2009-2008 June 30 Florida Bar Financial Statement

TheFloridaBarandSubsidiaries
FinancialStatementsand
SupplementalInformation
June30,2009and2008
The Florida Bar and Subsidiaries
Table of Contents
June 30, 2009 and 2008
Independent Auditors' Report
Man.agement's Discussion and Analysis
Financial Statements
Consolidated Statements of Net Assets
Consolidated Statements of Revenues, Expenses
t
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Supplementary Information
1 - 2
3-7
8
and Changes in Net Assets 9
10 - 11
12 - 27
Consolidating Statement of Net Assets as of June 30, 2009. 28 - 29
Consolidating Statement of Revenues, Expense and Changes
in Net Assets for the year ended June 30, 2009. 30
Consolidating Statement of Cash Flows for the year ended
June 30, 2009. 31 - 32
General Fund Schedule of Budgeted and Actual Revenues and Expenses
for the year ended June 3D, 2009. 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 3D. 2009. 42
Clients
J
Security Fund Schedule of Budgeted and Actual Revenues and
Expenses for the year ended June 30, 2009. 43
Certification Fund Schedule of Budgeted and Actual Revenues and Expenses
for the year ended June 30, 2009. 44
Sections Fund Schedule of Budget and Actual Revenues and Expenses for the
year ended June 3D, 2009. 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
Carr, Riggs Be Ingram, LlC
/;'. ICRIC A R R
1713 Mahan Drive
Jlt.. RIGGS &
= ~ INGRAM
Tallahassee, Florida 32308
(85m 878-8777
(850) 8782344 (fax)
wWV'oJ.cricpa.com
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, 2009 and 2008, 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 consoridated financial statements referred to above present fair'y, in all
material respects, the financial position of the business-type activities of The Frorida Bar
and Subsidiaries as of June 30, 2009 and 2 8 ~ 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
September 24, 2009, 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
J
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 shou'd be
considered in assessing the results of our audit.
Board of Governors
The Florida Bar
Page 2
The management's discussion and analysis on pages 3 through 7 is not a required part of the
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 principarJy of inquiries of management regarding the methods of measurement
and presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
Our audits were performed for the purpose of forming an opinion on the consolidated financial
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 anaJysis 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
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.
CaM., ~ ~ I L- L c...
Tallahassee
J
Florida
September 24) 2009
Management's Discussion and Analysis
The Florida Bar is the statewide professional and regulatory organization for lawyers with more
than 86,900 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 ~
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.
Overview of the Financial Statements
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 regulator of the
practice of law and the professionar 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.
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,
Expenses, and Changes in Net Assets include all of The Florida Bar's revenues and expenses
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
At June 30
1
2009 and 2008, The Florida Bar had $55,122,962 and $61,717,266, respectively in
total assets. Of this amount $45,425,002 and $53,967,114 was held in cash and investments and
$7,078,838 and $6,850,102 was invested in capital assets at June 30, 2009 and 2008,
respectively. The primary liability at June 30, 2009 and 2008 was deferred revenue of $7,670,851
and $10,541,326, respectively, resulting from advance collection of member fees and prepayments
for Continuing Legal Education registrations. Our net assets were $39,100,551 and $44,282,555
at June 30,2009 and 2008, respectively.
These amounts are in line with the prior year's balances given the current changes in net assets.
The original operating budgets for the General Fund (excluding the wholly-owned subsidiary and
controlled entities) for the years ended June 30, 2009 and 2008 approved by the Florida Supreme
Court, planned on an increase in net assets of $94,033 and $598,305, respectively. After Board of
Governor amendments, the planned increase (decrease) became $1
1
287,840 and $1,831,731,
respectively. General Fund actual operations resulted in a change in net assets of ($3,875,929)
and $1,302,671, respectively. The decrease in net assets resulted primarily from the effects of the
poor investment climate during the past fiscal year and increases In operating costs of the various
departments of The Florida Bar. Included in the supplemental information is an actual to budget
comparison for each department.
See the Independent Auditors' Report.
-3-
For the year ended June 30, 2009 and 2008, The Florida Bar's bUdget funded most departments at
a continuation level.
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS
June 30,
Assets
Current assets
Restricted assets
Capital assets, net
Total assets
2009
$ 46,351,133
1,692,991
7,078,838
$ 55,122,962
2008
$ 54,867,164
6.850,102
$ 61,717,266
$
$
Change
(8,516,031)
1,692,991
228,736
(6,594
t
304)
Liabilities
Current liabilities
Other liabilities
Tatal liabilities
$ 11,922,237
4,100,174
16,022,411
$ 13,594,124
3,840,587
17,434,711
$ (1,671,887)
259,587
(1,412,300)
Net assets
Invested in capital assets, net of related debt
Restricted for scholarships
Unrestricted
Total net assets
5,627,206
32,405
33,440,940
39,100,551
5,184,217
34,412
39,063,926
44,282,555
442,989
(2,007)
(5,622,986)
(5,182,004)
Total liabilities and net assets $ 55,122,962 $ 61.717,266 $ (6,594,304)
See the Independent Auditors' Report.
-4-
CONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS
June 3D,
Assets
Current assets
Capitaf assets, net
2008
$ 54,867,164
6,850,102
2007
$ 52,216,871
6,339,329
$
Change
2,650,293
510,773
Tctal assets $ 61,717,266 $ 58,556,200 $ 3,161,066
Liabilities
Current liabilities $ 13,594,124 $ 12,157,092 $ 1,437,032
Other liabilities 3,840,587 4,071,137 (230,550)
Total liabilities 17,434,711 16,228,229 1,206,482
Net assets
Invested in capital assets, net of related debt 5,184,217 4,474,503 709,714
Restricted for scholarships 34.412 32,551 1,861
Unrestricted 39,063,926 37,820,917 1,243,009
Tctal net assets 44,282,555 42,327,971 1,954,584
Total liabilities and net assets $ 61,717,266 $ 58,556,200 $ 3,161,066
For more detailed informatjon, see the accompa.nying Consolidated Statements of Net Assets.
CONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
June 3D, 2009 2008 Change
Operating revenues $ 41,102,989 $ 40,560,544 $ 542,445
Operating expenses (41,706,627) (39,782,261) (1,924,366)
Net operating revenues (603,638) 778,283 (1,381,921 )
Non-operating revenues 1,320,375 (1,320,375)
Non-operating expenses (4,578,36&) (144,074) (4,434,292)
Net non-operating revenues (4,578,366) 1,176,301 (5,754,667)
(Decrease) Increase in net assets (5,182,004) 1,954,584 (7) 136,588)
Net assets
t
beginning 44,282,555 42,327,971 1,954,584
Net assets, ending $ 39,100,551 $ 44,282,555 $ (5,182,004)
See the Independent Auditors
t
Report.
-5-
Management'sDiscussionandAnalysis
CONDENSEDCONSOLIDATEDSTATEMENTSOFREVENUES,EXPENSES
ANDCHANGESINNETASSETS
June 30
J
2008 2007 Change
Operating revenues $ 40,560,544 $ 39,732,682 $ 827,862
Operatingexpenses (39,782,261) (37,915,576) (1,866,685)
Netoperating revenues 778,283 1,817,106 (1,038,823)
Non-operating revenues 1,320,375 4,361,648 (3,041,273)
Non-operatingexpenses (144,074) (162,619) 18,545
Netnon-operatingrevenues 1,176,301 4,199,029 (3,022,728)
Increasein netassets 1,954,584 6,016,135 (4,061,551)
Netassets, beginning 42,327,971 36,311,836 6,016,135
Netassets, ending $ 44,282,555 $ 42,327,971 $ 1,954,584
For more detailed information, see the accompanying Consolidated Statements ofRevenues,
Expenses, andChangesin NetAssets.
CAPITALASSETS
TheFloridaBarhadinvestedthefollowing in CapitalAssets:
June 30, 2009 2008 Change
Land $ 1,306,690 $ 1,306,690 $
Building andimprovements 9,630,046 8,983,412 646,634
Landscapingandparking 120,318 120,318
Equipmentandfurnishings 4,792,884 4,629,153 163,731
Constructioninprogress 6,243 19,526 (13,283)
Total, priortodepreciation 15,856,181 15,059,099 797
t
082
Accumulateddepreciation (8,777,343) (8,208,997) (568,346)
Netcapital assets $ 7,078,838 $ 6,850,102 $ 228,736
SeetheIndependentAuditors'Report.
- 6..
Management'sDiscussionandAnalysis
CAPITALASSETS
June 30, 2008 2007 Change
Land $ 1,306,690
Buildingandimprovements 8,983,412
Landscapingandparking 120,318
Equipmentandfurnishings 4,629,153
Constructionin progress 19,526
Total, priortodepreciation 15,059,099
Accumulateddepreciation (8,208,997)
$ 1,103,060 $ 203,630
8,292,805 690,607
120,318
4,632,356 3 ~ 2 0 3
136,170 (116,644)
14,284,709 774,390
(7,945,380) (263,617)
Netcapitalassets $ 6,850,102 $ 6,339,329 $ 510,773
Presently, TheFlorida Barhasnoplanstosignificantlyalteritsinvestmentin capital assets.
DEBT
At June 30
r
2009 and 2008, The Florida Bar had $1,451,635 and $1,665,886, respectively
outstanding in a mortgage loan. The mortgage loan is scheduled to balloon on October 15,
2009. Management plans to pay the loan when it balloons. Cash has been accumulated to
covertherequired balloonpayment.
FutureFinancialPlan
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
business partners and affiliates. There is no plan to materially change these revenue streams
forthe nexttwoyears. Accordingly, there arenopresentplanstomateriallyincreasethescope
ornatureofthe services provided tothecitizens ofFlorida and the lawyers authorizedtoserve
thema
Seethe IndependentAuditors' Report.
- 7 -
Financial Statements
Consolidated Statements of Net Assets
June 30, 2009 2008
Assets
Current assets
Cash and cash equivalents $ 13,910,031 $ 14,058,533
Short-term investments 31,514,971 39,908,581
Accounts receivable, net 567,166 261,303
Prepaid expenses and other assets 358,965 638.747
Total current assets 46,351,133 54,867,164
Capital assets. net
Land 1,306,690 1,306,690
Buildings and improvements 9,630,046 8,983,412
Landscaping and parking 120,318 120,318
Equipment and furnishings 4,792,884 4
t
629,153
Construction in progress 6,243 19,526
Accumulated depreciation (8,777,343) (8,208,997)
Total capital assets, net 7,078,838 6,850,102
Restricted assets
CSF recovery receivable 1,692,991
Total assets $ 55,122,962 $ 61,717,266
Liabilities and Net Assets
Current liabilities
Current portion of long-term debt $ 1,451,635 $ 214,251
~ o u n t s payable 1,668,864 1,405,120
Claims payable 79,646 364,820
Accrued expenses 1,002,335 1,020,011
Deferred revenues 7,670,851 10,541,326
Security deposits 48,906 48,596
Total current liabilities 11,922,237 13.594,124
Non-current tiabilities
Long-term debt, less current portion 1,451,635
Compensated absences payable 2,407,183 2,388.952
Deferred revenue for CSF recovery 1,692,991
Total non-current liabilities 4,100,174 3.840,587
Total liabilities 16,022,411 17,434,711
Net assets
Invested in capital assets, net of related debt 5,627,206 5,184,217
Restricted for scholarships 32,405 34,412
Unrestricted 33,440,940 39,063,926
Total net assets 39,100,551 44.282,555
Total liabilities and net assets $ 55,122,962 $ 61,717,266
See accompanying notes to the consolidated financial statements.
- 8 -
Consolidated Statements of Revenues, Expenses and Changes in Net Assets
Years ended June 30, 2009 2008
Operating revenues
Annual fees $ 22,035,716 $ 21,577,689
Other fees 6,106,088 6,056,320
Sales of products and services 9,551,215 9,263
r
422
Advertising 2,084,265 2,348,386
Young lawyers 554,687 561,070
Grants and other 771,018 753,657
Total operating revenues 41,102,989 40,560,544
Operating expenses
Regulation of the practice of law 15,791,436 15,732,831
Cost of products and services provided to members 12,647,506 11,658,187
Unauthorized practice of law 1,383,724 1,349,500
Public service programs 2,896,958 2,185,966
Communications with members and the public 4,095,417 4,002,905
Administration 2,483,553 2,508,482
Legislation 657,496 400,437
Young lawyers 564,163 626,082
Depreciation and amortization 771,679 764,039
Other programs and costs 414,695 553,832
Total operating expenses 41,706,627 39,782,261
Operating (loss) income (603,638) 778,283
Non-operating revenues (expenses)
Investment earnings (4,442,728) 1,320,375
Interest expense (121,703) (137,262)
Loss on disposal of capital assets (13,935) (6,812)
Total non-operating revenues (expenses) (4,578,366) 1t 176,301
Change in net assets (5,182,004) 1,954,584
Total net assets, beginning of year 44,282,555 42,327,971
Total net assets, end of year $ 39,100,551 $ 44,282,555
- 9-
Consolidated Statements of Cash Flows
Cash flows from operating activities:
Receipts from members, customers and other sources $ 38,769,936 $ 42,586. 177
Payments to employees, suppliers and other vendors (41,519,016) (39,543,051)
Net cash (used in) provided by operating activities (2,749,080) 3,043,126
Cash flows from non-capital and related financing activities:
Reduction of debt (214,251) (198,939)
Interest paid (121,703) (137.262)
Net cash (used in) non-capital and related financing activities (335,954) (336.201)
Cash flows from capital and related financing activities:
Acquisition of capital assets (1,014,350) (1,281,624)
Net cash (used in) capital and related financing activities (1,014,350) (1,281,624)
Cash flows from investing activities:
Net change in repurchase agreement (625,165)
Redemption of investments 17,546,867 19,997,054
Purchase of investments, net of decrease in fair value (9, 153,257) (18,726,900)
Investment income (4,442,728) 1,320,375
Net cash provided by investing activities 3,950,882 1,965,364
(Decrease) increase in cash and cash equivalents: (148,502) 3,390,665
Cash and cash equivalents, beginning of year 14,058,533 10,667,868
Cash and cash equivalents, end of year $ 13,910,031 $ 14,058,533
- 10-
ConsolidatedStatementsofCash Flows(Continued)
Reconciliationofoperating(loss)incometonetcash
providedbyoperatingactivities:
Operating (loss)income $ (603,638) $ 778,283
Adjustmentstoreconcileoperating (loss) incometonetcash
providedby operating activities:
Depreciationand amortization 771,679 764,039
(Increase)decreasein:
Accountsreceivable, net (1,998,854) 316,156
Prepaidexpensesandotherassets 279,782 (220,773)
Increase(decrease) in:
Accountspayable 263,744
Claimspayable (285,174)
Accruedexpenses (17,676)
Deferredrevenues (1,177,484)
Securitydeposits 310
Com ansatedabsensespa able 18,231
Netcash (used in) providedby operatingactivities (2,749,080) $
Non-cashinvesting, capital, andfinancing acitivities
Changeinthefairvalueofinvestments $ (2,638,440) $ (1,969,343)
Losson disposalofassets $ 13,935 $ 6,812
Supplementalinformation
Cashpaidforinterest $ 121,703 $ 137,262
Seeaccompanying notestotheconsolidated financialstatements.
- 11 -
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 ;s 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 (UStatement No. 34
17
) of the Governmental Accounting Standards
Board "Basic Financial Statements - and Management's Discussion and Analysis - for State and
Local Governments, n 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 n1ay be financially accountable and if found to be
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
organization to provide specific financial benefit to or impose specific financial burden on The
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 shou1d be included in The Florida
Bar's financial statements.
Basis of Presentation
The FJorida 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 fund's ongoing operations.
Operating expenses for The Florida Bar include the costs of personnel
r
contractual services,
supplies, utilities, repairs and maintenance, and depreciation on capital assets. An revenues and
expenses not meeting this definition are reported as non-operating revenues and expenses.
- 12 -
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. 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
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.
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 value, which are based on quoted market prices. The
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.
Capital Assets
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
t
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 ;s
reflected in the Consolidated Statements of Revenues, Expenses and Changes in Net Assets, in
the period of disposal.
Claims Payable
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
Fund is financed by $20 of the annual fees from each Florida Bar member who is in good-standing
(including inactive members). Claims payable represent amounts payable from the Fund.
DeferredRevenues
Deferred revenues consist primarily of membership fees collected in advance, prepaid advertising
and prepaid legal education courses.
-13 -
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
Assets. AccordinglYt 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 whoHy-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 AJI significant intercompany transactions and accounts have been eliminated in
consolidation.
Income Taxes
The Florida Bar is an ad,ministrative 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 bus;ness 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 courd 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 Assets
Net assets are categorized as invested in capital assets, restricted for scholarships, and
undesjgnated. Invested in capital assets is intended to reflect the portion of net assets that are
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.
Subsequent Events
Subsequent events have been evaluated through the date the financial statements were issued.
- 14-
Derivative Financial Instruments
The Florida Bar follows the provisions of Governmental Accounting Standards Board (GASB)
Technical Bulletin No. 2003-1, Disctosure 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.
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 that participates in the Federal Deposit Insurance Corporation (FDICrs
Transaction Account Guarantee Program. Under that program, all operating cash is fully
guaranteed the parent and subsidiary accounts. Operating cash balances were $4,818,643 and
$2,460) 726 at June 30, 2009 and 2008, respectively. Additional cash and money market funds are
held at a financial institution insured by the Securities Investor Protection Corporation up to
$100,000. Additional cash and money market funds were $9,091,388 and $11,597,807 at June 30,
2009 and 2008, respectively.
NOTE 4 - INVESTMENTS
Investment Objectives and Policies
Investments wilt be made for the sale interest and exclusive purpose of providing investment
returns for The Florida Bar. The Florida Bar's investment objectives and policies are achieved
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 Governors and the Investment Committee.
The purpose of the short-term portfolio is to provide for The Florida Bar's short-term working
capitaJ 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
consistent with the preservation of capital.
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
portfolio possesses an intermediate to long-term horizon (five to seven years) and within this
- 15 -
horizon
t
the primary objectives of the long-term portfolio are to provide long-term growth of
capita) and income.
The asset allocatjon guidelines with regard to acceptable asset classes, the overall target asset
mix. and the representative indices of each asset class are as follows:
Short-Term
Target Representative
Asset Classes Minimum Mix Maximum Index
Short-Term Fixed income 35.0/0 50.0% 65.0
0
/0 Barcfays Intermediate Government Credit Index
Cash and Equivalents 35.00/0 50.0% 65.01'0 Citigraup gO-Day U.S. Treasury Bills
Long-Term
Target Representative
Asset Classes Minimum Mix Maximum Index
Large Cap Equity 14.0
o
k 20.0% 26.0% Standard & Poor's 500 Index
Mid Cap Equity 3.0% 6.00/0 9.0% Russell Mid Cap Index
Small Cap Equity 3.00/0 6.0% 9.0% Russett 2000 Small Cap Index
Intemational 9.8% 14.0% 18.20/0 MSCI EAFE Index
Emerging Market Equity 0.0% 2.0,10 5.0% MSCI Emerging Markets Free Index
Real Assets 0.0% 2.0
o
k 5.0% Dow Jones A1G Commodity Index
RErTs 0.0
0
10 3.0% 6.0
%
NARE1T Equity Index
TIPS 0.0% 3.0,'0 6.0/0 Barclay's Treasury US TIPS Index
Fixed income 28.00% 40.00
o
k 52.00% Barclay's Intermediate Government Credit Index
Cash and Equivalents 2.0% 4.0/0 10.0%) Citigroup gO-Day U.S. Treasury Bills
Investments
At June 30, The Florida Barts investment balances were as follows:
2009 2008
June 3D, Fair Value Maturity Rating FairVaJue
Repurchase agreement $ Daily N/A $ 2,799,128
Mutual funds - debt securities (ST) * 5,533,187 2 year average "'* Sa to Aaa 7
t
108,547
US Treasuries 1,839,013 9 year average** Aaa 1,664,959
Federal Agencies 2,292,022 14 year average"''' Aaa 2.791,097
Corporate Bonds & Other Fixed Income 4,846,233 12 year average*'" Baa3 to Aaa 5,427,237
Municipal Bonds 1,428,541 10 year average* 8aa1 toAaa 1,493,209
US Treasury Bonds 1,499,775 1 year average ** Aaa 1.459,725
Mutua' funds .. equity securities 3,042,304 N/A N/A 3.609,073
Stocks 11,033,896 N/A N/A 13.555,606
Total investments $ 39.908,581
* The Florida Bar invests in short...term mutual funds, which consist of debt securities (Le. fixed income securities).
The Florida Bar's short-tern1 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).
** Represents the weighted average maturity of debt securities held by The Florida Bar.
- _ ~ ~
NOTE 4 -INVESTMENTS (CONTINUED)
Credit Risk
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
the short-term portfolio by either Standard &Poor's, Moody's or Fitch Investors Service at the
time of purchase. lnvestments in corporate holdings must be rated investment grade or better
by either Standard & Poor's, Moody's or Fitch Investors Service at the time of purchase. The
Florida Bar's Investment Committee must approve continuing to hold any downgraded
investments.
Concentration of Credit Risk
Investments in equity securities are subject to a maximum 5k commitment at cost and 10%
weighting at market of the accounfs total market value for any individual security or single
issuer. Investment in fixed income securities are subject to no more than 5% of the account's
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 ~ of the fixed income securities may be invested in
mortgage backed or asset backed securities of a single issuer
1
with the exception of those
issued by the U.S. Government, its agencies, or its sponsored agencies.
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 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
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 mutuar funds at wiH (subject to potential redemption fees). Additionally,
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
Custodial credit risk is the risk that in the event of the failure 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
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. Investments held through Morgan Stanley have Securities Investor
Protection Corporation (SIPC) coverage up to $500,000 per customer for cash and securities.
Morgan Stanley also has purchased uExcess 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.
- 17..
NOTE 4 - INVESTMENTS (CONTINUED)
limit for securitjes and a $1.9 million per-client limit for the cash portion of any remaining
shortfall. Investments in PIMCO mutual funds are held by a third party trust company.
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
1
U.S. dollar-denominated. U.S.
government backed securities issued by foreign governments. The Florida Bar invests in
international securjties 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
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 BarIs
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 fundts prospectus supersede the guidelines set forth in The Florida Bar's
investment policy.
Derivative Instruments
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
understanding that the investment policies stated in the mutual fund's prospectus supersede the
guidelines set forth in The Florida Bar's investment policy.
NOTE 5 - ACCOUNTS RECEIVABLE, NET
The following is a summary of accounts receivable, net:
June 30, 2009 2008
Accounts receivable $ 592,066 $ 286,203
Allowance for doubtful accounts (24,900) (24
t
900)
Accounts receivable, net $ 567,166 $ 261.303
- 18 -
NOTE 6 - CAPITAL ASSETS, NET
Capital assets not being depreciated:
Land
Construction in Progress
Total capital assets not depreciated
July 1, 2008
$ 1.306,690
19.526
1,326,216
$
Additions
- $
Deletions June 30, 2009
- $ 1,306,690
(13.283) 6,243
(13,283) 1,312,933
Capital assets being depreciated:
Buildings and improvements
Landscaping and parking
Equipment and furnishings
Total capital assets being depreciated
8,983,412
120,318
4,629,153
13,732,883
725,765
306,957
1.032,722
(79,131)
(143,226)
(222,357)
9,630,046
120,318
4,792,884
14,543,248
Less accumulated depreciation for;
Landscaping and parking
(4,826,326)
(120,318)
(3,262,353)
(282,594)
(489,085) 203,333
(5,108,920)
(120,318)
(3,548,105)
Total accumulated depreciation (8,208,997) (771,679) 203,333 (8,777,343)
Total capital assets being depreciated, net 5,523,886 261.043 (19,024) 5,765,905
Total capital assets. net $ 6,850,102 $ 261.043 $ (32,307) $ 7,078,838
Depreciation expense
$764,039, respectively.
for the years ended June 30, 2009 and 2008 was $771,679 and
NOTE 7 - LONG-TERM LIABILITIES
Compensated Absences Payable
Compensated absences payable consisted of the following:
June 30, 2009 2008
Accrued vacation $ 1,479,665 $ 1,488,365
Accrued sick leave 927,518 900,587
Total compensated absences $ 2,407,183 $ 2.388,952
.. 19 -
Long-Term Debt
The following is a summary of long-term debt:
June 30, 2009 2008
Renewal mortgage note payable to Bank of America in the amount
of $2
t
986,384 due on October 15, 2009. Monthly payments of
principal began on November 15
r
1999 at $9,383 with annual
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
London Interbank Offering Rate (LIBOR) (.31ib at June 30 2009)
t
plus 47 basis points.. However, the interest rate was swapped in a
hedge transaction. See Note 8 below. The mortgage is
collateralized by real estate owned by The Florida Bar Building
Corporation and guaranteed by The Florida Bar.
Current portion
Long-term debt) less current portion
$ 1,451,635 $ 1,665,886
(1,451,635) (214,251)
Changes in Long-Term Liabilities
Changes in long-term liabilities are summarized as follows:
Balance Balance
July 1, 2008 Additions Reductions June 30, 2009
Long-term debt $1,665,886 $ - $ (214,251) $ 1,451,635
Compensated absences 2,388,952 1,524,212 (1,505,981) 2,407,183
Deferred revenue for CSF recovery 1,892,991 (200,000) 1,692,991
Total long-term liabilities $ 4,054
t
838 $ 3,417,203 $ (1,920,232) $ 5,551,809
- 20-
NOTE 8 - DERIVATIVE DISCLOSURE -INTEREST RATE SWAP
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
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
t
1999 to swap
its floating rate for a fixed rate through a 120 month interest rate swap provided by Bank of
America.
Terms. The swap was for the notional amount of $2,986,384 which was equal to the principal
amount of the underlying variabre rate debt. The notional amount declines each year as the
prrncipal amount of the associated debt declines. At June 30, 2009 and 2008
t
the notional
amount was $1,451,632 and $1,665,886, respectively. The swap was entered into at the same
time that the debt was re'financed (October 1999). Under the swap, The Florida Bar pays the
Bank of America a contracted interest rate of 30-day LIBOR plus 7 ~ and receives a payment
from Bank of America based on the coupon rate of the swap which is 6.97ib. The net effect of
the two contractual rates is an effective fixed rate of 7.44%. The swap matures on October 15,
2009.
Fair value. Due to the difference between the two rates, the swap had a negative fair value of
$31,900 and $80,650 as of June 30,2009 and 2008, 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
present and future market conditions, as well as size and liquidity of the position and related
actua,1 or potentiar 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
expected cost savings may not be realized.
Termination risk.. The Florida Bar or the Bank of America may terminate the swap if the o'ther
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 swapts fair value.
Swap payments and associated debt.. Using rates as of June 3D, 2009, 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.
- 21 -
NOTE 8 - DERIVATIVE DISCLOSURE -INTEREST RATE SWAP (CONTINUED)
Year ending Interest rate Net debt
June 30 Principar Interest Total swap, net service
2010 $ 1.451,635 $ 2.795 $ 1,454
1
430 $ 22,181 $ 1,476,611
Total $ 1,451,635 $ 2.795 $ 1,454,430 $ 22,181 $ 1.476,611
NOTE 9 - REVENUE AND EXPENSE CLASSIFICATION
The significant revenue and expense accounts presented in the consolidated financial
statements are described as follows:
Other Fees from Members
Includes revenues from members other than annual dues 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. sales
of publications and meeting revenues.
Grants and Other
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
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, Legal Office Management
Advisory Services (LOMAS), voluntary member assistance programs. meetings, committee
activity and section activity.
Communication with Members and the Public
Includes the expenses of the Public Information Department and The Florida Bar Journal and
News.
- 22-
NOTE 9 - REVENUE AND EXPENSE CLASSIFICATION (CONTINUED)
Administration
Includes board and officer expenses, the cost of the Executive Director's office, General
Counsel, Research, Planning and Evaluation. and liability and property insurance.
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 based on a formula which was 130/0 of covered
compensation for the years ended June 30, 2009 and 2008, respectively, and 4.30/0 on covered
compensation exceeding 80% of the Social Security wage base for the years ended June 30,
2009 and 2008. 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 0
0
/0
3 -4 years 40
%
4 - 5 years 60%
5 - 6 years 80%
greater than 6 years 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,
2009 and 2008 for the Plan years ended December 31, 2008 and 2007 and was $1,914,316
and $1,845,543, respectivefy.
The Florida Bar also has a deferred compensation plan. The plan is for the benefit of all eligible
employees who elect to participate.
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
bene'fits to eligible employees at early retirement, disability or full retirement The Florida Bar
has the authority to establish and amend benefit provisions to TFHRHP. TFHRHP 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.
- 23-
NotestoConsolidatedFinancialStatements
NOTE11 - RETIREEPOSTEMPLOYMENTHEALTH BENEFITS
Funding Policy. The contribution requirements of plan members and The Florida Bar are
established and maybe amended byThe Florida Bar. The required contribution is based on an
actuarialJy detern1ined percentage oftotal active payroll. Forfiscal yearsended June 30, 2009
and 2008, The Florida Bar contributed $52,700 and $64,766, respectively, to the plan. Plan
members.whoare ages62through65ordisabled, arerequiredtocontribute$25permonthfor
retiree-onlycoverageand$100permonthforall othermembercoverage.
Annual OPEB Costand Net OPEB Obligation. The Florida Bar's annual otherpostemployment
benefit (OPES) cost (expense) is calculated based on the annual required contribution of the
employer (ARC), an amountactuariallydeterminedin accordancewiththeparametersofGASS
Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis
t
is
projected to cover normal cost each year and amortize any unfunded actuariaJ liabilities (or
funding excess) over a period not to exceed thirty years. Based on the January 1, 2008,
actuarialvaluation, theARCisO 7 ~ ofactivepayroll payableforthefiscalyears2008through
2010. ThefollowingtableshowsthecomponentsofTheFloridaBar'sannualOPEScostforthe
year, the amount actually contributed to the plan, and changes in The Florida Bar's net OPES
obligationtoTFBRHP:
Annualrequiredoontribut:ion $ 52,700
InterestonnetCPEBobligation
J\djustrrentstoannual requiredcontribution 6,033
ftllnuaJ ePEBcost(expense) $ 58,733
NetePEBobligation- July1, 2008 $ (6.033)
AnnualePEBcost(expense)for2009 58
t
733
Contributionsmadeduring2009 (52,700)
NetOPESobligation- June30, 2009 $
The Frorida Bar's annual OPEB cost, the percentage ofannual OPES cost contrtbuted to the
plan, andthenetOPESobligationfor2009andthe precedingtwoyearswereasfollows:
AnnualOPEB PercentageofAnnualOPESCost NetOPEB
FiscalYearEnded Cost Contribtued Obligation
6/30/2007 $ 64,766 100
%
$
6/30/2008 58,733 110.27
%
(6,033)
6/30/2009 58,733 900/0
- 24-
NOTE 11 - RETIREE POSTEMPLOYMENT HEALTH BENEFITS (CONTINUED)
Funded Status and Funding Progress. As of January 1, 2008, the most recent actuarial
valuation date, the plan was 100
%
funded. The actuarial accrued liability for benefits was
calculated to be $1,216,209 and the actuarial value of the assets was $1,288,476, resulting in a
funding excess of $72,267. The covered payroll (annual payroll of active employees covered by
the plan) was $14,296,752, and the ratio of the UAAL to the covered payroll was (0.51%).
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 annua' 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
of sharing of benefit costs between the employer and plan merrlbers 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.
In the January 1t 2008 actuarial valuation. the projected unit credit actuarial cost method was
used. The actuarial assumptions included a 7.50,lc. investment rate of return
t
which is the rate of
the expected long-term investment returns on plan assets and an annual healthcare cost trend
rate of 12AJ initially, reduced by decrements to an ultimate rate of 5h in the year 2015 and
beyond. Both rates included a 3% inflation assumption. As of the January 1, 2008 actuarial
valuation, TFBRHP did have 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 an
open basis. The remaining amortization period at January 1, 2008 was 30 years.
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Funding Progress
Actuarial
Accrued
liability UAALas a
Actuarial (AAL)- Unfunded Percentage
Actuarial Value Projected AAL Funded Covered of Covered
Valuation of Assets Unit Credit (UAAL) Ratio Payroll Payroll
Date (a) (b) (b - a) (alb) (c) (b a) I c)
1/1/06 $ - $ 1.203.784 $ 1,203,784 0.000/0 $ 12.946,872 9.300/0
1/1/08 1,288,476 1,216,209 (72,267) 105.94%
14.296,752 -0.51/0
NOTE 12 - LEASES
The Florida Bar is the lessee of office space under operating leases expiring in various years
through the year 2017
t
with escalation clauses.
- 25-
NotestoConsolidatedFinancialStatements
NOTE12- LEASES(CONTINUED)
The Florida Barleases office spacefrom itswhorly-owned subsidiary, TheFlorida BarBuilding
Corporation. The intercompany rental income and rental expense have been eliminated in
consolidation.
Futureminimumrental payments areasfollows:
Years ending June 30
1 Amount
2010 $ 1,471,281
2011 1,140,368
2012 1,162,578
2013 1,192,584
2014 351,978
Thereafter 897,915
Totalminimumfuturerentalpayments $ 6.216,704
Totar rental expense for the fisca1 year ended June 30, 2009 and 2008 was $882,953 and
$863,980, respectively.
TheFlorida Baris alsothelessorofcerta.in officespacein abuitding ownedbyTheFlorida Bar.
The space is rented to unrelated entities under operating leases expiring in various years
throughthe year2013. Rental incomeforthefiscal yearsendedJune30. 2009 and 2008were
$268,967and$293,928, respectively.
Futureminimumrentalreceiptsareasforlows:
Years ending June 30, Amount
2010
2011
2012
2013
2014
$ 272,974
279,790
286,784
293,818
73,894
Totalminimumfuturerental payments $ 1,207,260
NOTE13- CONTINGENCIES
The Florida Baris involved in several actions as defendantand/orco-defendant. The majority
oftheactionsareexpectedtobesettled with little ornofinancial impacttoThe Florida Bar. An
accurateassessmentofanysignificantliabilityisnotdeterminablealthough managementofThe
Florida Barbelievesthatthe possibilityofanysignificant liabilityarisingfrom currentlitigation is
extremelyremote.
- 26-
Supplementary Information
NOTE 14 - 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
should choose to cancel the contract(s), liquidating damages will be due to the hotel. GeneraUy,
liquidating damages are tiered depending on the time between cancellation and scheduled
arrival date and are based on a percentage of anticipated revenues.
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, 2009:
Estimated
liquidating
Event damages
Annual Meeting $ 534,904
Board of Governors Meetings 8 ~ 185
General Meeting 121,760
Section Meetings 3,148,334
Continuing Legal Education Seminars 384,953
Total commitment
NOTE 15 - DESIGNATED FUND BALANCES
The Florida Bar has designated certain net assets to be used for specific program purposes. As
of June 30, 2009 and 2008, the designated net assets were $12,751
1
829 and $14,614,367,
respectively.
NOTE 16 - RISK MANAGEMENT PROGRAMS
The Florida Bar is exposed to various risks of loss related to torts; theft of, damage tar and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
Workers' compensation, propertYI 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 - RISKS AND UNCERTAINTIES
The Florida Bar investment securities are exposed to various risks. such as interest rate, market
conditions, and credit risks. 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 that such changes could materially affect investment balances.
.. 27-
Consolidating Statement of Net Assets
Clients'
June 3D, 2009
General
Fund
Bar Center
Fund
Security
Fund
Certification
Fund
Sections
Fund
Eliminating
Entries
Total
All Funds
Assets
Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Due fram other funds
Prepaid expenses and other assets
Total current assets
$ 13,222,298
31,514,971
546,936
-
384.082
45,668,287
$ 687,733
-
4,871,596
-
5,559,329
$ -
-
4,364,451
-
4,364,451
$ -
-
808.087
-
808.087
$ -
-
3,506,021
-
3,506,021
$
20,230
(13,550,155)
(25,117)
(13,555,042)
$ 13,910,031
31.514,971
567,166
358.965
46,351,133
Restricted assets
CSF Recovery Receivable
Investment in The Florida Bar
Building Corporation
Total restricted assets
_..
1,611,647 -
1,611,647 -
1,692,991
-
1,692.991
-
-
..
-
(1 ,61J ,6_4I)
(1,611,647)
1,692,991
1,692,991
Capital assets, net
Land
landscaping and parking
Construction in progress
Accumulated depreciation
Total capital assets, net
-
-
-
-
..
-
...
1,306,690
9,630,046
120,318
4,792,884
6,243
(8,777,343)
7,078,838
-
-
-
-
-
-
..
-
-
-
-
...
-
-
-
-
..
-
...
-
-
..
..
-
..
-
..
-
1,306,690
9,630.046
120.318
4,792.884
6,243
(8.777.343)
7,078,838
Total assets $ 47,279.934 $12,638,167 $ 6,057,442 $ 808,087 $ 3.506,021 $ (15,1661689) $ 55,122,962
See Independent Auditors' Report.
- 28 ..
Consolidating Statement of Net Assets
(Continued)
Clients'
General Bar Center Security Certification Sections Eliminating Total
June 3D, 2009 Fund Fund Fund Fund Fund Entries All Funds
Liabilities and Net Assets
Current liabilities
Current portion of long-term debt
Accounts payable
Claims payable
Accrued expenses
Due to other funds
Deferred revenues
Security deposits
Total current liabilities
2,825,244
$
1,002,335
12,270.199
7,670,851
-
23,768,629
$ 1,451,635
103,346
-
-
74,023
1,629,004
$
79,646
-
-
-
79,646
$
-
-
-
-
$
-
-
-
-
(1.259,726)
$
(12,270,199)
-
(25,117)
(13,555.042)
$ 1,451.635
1,668,864
79.646
1,002,335
7,670,851
48,906
11,922,237
Non-current liabilities
Long-term debt, less current portion
Compensated absences payable
Deferred revenue for CSF recovery
Totat non-current liablities
2,407,183
2,407,183
1.692,991
1,692,991
2,407,183
1,692,991
4,100,174
Total liabilities 26,175,812 1,629,004 1.772,637 (13,555,042) 16,022,411
Net assets
Invested in capital assets, net of related debt - 5,627,206 .. - .. - 5,627,206
Restricted for scholarships 32.405 - - - .. .. 32,405
Unrestricted
Designated 382,606 3,770,310 4,284.805 808.087 3,5061 021 - 12,751,829
Undesignated 20,689,111 - - - - .. 20,689,111
Contributed capital .. 1,611.647 - - - (1,611,647) ..
Tatar net assets 21,104,122 11,009,163 4,284.805 808,087 3,506,021 (1
t
611.647) 39,100,551
Total liabilities and net assets $ 47,279,934 $12,638,167 $ 6,057,442 $ 808,087 $ 3.506.021 $(15,166,689) $ 55,122,962
- 29-
Consolidating Statement of Revenues, Expenses and Changes in Net Assets
Clients-
Year ended June 3D, 2009 Fund Fund Fund Fund Fund Entries All Funds
Operating revenues
Annual fees $ 22,035,716 $ $ $ $ $ $ 22,035,716
Other fees from members 3,692.494 1.217,804 1,195,790 6,106.088
Sales of products and services 7,088,350 5,969 2,456.896 9,551,215
Advertising 2,084,265 2.084.265
Young lawyers 554.687 554,687
Grants and other 321,192 1.039.989 253.122 (843,285) 771.018
Total operating revenues 35.776.704 1,039,989 253,122 1.223.773 3.652.686 (843.285) 41,102,989
Operating expenses
Regulation of the practice of law 14.994,945 - - 1.134.626 - (338,135) 15,791,436
Cost of products and services provided to members 8,923,681 - - - 3,925,054 (201,229) 12,647.506
Unauthorized practice of law 1.415,647 - - - - (31,923) 1.383.724
Public service programs 862.035 - 2,054,362 - - (19,439) 2,896,958
Communication with members and the public 4,189,899 - - - - (94,482) 4.095,417
Administration 2.530,467 - - - - (46.914) 2,483,553
Legislation 6721665 - - - - (15.169) 657,496
Young lawyers 577,178 - - - - (13,015) 564.163
Depreciation and amortization - 771,679 - - - - 771.679
Other programs and costs 16.925 480,749 - - - (82.979) 4-14,695
Total operatrng expenses 34,183,442 1,252,428 2.054,362 1,134.626 3,925,054 (843,285) 41,706,627
Operating Income (loss) 1,593,262 (212,439) (1,801,240) 89.147 (272.368) - (603,638)
Non-operating revenues (expenses)
Investment earnings
rnterest expense
loss on disposal of capital assets
Total non-operating revenues
(3,121,119)
-
..
(3.121,119)
(447,142)
(121, 703)
(13.935)
(582.780)
(413,036)
(413,036)
(57,077)
(57.077)
(404,354)
(404,354) -
(4,442,728)
(121,703)
(13,935)
(4.578.366)
Change In net assets (1.527,857) (795.219) (2.214.276) 32,070 (676,722) - (5,182.004)
Net assets. beginning of year 24,980,051 11,086,382 4,869,009 776.017 4,182,743 (1.611.647) 44,282,555
Transfers (to) from other funds (2.348,072) 718,000 1,630,072
Net assets, end of year $ 21.104,122 $ 11,009,163 $ 4.284.805 $ 808,087 $ 3,506,021 $ (1,611,647) $ 39,100,551
- 30-
Consolidating Statement of Cash Flows
Clients
Year ended June 30, 2009 Fund Fund Fund Fund Fund Entries All Funds
Cash flows from operating activities:
Receipts from members. customers and other sources
Payments to employees. suppliers and other vendors
Net cash activities
$ 32.596.034 $ 1,039.989 $ 253.122 $ 1.223,773 $ 3,652,686
(37.872.341) 612,771 159.914 (1,166,696) (3,248,332)
(5,276.307) 1.652.760 413.036 57.077 404.354
$ 4,332
(4.332)
-
$ 38,769.936
(41.519.016)
(2.749.080)
Cash flows from non-capital and related financing activities:
Reduction of debt
Interest paid
Net cash (used in) non-capital and related financing
activities
- (214.251) .. - ..
.. (121,703) .. - -
.. (335.954)_ .. _ -_ -
-
..
..
(214.251)
(121.703)
(335.954)
Cash flows from capital and related financing activities:
Acquisition of capital assets
Net cash (used in) capital and related financing activities
- (1,014,350) w - ..
.. (1,014,3!?0) . __.__ ._... _ w ..
-
..
(1.014,350)
(1,014.350)
Cash flows from investing activities:
Redemption of investments
Purchase of investments, net of change in fair value
Investmentincome
Net cash (used in) provided by investing activities
17,546.867.. - .. -
(9,153,257) - - .. -
(3,121,119) (447,142) (413.036) (57,077) (404,354)
5,272,491 (447, 142) (413,036) (57,077) (404,354)
..
-
-
-
17.546.867
(9,153,257)
(4,442,728)
3,950.882
(Decrease) Increase in cash and cash equivalonts (3.816) (144.686) (148.502)
Cash and cash equivalents. beginning oiyear 13,226.114 832,419 14,058.533
Cash and cash equivalents, end of year $13,222,298 $ 687.733 $ $ $ $ $13.910,031
- 31
ConsolidatingStatementofCashFlows
(Continued)
Year ended June 30, 2009
General
Fund
BarCenter
Fund
Clients'
Security
Fund
Certification
Fund
Sections
Fund
Eliminating
Entries
Total
AllFunds
ReconciliationofoperatingIncometonetcashprovided
by(usedIn)operatingactivities:
Operating income(Joss) $ 1,593.262 $ (212,439) $ (1,801.240) $ 89,147 $ (272.368) s $ (603,638)
Adjustmentsto reconcile operatingincome(loss) to
netcashprovidedby(usedin) operatingactivities
Depreciationand amortization 771.679 771,679
Transfers(to)from otherfunds (2,348,072) 718.000 1,630,072
(Increase)decreasein:
Accountsreceivable. net (310,195) (1,692.991) 4,332 (1,998,854)
Duefrom otherfunds 327.344 869.378 (32,070) 676.722 (1,841,374)
Prepaidexpenseand otherassets 279,782 279,782
Increase(decrease) in:
Accountspayable 50,219 47,866 165,659 263.744
Claimspayable (285,174) (285,174)
Accruedexpenses (17.676) (17.676)
Deferredrevenues (2,870,475) 1.692.991 (1,1n,484)
Securitydeposits - 310 310
Duetootherfunds (1,671.383) - - - 1,671,383
Compensatedabsencespayable 18,231 - - - - - 18,231
Netcashprovided by(used in)operating_activities $ (5,276,3071 _$ 1,652,760 $ _u 413,036___ S 57,077 $ 404,354 $ - $
Non-cashinvesting,capitalandfinancingactivities:
Chan ein thefairvalueofinvestments $
..
$ - $ - $ - $ - $
Lossondisposal0 assets $ 13,935 $ - $ - $ $ - $
Supplementalinformation:
Cashpaidforinteresl $ - $ 121,703 $ - $ - S - $ - $ 121,703
SeeIndependentAuditors'Report.
- 32-
Variance
Favorable
Year ended June 30, 2009 Actual Budgeted (Unfavorable)
Revenues - budgetary basis
Annual fees
Investments
Authorized house counsel
Board and officer expense
Lawyer regulation
Florida registered paralegal program
Professional enhancement program
Division director - ethics) UPL and professionalism
Unlicensed practice of law
Ethics
Lawyer advertising
Professionalism
Multijurisdictional practice
Meetings and conventions
Addressing services
Continuing legal education program
Continuing legal education rule
Course approval center
Public service programs
Foreign legal consultants
Law office management advisory services
Member benefits program
Legal publications
Section administration
Young lawyers division
Committtee expenses
Public information
Journal
News
Directory
Building a.nd grounds
Other revenue
G. Kirk Haas Fund (restricted revenue)
$ 22,035,716 $
(3,123,861)
226,693
(10)
696,762
219,900
102
1
046
113
2,545
545,357
75,242
604,450
652,147
185,598
3,838,437
654,607
125,126
591,763
7,730
160,425
673,205
662,073
844,456
554,687
10,248
90,177
599
1
589
1,325,067
159,609
72,449
5,939
493
22,359,451 $ (323,735)
1,950,000 (5,073,861)
305,650 (78,957)
(10)
735,741 (38,979)
225,000 (5,100)
93,750 8,296
113
3,645 (1,100)
50 (50)
451,106 94,251
127,361 (52,119)
525,000 79,450
622,588 29,559
175,000 10,598
4,082,532 (244,095)
519,690 134,917
136,841 (11,715)
820,207 (228,444)
9,625 (1,895)
178,308 (17,883)
584,414 88,791
1,024,000 (361,927)
854,688 (10,232)
819
1
075 (264,388)
5,000 5,248
156,826 (66,649)
511,218 88,371
1,579,484 (254,417)
177,458 (17,849)
65,000 7,449
10,000 (4,061)
3,700 (3,207)
Total revenues - budgetary basis 32,598,778 39,112,408 (6,513,630)
- 33-
(Continued)
Variance
FavorabJe
Expenses .. budgetary basis
General administration
Staff and office expense
Travel
Interna[ service and administration
Other operating expenses
Total general administration
$ 641,600
56,200
32,716
22,658
753,174
$ 926.060
62,957
32,906
18.034
1,039,957
$ 284,460
6.757
190
(4,624)
286.783
Board and officer
Travel
Internal service and administration
Total board and officer
234.793
30,838
22,499
366.432
654,562
251,444
29,206
17,414
418,125
716.189
16,651
(1 )632)
(StOB5)
51,693
61,627
Legislation
Staff and office expense 145.724 139,810 (5,914)
Contract services 286,766 286,737 (29)
Travel 2,354 9,646 7,292
Internal service and administration 70.105 63,116 (6,989)
Other operating expenses 823 2,020 1,197
Total legislation 505,772 501.329 (4,443)
Authorized house counsel
Staff and office expense 11,432 9.794 (1,638)
Internal service and administration 3,183 4,306 1,123
Other operating expenses 1,204 1,272 68
Total authorized house counsel 15,819 15,372 (447)
General counsel
Staff and office expense 128,950 137.242 8.292
Contract services 684,497 729,973 45.476
Travel 2,260 5,684 3,424
Internal service and administration 5,109 33,660 28,551
Other operating expenses 644 736 92
Total general counsel 821,460 907,295 85,835
Division director - legal
Staff and office expense (11.276) (138) 11,138
Travel 11,191 16.139 4.948
Internal service and administration 85 999 914
Other operating expenses 500 500
Total division director - legal 17,500 17,500
.. 34-
(Continued)
Variance
Favorable
Expenses - budgetary basis
Attorney Consumer Assistance Program
Travel
Total lawyer regulation
Lawyer regulation
Travel
Total lawyer regulation
1,178,693
160,013
46,052
1,384,758
8,729,265
136,000
1,349,970
390,904
10,606,139
1,293,617 114,924
162,544 2,531
47,362 1,310
1,503,523 118,765
9,274,399 545,134
143,764 7,764
1,729.292 379,322
442,544 51
1
640
11,589,999 983,860
Professional enhancement program
Staff and office expense 27,603
Travel 5
1
519
Internal service and administration 4,652
Other operating expenses 2,488
Total professional enhancement program 40,262
Djvision director - ethics, UPL and professionalism
Travel
Less cost dist.
Jntarnal service and administration
26.870
7
1
560
(34,433)
3
33,368
12,899
6,373
2.686
55,326
5,765
7,380
1,721
198
15,064
140,337
10,496
(150,873)
113,467
2,936
(116,440)
40 37
Total division director - ethics. UPL and professjonarism
Unlicensed practice of raw
Staff and office expense 1,184,670 1,231,332 46,662
Travel 29,965 48
1
495 18,530
InternaJ service and administration 179,436 199,360 19,924
Other operating expenses 27,362 47,461 20,099
Total unlicensed practice of law 1,421,433 1
r
526,648 105,215
Lawyer assistance program/substance abuse
Staff and office expense 7,922 10)238 2,316
Internal service and administration 60,219 60
1
938 719
Other operating expenses 453
1
000 453,000
Total lawyer assistance program/substance abuse 521,141 524,176 3,035
See Independent Auditors Report.
- 35-
General Fund Schedule of BUdgeted and Actual Revenues and Expenses
Expenses- budgetarybasis
Ethics
Staffandofficeexpense
Travel
Internalserviceand administration
Otheroperatingexpenses
Tatal ethics
Lawyeradvertising
Contractservices
Travel
InternaJ serviceand administration
Totaflawyeradvertising
Recordsmanagement
lnternal serviceandadministration
Total recordsmanagement
Rules
Travel
Internalserviceandadministration
Total rules
Ethics/advertisingstaffpool
Tetalethics/advertsisingpool
Professionalism
ContractselVices
Travel
Internarserviceandadministration
Otheroperating expenses
Tatal professionalism
Multijurisdictional practice
TotaJ multijurisdictional practice
FloridaRegistered Paralegal
Travel
TotalFlorida Registered Paralegal
Actual
635,971
4,230
84,405
4,992
729,598
636,473
77
6,437
851762
10,101
738,850
171.314
22,382
193.696
85
1
454
11,861
30
97.345
(2)
(2)
450,545
52,265
24,446
71,943
5,792
604.991
24.414
3,193
25
27,632
58,019
2,246
45,941
5,598
111rB04
(Continued)
Variance
Favorable
Budgeted (Unfavorable)
646,458 10.487
3,804 (426)
86,364 1,959
7,624 2,632
744,250 14,652
708,303 71,830
38,725
9,816 3,379
147,620 61,858
10.548 447
915,012 137,514
173,000 1.686
(22,382)
173,000 (20.696)
70,532 (14,922)
1,946 1,946
(11.861)
75 45
72,553 (24.792)
(926) (924)
(926) (924)
510.800 60.255
65,205 12.940
55
1
039 30,593
77.815 5.872
24,233 18.441
733,092 128,101
25,915 1.501
4.951 1,758
320 295
31,186 3,554
68,381 10,362
6,052 3,806
28,365 (17,576)
12,210 6.612
115,008 3,204
- 36-
(Continued)
Variance
Favorable
Expenses- bUdgetary basis
Shippinga,nd receiving
Staffand officeexpense
Lesscostdistribution
Totalshippingand receiving
135,712
(4,684)
(115,524)
15,504
155,987
(5,500)
37
(161,294)
(10,770)
20,275
(816)
37
(45,770)
(26,274)
Buildingand grounds
Travel
1.696,648
2,515
68
6
(1,557,291)
Totalbuildingand grounds 141,946
Meetingsand conventions
Contractservices
Travel
Internalserviceand administration
370
1
445
2.176
17.418
380,338
476.822
(36.328)
Totalmeetingsand conventions 1,210,871
Informationsystems
Contractservices
Travel
1nternalserviceand administration
2.763,607
711,848
9,869
48
65
1
282
(3,550,693)
Totalinformationsystems (39)
Humanresource management
Travel
lnternalserviceand administration
247,836
1,915
54,423
15,482
(319,656)
1,848.694 152,046
2.000 (515)
550 482
2 (4)
(1.786,246) (228,955)
65.000 (76,946)
363,256 (7.189)
2,383 207
26,976 9,558
266,109 (114,229)
456,303 (20,519)
(27,499) 8,829
1.087,528 (123,343)
3,135,317 371,710
712,956 1,108
14,922 5,053
17 (31)
69,072 3,790
(4.436,112) (885,419)
(503,828) (503,789)
274.987 27,151
2,272 357
17,909 (36,514)
31,428 15,946
(320,093) (437)
Totalhumanresourcemanagement 6,503 6.503
- 37-
Expenses - bUdgetary basis
Division director - progra.ms
Travel
Total diVision director - programs
Continuing legal education programs
Travel
Total continuing legal education programs
Continuing legal education rule
Travel
Intemal service and administration
Total continuing legal education rule
Course approval center
Total course approval center
Legal education and specialization pool
Total legal education and specialization pool
Professional development pool
Travel
Actual
(12,003)
4,075
7,587
266
(75)
808,987
67.286
949.676
1,759,577
3,585,526
230,456
586
95.636
24.117
350,795
109,741
11,940
3,443
125,124
4
2,846
2,850
(1,840)
729
1,111
Total professional deve[opment pool
Public service programs
Staff and office expense 451,294
Travel 718
Internal service and administration 106,502
Other operating expenses 305,255
Total public service programs 863,769
(Continued)
Variance
Favorable
Budgeted (Unfavorable)
(6,922) 5,081
6.715 2.640
7,647 60
60 (206)
7,500 7,575
887,592 78,605
67,301 15
1,006,932 57,256
1,806,791 47,214
3.768,616 183,090
306,992 76,536
1,181 595
42,973 (52.663)
32,352 8,235
383,498 32,703
118,216 8,475
15,801 3,861
2,824 (619)
136,841 11,717
(151,111)
150,000
111
(1,000)
(151,115)
147,154
111
(3.850)
(724)
19
705
(1,572)
300
204
1,068
456.612
3,027
169,500
306,583
935,722
5,318
2,309
62,998
1,328
71,953
- 38-
(Continued)
Variance
Favorable
Expenses- budgetarybasis
Foreign legalconsultants
Staffandofnceexpense
Totalforeignlegalconsultants
4,651
619
81
5.351
Printshop
Staffandofficeexpense 388.372
Internalserviceandadministratjon
Otheroperatingexpenses 69,367
Lesscostdistribution (467.564)
Total printshop (9,825)
Lawofficemanagementadvisoryservices
Travel
Total lawofficemanagementadvisoryservices
295,646
34.540
55,719
10,686
396,591
7,150 2,499
1,021 402
274 193
8,445 3,094
472,181 83.809
23 23
99,907 30.540
(568,316) (100,752)
3.795 13,620
358.343 62.697
60,460 25.920
62.217 6,498
7.729 (2,957)
488,749 92,158
Memberbenefitsprogram
Staffandofficeexpense 48,250 88,023 39.773
Internalserviceandadministration 28,936 36,893 7,957
Otheroperatingexpenses 172,152 191,776 19.624
Totalmemberbenefitsprogram 249,338 316,692 67.354
Legal publications
Staffandofficeexpense 1,063,419 1,133,983 70,564
Travel 16,058 25,414 9,356
Internalserviceandadministration 167.755 163,279 (4,476)
Otheroperating expenses 46,713 54.975 8.262
Total legalpublications 1.293,945 1,377,651 83,706
Sectionadministration
Staffandofficeexpense 598,081 579,046 (19,035)
Travel 2,323 2.860 537
Internalserviceandadministration 623,355 634.335 10,980
Otheroperatingexpenses 3,316 6,813 3,497
Totalsectionadministration 1.227,075 1,223,054 (4,021)
Young lawyersdivision
Staffandofficeexpense 51,030
Traver 10,829
Internalserviceand administration 75,901
Otheroperatingexpenses 439,418
Totalyoung lawyersdivision 577,178
46,530 (4,500)
9.960 (869)
98.615 22,714
635,192 195.774
790,297 213.119
SeeIndependentAuditors Report.
.. 39-
(Continued)
Variance
Favorable
Expenses - budgetary basis
Committee
Staff and office expense 76,737 111,363 34,626
Travel 4,856 7,449 2,593
Internal servjce and administration 56,163 49,544 (6,619)
Other operating expenses 72,104 59,858 (12,246)
Total committee 209,860 228,214 18,354
Public information
Contract services
Travel
Total public information
Office systems
Less cost distribution
Total office systems
693,493
3,178
55,480
307,782
119,991
1,179,924
456,880
204
52
(439,997)
17,139
746,040
6,555
90,827
354,776
201,656
1,399,854
498,471
2,500
145
(497.485)
3,631
52,547
3,377
35,347
46,994
81,665
219,930
41,591
2,296
93
(57,488)
(13.508)
"Journal" - tlNews" staff pool
Staff and office expense (87,574) (76,684) 10,890
Travel 2,669 4,129 1,460
Intarnal service and administration 75,481 62,500 (12,981 )
Other operating expenses 9,442 10,055 613
Tota,! ttJourna,l
n
- "News" staff pool 18 (18)
t1Journal"
Travel 2,315 2,315
Internal service a,nd administration 107.116 108,012 896
Other operating expenses 528,233 545,216 16,983
Less cost distribution (7,325) (7,140) 185
Total It Journal" 926,985 951,635 24,650
UNews"
Travel
Less cost distribution
Tota,1 uNews"
495,520
10,966
197,270
1,185,610
(183,003)
1,706,363
532,160
13,523
202,562
1,227,341
(148,897)
1,826,689
36,640
2,557
5,292
41,731
34,106
120,326
- 40-
GeneralFundScheduleofBudgetedandActual RevenuesandExpenses
(Continued)
Variance
Favorable
Year ended June 30, 2009 Actua,1 Budgeted (Unfavorabre)
Expenses- bUdgetarybasis
Directory
59.137
44.385
282.010
(1.410)
Total Directory 384.122
61,307 2,170
46,317 1,932
304,184 22,174
(3,897) (2,487)
407,911 23,789
Fina,nceand records
Contractservices
Travel
InternaJ serviceandadministration
Totalfinanceandrecords
1,776,758
58,182
8,288
1,227.518
284.770
(2,508.025)
847,491
8
1,871,693 94,935
64,500 6,318
1
946 658
1,136.802 (90.716)
317.805 33,035
(1,951,662) 556,363
1,448,084 600,593
Research. planningandevaluation
Contractservices
Travel
Otheroperating expenses
Totalresearch, planningandevaluation
169,239
10,200
4,504
1,327
7,759
193,029
Divisiondirector- adn1inistration
Staffandofficeexpense 128.724
Travel
Internalserviceandadministrat.ion 170
Otheroperating expenses 170
Lesscostdistribution (129,064)
Totaldivision directors- administration
175,589 6.350
11,027 827
5,954 1,450
521 (806)
10,559 2.800
203.650 10,621
215,773 87,049
825 825
369 199
343 173
(129,692) (628)
87,618 87.618
G. KirkHaasFund (restrictedfund) 2,500 2.500
Totalexpenses 341 731,789 37
1
824,568 3,054
1
131
Excessofrevenuesoverexpenses- bUdgetarybasis $ (2
1
133.011) $ 1,287.840 $ (3.459,499)
See IndependentAuditors' Report.
- 41 -
GeneralFundReconciliationofRevenuesandExpensesona
BudgetaryBasistoTotalsPertheConsolidatingScheduleof
StatementofRevenues, ExpensesandChangesinNetAssets
Excessof
Revenues
Operating Over(Under)
Year ended June 30, 2009 Revenues Expenses Expenses
TotalsonbUdgetarybasis $ 32,598,778 $ 34,731,789 $ (2
1
133,011)
Add:
SUbsidiaryoperations
FloridaLawyersAssociationfortheMaintenanceof
Excellence, Inc.
TheFloridaAttorneysCharjtableTrust
2,742
54,065
166
1
893
3.389
(164.151)
50,676
Less:
Adjustmentsforfinancialstatementpresentationpurposes
Netchangeinthefairvalueofinvestments 3,121,119 3
1
121,119
Budgeteditemstreatedasinterfundtransfersforbasic
financialstatementpurposes
Depreciation (718.629) 718,629
Totaloperating revenues, expensesandincomeperConsolidating
ScheduleofStatementofRevenues, ExpensesandChangesin
NetAssets $ 35,776.704 $ 34.183,442 $ 1,593,262
SeeIndependentAuditors' Report.
- 42-
Clients' Security Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Year ended June 3D, 2009 Actual Budget
Favorable
(Unfavorable)
Operating revenues
Annuar contribution 1t
Recoveries
$ 1,630,072
253.122
$ 1,629,720
14,850
$ 352
238,272
Total operating revenues 1,883,194 1,644,570 238,624
Operating expenses
Travel 6,700 11,149 4,449
Internal service and administration 203,751 166,189 (37,562)
Claims pajd 1,767
J
057 1,790.472 23,415
Other operating expenses 3,876 10.566 6,690
Total operating expenses 2,054,362 2,199,492 145,130
Operating income (loss) (171,168) (554,922) 383,754
Non-operating revenues
Investment earnings (413.036) 190,000 (603,036)
Total non-operating revenues (413,036) 190,000 (603
J
036)
Change in net assets $ (584,204) $ (364,922) $ (219,282)
* 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 $ (584,204)
Less: annual contribution treated as an interfund
transfer on the basic financial statements (1,630,072)
Change in net assets per Consolidating Schedule of
Statement of Revenues, Expenses and Changes in
Net Assets $ (2,214,276)
Certification Fund Schedule of BUdgeted and Actual Revenues and Expenses
Variance
Favorable
Year ended June 30, 2009 Actual Budget (Unfavorable)
Operating revenues
Member Fees
Sales
Total operating revenues
$ 1,217,804
5,969
1
1
223,773
$ 1,066,145
7,200
1,073,345
$ 151
1
659
(1 ,231)
150
1
428
Operating expenses
Contract services
Travel
Total operating expenses
721 ,021
20,986
44,045
149.487
199,087
1,134,626
868,832
25,550
69,742
188,029
204,406
1,356
t
559
147
t
811
4
t
564
25,697
38
t
542
5,319
221,933
Operating income (Joss) 89,147 (283
t
214) 372
1
361
Non-operating revenues
Investment earnings
Total non-operating revenues
(57,077)
(57,077)
30,000
30,000
(87,077)
(87,077)
Change in net assets per Consolidating Schedule of
Statement of Revenues, Expenses and Changes in
Net Assets $ 32.070 $ (253,214) $ 285,284
- 44-
Sections Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Revenues - budgetary basis
Administrative law $ 333 $ 38,139 $ (37,806)
Appellate practice and advocacy 87,625 76,029 11,596
Business law 337,676 321.011 16,665
City, county, and local government 56,854 58,772 (1,918)
Council of sections (253) 6,661 (6,914)
Criminal law 39,182 79,819 (40,637)
Elder law 65,234 140,911 (75,677)
Entertainment, arts and sports raw 40,178 41,245 (1,067)
Environmental and land use law 29,459 98,967 (69,508)
Equal opportunity law 6,706 4,205 2,501
Family law 740,047 782,347 (42,300)
General practice 98,603 91,749 6,854
Government lawyers 13,763 19,954 (6,191 )
Health law 29,672 46,804 (17.132)
International law 54,730 125,418 (70,688)
Labor and employment law 73,345 106,236 (32,891)
Out-ot-state practice (3,849) 21,852 (25,701)
Public interest law 12,195 9,380 2,815
Reat property, probate and trust raw 1,046,870 1,114,401 (67,531)
Tax law 223,115 375,834 (152,719)
Trial lawyers 224,721 279,726 (55,005)
Workers' compensation 72,126 82,092 (9,966)
Total revenues - budgetary basis 3,248,332 3,921.552 (635,414)
See Independent Auditors Report.
- 45-
SectionsFundScheduleofBudgetedandActualRevenuesandExpenses
Operating expenses- budgetarybasis
Administrativelaw
Appellatepracticeand advocacy
Businesslaw
City, county, and localgovernment
Councilofsections
Criminal law
Elderlaw
Entertainment,artsandsportslaw
Environmentalandlanduselaw
Equalopportunitylaw
Familylaw
Generalpractice
Governmentlawyers
Healthlaw
International law
Laborandemploymentlaw
Out-af-statepractice
Publicinterestlaw
Realpropertyt probateandtrustlaw
Taxlaw
Trial lawyers
Workers'compensation
Totalexpenses- budgetarybasis
Changein netassetspertheConsolidatingScheduleof
StatementofRevenues, ExpensesandChangesin Net
Assets
Actual
$ 14,358
54.540
410.148
58,130
6,085
101,324
139,500
81,428
86,265
1,644
684,925
129,094
14,526
25,191
217,374
84,269
25,254
4,395
1,106
t
707
429,299
167,313
83,285
3,925,054
$ (676.722)
(Continued)
BUdgeted
Variance
Favorable
(Unfavorable)
$ 48.644
63,080
436,526
112,087
7.964
127,582
131,813
50,771
156,296
5,929
719,677
116,815
24,313
46,172
137,086
97,436
36,812
8,246
1,172,719
602,900
226,481
129,690
$ 34,286
8,540
26,378
53,957
1,879
26,258
(7,687)
(30,657)
70,031
4,285
34,752
(12,279)
9,787
20,981
(80,288)
13,167
11,558
3,851
66,012
173.601
59,168
46,405
4,459,039 499,699
$ (537,487) $ (135,715)
46 -
Other Reports
Carr. Riggs&Ingram, LLC
I CRl
cARR
1713 Mahan Drive
4\ RIGGS &
~
~ ~ INGRAM
Tallahassee, Flonda32308
(850) 8788771
(850i B78-2344ltaxl
W\Nw.cricpa.col1l
REPORTONINTERNALCONTROLOVERFINANCIALREPORTINGANDON
COMPLIANCEANDOTHERMATTERSBASEDONAN AUDITOFFINANCIAL
STATEMENTSPERFORMEDINACCORDANCEWITH
GOVERNMENTAUDITING STANDARDS
BoardofGovernors
TheFloridaBar
Talfahassee
1
Florida
We have audited the basicfinancial statements ofThe Florida Bar and Subsidiaries as of
and fortheyearendedJune30
1
2009, and have issued ourreportthereondated September
24, 2009. Weconductedourauditin accordancewith auditing standardsgenerallyaccepted
in the Unlted StatesofAmerica and the standards applicabletofinancial auditscontained in
Government Auditing Standards, issuedbytheComptrollerGenerafoftheUnitedStates.
InternalControlOverFinancialReporting
In planning and performing our audit
1
we considered The Florida Bar and Subsidiaries'
internal control overfinancial reporting as a basisfordesigning ourauditing procedures for
thepurposeofexpressingouropinionsonthefina,ncial statements, butnotforthepurposeof
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
effectivenessofTheFlorida BarandSubsidiaries'internalcontroloverfinancialreporting.
A control deficiency exists when the design or operation of a control does not allow
management oremployees, in the normal course ofperforming theirassigned functions, to
prevent or detect misstatements on a timely basis. A significant deficiency is a control
deficiency, orcombination ofcontrol deficiencies, that adverselyaffects TheFlorida Barand
Subsidiaries' ability to initiate, authorlze. 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
statementthat is morethan inconsequentialwin notbe prevented ordetected byThe Florida
Barand Subsidiaries'internalcontroL
Amaterialweaknessis asignificantdeficiencY1 orcombinationofsignificantdeficiencies
l
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,
- 47 -
Board of Governors
The Florida Bar
OUf 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 intemal
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 materia1 weaknesses,
as defined above.
Compliance and Other Matters
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
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 that are required to be reported under Government Auditing
Standards.
This report is intended solely for the information and use of the Board of Governors and
management and is not intended to be and should not be used by anyone other than these
specified parties.
~ ~ t ~ ~ l r C
Tallahassee, Florida
September 24, 2009
- 48-

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