Report from the Board: Annual Audit
From: LEAVEN, Vol. 40 No. 1, February-March 2004, p. 2.
The annual independent audit of LLLI for the fiscal year beginning April 1, 2002 and ending March 31, 2003 has been completed. The audit covers the financial operations of LLLI, which are based out of the Schaumburg, Illinois, USA office. To conduct this year’s audit we retained the services of Mann, Weitz & Associates LLC, (MW&A) of Deerfield, Illinois, USA. Since this is the first year that LLLI has used this auditing firm, some of the audit lines have been changed and comparison figures with the previous fiscal year are not included in the audited statements. However, these figures will be available in subsequent years. The new auditor, working closely with our new Finance Director, Courtney Hayes, has given us a valuable opportunity to view LLLI financial operations with fresh eyes.
The audited figures show that we completed the fiscal year 2002-2003 with a deficit of expenses over income (change in net assets) of $207,665. Our unrestricted net asset balance (excluding property and equipment) has decreased from $814,215 in 2001 to $469,655 in 2002 and now to $196,638 in 2003.
LLLI cannot remain solvent if deficits continue to occur. The auditor has recommended that LLLI build a reserve of between $1.5 million and $1.8 million within the next five years. While this is a sobering prospect in view of the difficult economic climate and the losses over the past three years, the Board agrees that accumulating a reserve is crucial to the long-term stability, health, and growth of the organization. Accordingly, the Board has determined that the 2004-2005 budget must include provision for building a reserve.
In view of the decline in assets, setting priorities and making the choices necessary will be an important challenge for the Board, the new Executive Director, and all of us in LLLI in determining and living within the LLLI budget for the fiscal year 2004-2005.
Reducing expenditures obviously will not be sufficient to solve our problems. We will need to expand our efforts to increase revenues. We can all encourage more memberships. Encouraging more memberships will help the organization at all levels. The new editions of THE BREASTFEEDING ANSWER BOOK, and THE WOMANLY ART OF BREASTFEEDING raise the hope and opportunity for greater sales. The United States Department of Health and Human Services National Breastfeeding Awareness Campaign may well help to boost both memberships and product sales in the United States. Our efforts to broaden our base of donors and attract new sources of funding will be guided by Stephanie Weishaar, our recently appointed Funding Development Director, and Pam Oselka, Associate Funding Development Director. They welcome your suggestions and can be contacted at SWeishaar at llli.org (email) and POselka at llli.org (email).
The auditor recommends that we explore ways to reduce our rather large inventory of older books and other products. Fewer non-LLLI publications will be carried. Watch for big sales as we strive to clean out the treasures tucked away in inventory.
Questions about the audit and the audited financial statements may be directed to Donna Cookson Martin, Chair of the Audit Committee, at dcmartin at llli.org (email). Questions about the finances of LLLI may be sent to Sharon Matuszek, Treasurer, at smatuszek at llli.org (email) or Carmen Vandenabeele, co-Chair of the Finance Committee, cvandenabeele at llli.org (email).