Members have been able to register for the $150 webinars at no charge as part of the deal that allowed the dues increase.
Sponsorship income grew 32% to $747,430 and helped boost total income 6% to $7,131,656.
Expenses were $7,489,154 or $7,729 more than in 2011.
Salaries and fringes of $4,149,253 were up $38,057 and consumed 58% of revenues for the period.
“Travel,” which includes meals for leaders and staff, rose 17% to $368,058, perhaps due to advance trips needed to arrange the annual conference in San Francisco which starts Saturday. That was the biggest gain in expenses.
Next year’s meeting in Philadelphia will cut travel expenses. PRS has not revealed the sites of conferences after Philadelphia, although New York chapter leaders have said that New York has been ruled out for future conferences because of high hotel costs. The last New York conference was in 2004 and before that in 1992.
PRS Talks of Non-Existent “Reserves”
FASB: 958-605-25-1 Revenue from exchange transactions follow generally accepted accounting principles (GAAP); for example, revenue derived from membership dues in exchange transactions shall be recognized over the period to which the dues relate. Nonrefundable initiation and life membership fees received in exchange transactions shall be recognized as revenues in the period in which the fees become receivable if future fees are expected to cover the costs of future services to be provided to members. If nonrefundable initiation and life membership fees, rather than future fees, are expected to cover those costs, nonrefundable initiation and life member fees received in exchange transactions shall be recognized as revenue over the average duration of membership, the life expectancy of members, or other appropriate time periods.
The Bonaventura statement on the eight-month figures of PRS says PRS is “poised to meet or exceed our annual goal of returning 1% of annual operating revenues back to reserves.”
The term “reserves” is reserved for use by banks and is not applicable to profit or non-profit corporations. The latter refer to their “net assets.”
Were PRS to calculate its net assets in the orthodox and even mandatory way, it would have a small amount of “net assets” in relation to its annual expenses.
Section 958-605-25-1 of the Financial Accounting Standards Board says that dues are to be booked over the period covered by the dues, which is one year in PRS’s case. Instead of carrying about half of its dues as a liability, as all major professional groups do, PRS books them almost completely as an “asset,” carving out $303,203 in the nine months report to cover the cost of print editions of Tactics and Strategist.
The American Institute of CPAs, for instance, reported dues income of $110 million for the year ended July 31, 2011 and carried $50 million of it on the liability side to recognize services owed to members. A cardinal rule of accounting is that money is booked as earned.
In promising free webinars to members in exchange for the dues hike, PRS is even more in debt than ever to members for a full year of services. If we take one half of the nine-months dues of $4.327,579 ($2,163,789) and subtract that from the “fund balance” or “net assets” of PRS of $3,372,327, we get $1,208,538 or less than two months of expenses of PRS which are about $10M yearly. PRS itself talks about six months of assets being the norm for non-profits.
The Society, by the way, champions “best” practices for its members, never “acceptable” practices. One of its practices is not to post responses O’Dwyer’s sends to its website although we post some PRS entries on odwyerpr.com.
A fact is that PRS does not have one of the four major accounting firms doing its books. It used to have Deloitte & Touche and Ernst & Young but that was more than ten years ago.
The AICPA allows reporters at its twice-yearly governing “Council” meetings and lets them take pictures and make recordings if they wish.