NATIONAL GUARD ASSOCIATION OF THE UNITED STATES AND AFFILIATES YEAR ENDED 12/31/15

THOMPSON GREENSPON | CPAS & ADVISORS | PARTNERING FOR SUCCESS Audit Committee Meeting Overview Met Friday, 24 JUN 16, at 13:00 –Chair was present at NGAUS HQ along with Mr. Rick Castro and Ms. Natalie Anzzolin from Thompson Greenspon (TG) –Committee Members LTC Eric Leckel and MAJ John Brownell joined via telecon –MG Hoyer was unable to participate –Executive Session … No NGAUS Management Members were present during the Meeting Meeting Minutes have been drafted

THOMPSON GREENSPON | CPAS & ADVISORS | PARTNERING FOR SUCCESS Overall Audit Audits are “risk-based,” focusing on areas with the highest potential for risks and items to be corrected, i.e., investments, cash, etc. Unqualified/”clean” audit opinion 5 reports issued –NGAUS (membership association and building operations) –Building operating expense audit –NGAUS Insurance Trust –National Guard Educational Foundation –Consolidated Financial (all entities)

THOMPSON GREENSPON | CPAS & ADVISORS | PARTNERING FOR SUCCESS Overall Audit, cont’d –Accounting department prepared for audit –Audit progressed smoothly –TG prepared tax returns, awaiting approval

THOMPSON GREENSPON | CPAS & ADVISORS | PARTNERING FOR SUCCESS Financial Statement Highlights Excerpts from consolidated statement of activities: Revenue Membership $ 1,678,000 $ 1,784,000 Contributions 547, ,000 Insurance 1,330,000 1,545,000 Advertising/Marketing/General 2,362,000 2,157,000 Investments (234,000) 1,806,000 Building, net 1,421,000 2,478,000 Total Expenses 6,644,000 6,180,000 Change in Net Assets $ 460,000 $ 4,167,000

THOMPSON GREENSPON | CPAS & ADVISORS | PARTNERING FOR SUCCESS Required Communications Internal control letter: no weaknesses noted in internal control that require communication Governance letter: standard communication – no issues to report

THOMPSON GREENSPON | CPAS & ADVISORS | PARTNERING FOR SUCCESS Looking Ahead TG noted “revenue recognition” is an emerging issue among non-profits and will be an item to consider/address in coming years TG suggested NGAUS Staff ensure separation of duties within our internal controls continues to be emphasized when we bring on-board our new employee within the finance and accounting department

THOMPSON GREENSPON | CPAS & ADVISORS | PARTNERING FOR SUCCESS Final Remarks Third consecutive year where the overall NGAUS audit report has yielded “Unqualified/“Clean” audit opinions” TG provides similar services for ~ 70 Non-profits … would rate NGAUS internal controls in the top 10% - if not top 5% - of that group Thanks to COL (Ret) Patty O’Connell and Ms. Cheryl Young for their pre-audit preparations and diligent efforts in our on-going accounting processes