APPA: THE ASSOCIATION OF HIGHER EDUCATION FACILITIES OFFICERS Executive Summary, FINAL March 31, 2015 Audit

2015 Audit Highlights Unmodified (Clean) Opinion on GAAP Financial Statements. Total net income, $66,736 in FY 2015 compared to $260,367 in FY 2014 Total Assets Increased 6.8% Total Liabilities Increased 9% Net Assets Increased 3% Net assets represent 46% of total expense compared to 47% in prior year

Review of Draft Financial Statements Statements of Financial Position Total Assets Increased 6.8% to $4,491,571 in FY 2015 from 13% to $4,202,719 in FY 2014 (and $3,731,230 in FY 2013). Significant changes in Assets: A/R-Cert 150K Prepaids-100th 200K Total Liabilities Increased 9% to $2,111,808 in FY 2015 from 13% to $1,889,692 in FY 2014 (and from $1,678,570 in FY 2013). Significant changes in Liabilities: Dues Collection 66K Def Rev & Comp 200K Net Assets Increased $66K Net Assets to Total Expense Ratio Industry Minimum Goal = 30-50% 2015 APPA = 46% 2014 APPA = 47% 2013 APPA = 44%

Review of Draft Financial Statements Statements of Activities 2015 total revenue increased 2.6% to $5,307,217: FMEP 172K Annual Conference 194K Membership (68)K Education (206)K 2015 expenses increase 6.5% to $5,240,481: Education 27K Annual Meeting 140K FMEP 60K Planning & Gov 65K Publication (57)K Expenses Presented on a Functional Basis (Costs Allocated to Programs and Supporting Services) in accordance with Nonprofit Standards. Cost Allocations Based on Estimates of Staff Time Devoted to Activities. Expenses also presented on a natural basis in the back of the audit report. This will become a GAAP reporting requirement next year. (No change for APPA as we have always provided this particular report.)

Review of Draft Financial Statements General Observations (ASAE 2–5 Million Range) Operating Efficiency Ratio (Total Revenue/Total Assets) 1.18, ASAE 1.1 (with FY 2014 at 1.23) Leverage (Total Liabilities / Total Net Assets), .88, ASAE .80 (with FY 2014 at .82) Membership income represents 34% of total revenue, ASAE Median Benchmark is 39.9%. (with FY 2014 at 36%). Source: ASAE 14th Edition of the Operating Ratio Report, Revenues $2-$5 million, 700 Associations reporting. Total personnel expenses as a percent of total revenue is 31.2%; ASAE 44.6%; similar budget (with FY 2014 at 30.9%) Salary expense as a percent of total revenue is 23.6%, ASAE is 34.5%, similar budget (with FY 2014 at 23.2%) Revenue per employee, $442,268, ASAE $208,359 (with FY 2014 at $470,927)