AUA Treasurer's Report: 2021
By: Thomas F. Stringer, MD, FACS | Posted on: 01 Aug 2022
The first face-to-face annual AUA meeting since 2019 recently and successfully concluded in New Orleans. It was widely embraced by our members and industry partners. The annual business meeting was held concurrently and included the Treasurer’s report which updated those in attendance on the AUA’s financial position and related activities particularly in regards to the fiscal year 2021. Routinely, the annual Treasurer’s report follows in AUANews in an effort to additionally communicate to the membership on the status and progress of the AUA in regards to current financials and outlook.
The AUA’s finances are reported on a combined basis. The four entities include the American Urological Association, Inc. (AUAER), the American Urological Association, Inc. (AUA Inc.), the American Urological Association, Inc. Political Action Committee (AUAPAC) and the Urology Care Foundation, Inc. (UCF). Collectively, these entities are referred to as the “AUA”.
The return to an in-person Annual Meeting for 2022 follows two years of unpredictable circumstances and incredible resilience. In 2020 a great deal of uncertainty remained related to COVID-19 and to the past and ongoing impact on in-person meetings. There was a certain optimism around the reality of having a re-scheduled annual meeting in September of 2021 in Las Vegas. We all know that in the end, an in-person meeting was not feasible. Once again, the quickness and adaptability of AUA Secretary John Denstedt, Office of Education chair Jay Raman and AUA staff made the conversion of the annual meeting to a virtual only format not only possible but viable.
Figure 1. Historical operating results, including 2022 budget.
The line graph in Figure 1 depicts historical operating results and includes budget projections for 2022. The blue line reflects operating revenue and the orange line operating expenses. A sharp downturn in both revenue and expenses is noted for 2020 which is reflective of the loss of the in-person meeting. Remember that the AM is the largest source of operating revenue for the AUA. Concurrently, expenses were curtailed with the execution of aggressive cost control measures that resulted in a small positive margin for 2020. 2021 operating results, on the other hand, reflect a substantial positive margin. This is, in large part, a result of non-recurring revenue from the dogged pursuit by AUA staff to obtain federal COVID relief funds including the forgiven PPP loan ($3.5M) and the Employee Retention Credit program ($3.25M). That, along with final 2020 meeting cancelation insurance proceeds, accounted for more than $9 million of revenue unique to 2021. Budgeted revenues and expenses are expected to more closely resemble pre-COVID levels in 2022.
|Figure 2. 2021 AUA combined operating revenue and expense.|
The pie chart in Figure 2 further breaks out sources for revenue and expenses for the combined AUA entities fiscal year 2021. The ‘Miscellaneous’ category on the revenue side includes the federal non-recurring revenue; this category routinely represents a much smaller part of the pie. As mentioned, the AM is the usual predominant source of revenue for the AUA, followed by the Office of Education and Publications are. Surplus funds generated by these programs are used to support the mission-based programs of the AUA within education, research and advocacy. The combined revenue for 2021 exceeded $44 million and included several a-typical revenue items specific to business support during the pandemic. The combined expenses were slightly over $34 million and reflected cost mitigating efforts in many programs and support areas.
The AUA is an agile organization that has continuously placed a strong emphasis on fiduciary responsibility to its membership. The Board of Directors and seasoned AUA management team have a long history of careful fiscal planning and stewardship. This remains essential to the sustainability of the financial health of the organization and allowed the AUA to withstand the unpredictable challenges of the last 2 years.
Over the last decade, the AUA board has approved fiscal policies presented by the Finance Committee to limit deficit spending and to allow for the expansion of member programs including Data, Science & Quality, and Policy & Advocacy. More recently, the Board has supported programs to enhance supplemental revenue including through publishing royalties. Last year the AUA Board completed a strategic and comprehensive analysis of spending needs and investment policies. That effort was to ensure that AUA will continue to meet the short-, intermediate- and long-term cash needs and spending obligations necessary to support its mission.
Through a combination of prudent annual budgeting and budget reforecasting, the AUA Board has demonstrated that it can proactively identify challenges to revenue streams and adjust operations as needed. At the same time, the AUA strives to recognize and capitalize on new opportunities as they present. Within the next month or so, the AUA staff and financial team will begin the 2023 budget and 2022 budget reforecast process. This will include careful analysis and input from all programs. We have recently finished a long-term investment allocation analysis with our advisor, Vanguard, which validated our investment strategy and affirmed AUA is adequately positioned to withstand recent market volatility.
The AUA remains committed to the tripartite mission of education, advocacy and research to advance urologic care and to bring value to our members and our patients. As Treasurer and part of the AUA financial team, I welcome your questions and input.