Florida
Bars investment policy.
NOTE 5 ACCOUNTS RECEIVABLE, NET
The following is a summary of accounts receivable, net:
June 30,
Accounts receivable
Allowance for doubtful accounts
Accounts receivable, net

$
$

- 20 -

2015
968,486 $
(15,000)
953,486 $

2014
746,293
(15,000)
731,293

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements
NOTE 6 CAPITAL ASSETS, NET
July 1, 2014

Additions

Deletions

Transfers

June 30, 2015

Capital assets not being depreciated or amortized:

Land
Software development in progress
Construction in progress
Total capital assets not depreciated or amortized

$ 1,306,690
393,822
-

898,244
-

- $
(368,763)
-

1,306,690
923,303
-

(368,763)

2,229,993

1,700,512

898,244

11,346,008
120,318
4,874,528
5,108,939

87,714
281,383
79,679

(207,033)
-

308,611

11,433,722
120,318
4,948,878
5,497,229

21,449,793

448,776

(207,033)

308,611

22,000,147

(6,916,811)
(120,318)
(3,927,795)
(1,821,451)

(371,944)
(296,112)
(741,620)

205,509
-

(7,288,755)
(120,318)
(4,018,398)
(2,563,071)

(12,786,375)

(1,409,676)

205,509

(13,990,542)

Capital assets being depreciated or amortized:

Buildings and improvements
Landscaping and parking
Equipment and furnishings
Software
Total capital assets being depreciated or amortized
Less accumulated depreciation or amortization for:
Buildings and improvements
Landscaping and parking
Equipment and furnishings
Software
Total accumulated depreciation or
amortization
Total capital assets being depreciated or
amortized, net
Total capital assets, net

8,663,418
$ 10,363,930

(960,900)
$

July 1, 2013

(62,656) $

Additions

(1,524)

308,611

(1,524) $

(60,152) $

Deletions

Transfers

8,009,605
10,239,598

June 30, 2014

Capital assets not being depreciated or amortized:

Land
Software development in progress
Construction in progress
Total capital assets not depreciated or amortized

$ 1,306,690
280,310
11,220
1,598,220

798,454
798,454

- $
(11,220)
(11,220)

- $
(684,942)
(684,942)

1,306,690
393,822
1,700,512

Capital assets being depreciated or amortized:

Buildings and improvements
Landscaping and parking
Equipment and furnishings
Software
Total capital assets being depreciated or amortized

11,349,427
120,318
4,831,457
4,431,345
20,732,547

53,694
127,685
7,463
188,842

(57,113)
(99,425)

(6,576,525)
(120,318)
(3,662,297)
(1,237,434)

(384,787)
(344,641)
(594,852)

44,501
85,217
4,761

(11,596,574)

(1,324,280)

134,479

(156,538)

11,346,008
120,318
4,874,528
5,108,939
21,449,793

14,811
670,131
684,942

Less accumulated depreciation or amortization for:

Buildings and improvements
Landscaping and parking
Equipment and furnishings
Software
Total accumulated depreciation or
amortization
Total capital assets being depreciated or
amortized, net
Total capital assets, net

9,135,973
$ 10,734,193

(1,135,438)
$

(336,984) $

(22,059)
(33,279) $

(6,074)
6,074

(6,916,811)
(120,318)
(3,927,795)
(1,821,451)

(12,786,375)

684,942
-

8,663,418
$

10,363,930

Depreciation and amortization expense for the years ended June 30, 2015 and 2014 was
$1,409,854 and $1,324,280, respectively.
- 21 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 7 NOTE RECEIVABLE

On November 6, 2014, The Florida Bar executed an agreement to provide a $6.0 million loan to
The Florida Bar Foundation (the Foundation) for the purpose of accomplishing The Foundations
mission of either improving or reengineering access to justice for all Florida citizens. The first
installment of $3.0 million was made on December 3, 2014. The second installment may be
made no earlier than December 3, 2015. The loan bears interest at a rate equal to the Annual
Mid-Term Applicable Federal Rate (1.6% at June 30, 2015), as adjusted monthly, but no less
than .75% per annum. Interest will be paid annually on the anniversary date of the loan and
principal repayment will be made quarterly beginning January 2, 2018, with all principal and
interest required to be repaid by December 3, 2021.

NOTE 8 NON-CURRENT LIABILITIES

Compensated Absences Payable & Changes in Non-Current Liabilities
The non-current liabilities are the compensated absences payable.
Compensated absences payable consisted of the following:
June 30,
Accrued vacation
Accrued sick leave
Total compensated absences

$
$

2015
1,494,388
1,071,074
2,565,462

$
$

2014
1,417,274
1,021,882
2,439,156

Changes in non-current liabilities are summarized as follows:

Accrued vacation
Accrued sick leave
Total long-term liabilities

Balance
July 1, 2014 Additions
$ 1,417,274 $ 1,174,704
1,021,882
258,280
$ 2,439,156 $ 1,432,984

Balance
Reductions June 30, 2015
$ (1,097,590) $ 1,494,388
(209,088)
1,071,074
$ (1,306,678) $ 2,565,462

Accrued vacation
Accrued sick leave
Total long-term liabilities

Balance
July 1, 2013 Additions
$ 1,476,155 $ 1,111,685
1,043,260
220,933
$ 2,519,415 $ 1,332,618

Balance
Reductions
June 30, 2014
$ (1,170,566) $
1,417,274
(242,311)
1,021,882
$ (1,412,877) $
2,439,156

- 22 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 9 REVENUE AND EXPENSE CLASSIFICATION

The significant revenue and expense accounts presented in the consolidated financial
statements are described as follows:
Annual Fees
Annual fees include fees for active and inactive memberships in The Florida Bar.
Other Fees from Members
Includes revenues from members other than annual fees such as advertising approval fees,
certification fees and section dues.
Sales of Products and Services
Includes revenues from sources such as Continuing Legal Education (CLE) registrations, and
meeting revenues.
Other Revenue
Includes cost recoveries from discipline cases, rents received in The Bar Center Building Fund
and other sources of revenue.
Regulation of the Practice of Law
Includes expenses incurred for Lawyer Regulation, Lawyer Advertising, Ethics, Continuing Legal
Education Rules (CLER), Membership Records and Certification.
Cost of Products and Services Provided to Members
Includes expenses such as the cost of CLE courses and publications, the Practice Resource
Institute, voluntary member assistance programs, meetings, committee activity and section
activity.
Communication with Members and the Public
Includes the revenue and expenses of the Public Information Department and The Florida Bar
Journal and News.
Administration
Includes board and officer expenses, the cost of the Executive Directors office, General
Counsel, Research, Planning and Evaluation, as well as liability and property insurance.

- 23 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 10 RETIREMENT PLANS

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
Plan may be amended at any time by The Florida Bar. Employer contributions are discretionary
and are currently made for all eligible employees employed on December 31 based on a
formula which was 15% of covered compensation for the years ended June 30, 2015 and 2014,
respectively, and 4.3% on covered compensation exceeding 80% of the Social Security wage
base. 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:
Less than 3 years
3 4 years
4 5 years
5 6 years
Greater than 6 years

0%
40%
60%
80%
100%

Forfeited contributions are held in a separate account and are used to reduce future employer
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,
2015 and 2014 for the Plan years ended December 31, 2014 and 2013 and was $2,354,344
and $ 2,300,355, respectively. The Florida Bar also has a deferred compensation plan. The
plan is for the benefit of all employees who elect to participate.
NOTE 11 RETIREE POSTEMPLOYMENT HEALTH BENEFITS
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
benefits to eligible employees at early retirement, disability or full retirement. The Florida Bar
has the authority to establish and amend benefit provisions of TFBRHP. TFBRHP issues a
stand-alone financial report that includes the financial statements and required disclosures.
This report may be obtained by writing to The Florida Bar, 651 East Jefferson Street,
Tallahassee, Florida 32399-2300.
Funding Policy. TFBRHP is funded through contributions made by The Florida Bar. The
contribution requirements are established and may be amended by The Florida Bar. Currently,
there are no required contributions by active or retired employees. The required contribution
from The Florida Bar is based on an actuarially determined percentage of total active payroll.
For fiscal years ended June 30, 2015 and 2014, The Florida Bar contributed $78,550 and
$87,269, respectively, to the plan for the annual required contributions.
Annual OPEB Cost and Net OPEB Obligation. The Florida Bars 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
- 24 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 11 RETIREE POSTEMPLOYMENT HEALTH BENEFITS (CONTINUED)

Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is
projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years. Based on the January 1, 2014,
actuarial valuation, the ARC is .53% of active payroll payable for the calendar years 2014
through 2015. The following table shows the components of The Florida Bars annual OPEB
cost for the year, the amount actually contributed to the plan, and changes in The Florida Bars
net OPEB obligation to TFBRHP:
Annual required contribution

$ 78,550

Interest on net OPEB obligation

Adjustments to annual required contribution
Annual OPEB cost (expense)

$ 78,550

Net OPEB obligation - July 1, 2014

Annual OPEB cost (expense) for 2015

Contributions made during FY 2015
Net OPEB obligation - June 30, 2015

(78,550)
78,550
$
-

The Florida Bars annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan, and the net OPEB obligation for 2015 and the preceding three years were as follows:
Fiscal Year
Ended
June 30, 2013
June 30, 2014
June 30, 2015

Annual
OPEB Cost
$ 90,190
87,269
78,550

Percentage of Annual
OPEB Cost Contributed
100%
100%
100%

Net OPEB
Obligation
-

Funded Status and Funding Progress. As of January 1, 2014, the most recent actuarial
valuation date, the plan was 100% funded. The actuarial accrued liability for benefits was
calculated to be $2,448,563 and the actuarial value of the assets was $2,455,763, resulting in a
funding overage of ($7,200). The covered payroll (annual payroll of active employees covered
by the plan) was $15,749,749, and the ratio of the unfunded actuarial accrued liability (UAAL) to
the covered payroll was (0.05) %.
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
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.
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
- 25 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 11 RETIREE POSTEMPLOYMENT HEALTH BENEFITS (CONTINUED)

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
short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent
with the long-term perspective of the calculations.
The projected unit credit actuarial cost method was used for the January 1, 2014 actuarial
valuation. The actuarial assumptions included a 7.0% investment rate of return, which is the rate
of the expected long-term investment returns on plan assets and an annual healthcare cost
trend rate of 7.5% initially, reduced by decrements to an ultimate rate of 5.0% in the year 2018
and beyond. Both rates included a 3.0% inflation assumption. TFBRHP holds plan assets in
trust solely to provide benefits to retirees and their beneficiaries. The UAAL is being amortized
as a level percentage of projected payroll on a closed basis. The remaining amortization period
at January 1, 2014 was 28 years.
The schedule of funding progress follows:

Actuarial
Valuation
Date
1/1/10
1/1/12
1/1/14

Actuarial
Value
of Assets
(a)
$ 1,293,906
1,712,944
2,455,763

Actuarial
Accrued
Liability
(AAL)Projected
Unit Credit
(b)
$
1,584,797
1,886,227
2,448,563

Unfunded
AAL
(UAAL)
(b - a)
$
290,891
173,283
(7,200)

Funded
Covered
Ratio
Payroll
(a/b)
(c)
81.64% $ 14,557,008
90.81%
14,402,420
100.29%
15,749,749

UAAL as a
Percentage
of Covered
Payroll
(b - a) / c)
2.00%
1.20%
-0.05%

NOTE 12 LEASES
The Florida Bar is the lessee of office space under operating leases expiring in various years
through the year 2020, with escalation clauses.
The Florida Bar also leases office space from its wholly-owned subsidiary, The Florida Bar
Building Corporation. The intercompany rental income and rental expense have been eliminated
in consolidation.
Future minimum rental payments to unrelated entities are as follows:
Years ending June 30,
2016
2017
2018
2019
2020
Thereafter
Total minimum future rental payments

Amount
$
810,407
798,855
370,938
178,515
183,870
93,294
$ 2,435,879

- 26 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 12 LEASES (CONTINUED)

Total rental expense for the fiscal years ended June 30, 2015 and 2014 was $787,276 and
$779,485, respectively.
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 2018. Rental income for the fiscal years ended June 30, 2015 and 2014 was
$295,576 for both years.
Future minimum rental receipts are as follows:
Amount
295,576
$
295,576
295,576
73,894
$
960,622

Years ending June 30,

2016
2017
2018
2019
Total minimum future rental receipts

NOTE 13 CONTINGENCIES
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
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.
NOTE 14 COMMITMENTS
The Florida Bar has contracted with various hotels or convention centers to reserve facilities,
rooms, and food and beverage services for various meetings and seminars to be held through
fiscal year 2020. If The Florida Bar should choose to cancel the contracts, liquidating damages
would be due to the hotels or convention centers. Generally, liquidating damages are graduated
based on the time between cancellation and the scheduled arrival date of the meeting and are
calculated based on a percentage of anticipated revenues by the particular hotel or convention
center.

- 27 -

The Florida Bar and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 14 COMMITMENTS (CONTINUED)

The following is a schedule of estimated liquidating damages that The Florida Bar would incur
should they cancel all the contracts as of June 30, 2015:

Event
Annual Meeting
Board of Governors Meetings
Winter Meeting
Fall Meeting
Section and Division Meetings
Continuing Legal Education Seminars and Other Meetings
Total commitment

Estimated
liquidating
damages
$
695,508
228,920
76,700
35,112
989,609
166,591
$
2,192,440

NOTE 15 DESIGNATED NET POSITION

The Florida Bar has designated certain components of net position to be used for specific
program purposes. As of June 30, 2015 and 2014, the designated components of unrestricted
net position were $20,650,772 and $20,188,679 respectively.
NOTE 16 RISK MANAGEMENT PROGRAMS
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.
Workers compensation, property, and general liability coverage are provided through
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.

NOTE 17 PERMANENT ENDOWMENT

On May 28, 2015, The Florida Bar entered into an agreement with Florida Lawyers Mutual
Insurance Company (FLMIC) to establish an endowment fund for the purpose of defraying the
costs of any and all programs and activities that promote the professionalism, civility, ethical
conduct, and legal practice competency of Florida lawyers. The initial gift of $100,000 and any
additional gifts must be held for growth for ten years. After the first ten years, The Florida Bar
with the approval of FLMIC may direct distributions of the earnings for the purpose for which the
endowment was established. However, at no time, may the distributions be allowed to reduce
the principal to an amount lower than the initial gift and any additional gifts received. Should the
purpose for which the endowment was created cease to exist or the endowment become too
impractical to administer, The Florida Bar and FLMIC have the power to redirect the funds for a
purpose as similar as possible to the original intent.

- 28 -

Other Report

INDEPENDENT AUDITORS 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 Governors
The Florida Bar
Tallahassee, Florida
We have audited, in accordance with the 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, the financial
statements of the business-type activities of The Florida Bar and Subsidiaries, as of and for the
year ended June 30, 2015 and 2014, and the related notes to the financial statements, which
collectively comprise The Florida Bar and Subsidiaries basic financial statements, and have
issued our report thereon dated December 4, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered The Florida
Bar and Subsidiaries internal control over financial reporting (internal control) to determine the
audit procedures that are appropriate in the circumstances 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. Accordingly, we do not
express an opinion on the effectiveness of The Florida Bar and Subsidiaries internal control.
A deficiency in internal control 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 and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entitys financial statements will not be
prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency,
or a combination of deficiencies, in internal control that is less severe than a material
weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control
that might be material weaknesses or, significant deficiencies. Given these limitations, during
our audit we did not identify any deficiencies in internal control that we consider to be material
weaknesses. However, material weaknesses may exist that have not been identified.

- 29 -

Board of Governors
The Florida Bar

Compliance and Other Matters

As part of obtaining reasonable assurance about whether The Florida Bar and Subsidiaries
financial statements are free from material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance
with which could have a direct and material effect on the determination of financial statement
amounts. 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 or other matters that are required to be reported
under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the entitys internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entitys
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.

CARR, RIGGS & INGRAM, LLC

Tallahassee, FL
December 4, 2015

- 30 -