You are on page 1of 56

TheFloridaBarandSubsidiaries

FinancialStatementsand
SupplementalInformation
June30, 2013and2012
The Florida Bar and Subsidiaries
Table of Contents
June 30, 2013 and 2012
Independent Auditors' Report 1 - 2
Management's Discussion and Analysis 3-7
Financial Statements
Consolidated Statements of Net Position 8
Consolidated Statements of Revenues, Expenses, and Changes in Net Position 9
Consolidated Statements of Cash Flows 10 - 11
Notes to Consolidated Financial Statements 12 - 28
Supplementary Information
Consolidating Statement of Net Position as of June 30, 2013 29 - 30
Consolidating Statement of Revenues, Expenses and Changes
in Net Position for the year ended June 30, 2013 31
Consolidating Statement of Cash Flows for the year ended
June 30, 2013. 32 - 33
General Fund Schedule of Budgeted and Actual Revenues and Expenses
for the year ended June 30, 2013. 34 - 43
General Fund Reconciliation of Revenues and Expenses on a Budgetary Basis to
Totals Per the Consolidating Statement of Revenues, Expenses
and Changes in Net Position for the year ended June 30, 2013. 44
Clients' Security Fund Schedule of Budgeted and Actual Revenues and
Expenses for the year ended June 30, 2013. 45
Certification Fund Schedule of Budgeted and Actual Revenues and Expenses
for the year ended June 30, 2013. 46
Sections Fund Schedule of Budgeted and Actual Revenues and Expenses for the
year ended June 30,2013. 47 - 48
Other Reports
Report on Internal Control Over Financial Reporting and On Compliance and
Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards 49 - 50
Carr. Riggs & Ingram. LLC
1713 Mahan Drive
Tallahassee. FL 32308
(85m 8788777
(850) 8782344 (fax)
www.cricpa.com
Independent Auditors' Report
Board of Governors
The Florida Bar
Tallahassee, Florida
We have audited the accompanying consolidated financial statements of the business-type
activities of The Florida Bar and Subsidiaries (The Florida Bar), as of and for the year ended
June 30, 2013 and 2012, and the related notes to the financial statements, which collectively
comprise The Florida Bar's basic consolidated financial statements as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in the United
States of America; this includes the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these consolidated financial statements based on
our audit. We conducted our audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the
auditor's judgment, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation and fair
presentation of the consolidated financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
Board of Governors
The Florida Bar
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the business-type activities of The Florida Bar, as of June 30,
2013 and 2012, and the respective changes in financial position and cash flows thereof for the
years then ended in accordance with accounting principles generally accepted in the United
States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis on pages 3 through 7 is presented to supplement the
basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic consolidated financial statements
in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic consolidated financial statements, and
other knowledge we obtained during our audit of the basic consolidated financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the consolidated financial
statements that collectively comprise The Florida Bar's basic consolidated financial statements.
The supplementary information is presented for purposes of additional analysis and is not a
required part of the basic financial statements.
The supplementary information is the responsibility of management and was derived from and
relate directly to the underlying accounting and other records used to prepare the basic
consolidated financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic consolidated financial statements and certain
additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the
basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the
supplementary information is fairly stated, in all material respects, in relation to the basic
consolidated financial statements as a whole.
~ ~ ~ ~ - - C
December 12,2013
Management's Discussion and Analysis
TheFloridaBarandSubsidiaries
Management'sDiscussionandAnalysis
The Florida Bar is the statewide professional and regulatory organization for lawyers with more
than 96,000 members. Headquartered in Tallahassee, The Florida Baris a unified state bar by
ruleoftheSupremeCourtofFlorida. Membershipin TheFloridaBarisanecessarycomponentof
TheSupreme CourtofFlorida's regulation ofall lawyers licensedto practice lawin Florida (Article
IV, Section 15, FloridaConstitution). Thefoundationfortheorganizationis builtonaphilosophyof
equityand ethics. Through its programs and services, the Barsupportsthis philosophywith four
pillars thatfunction as the mission ofThe Florida Bar: providing public service, protecting rights,
promoting professionalism and pursuing justice. The following management's discussion and
analysis is intended to provide the readers ofThe Florida Bar's financial statements a general
overviewofthe financial activities during the lasttwo fiscal years (FY) that ended on June 30,
2013and2012.
FinancialHighlights
TheFloridaBar'stotalnetposition increasedapproximately$3.2million(or6.0%)overthecourse
of FY13. This was generated primarily from the favorable investment environment which
produced $2.5 million in earnings. For FY12, total net position increased approximately $1.6
million (or3.10/0) which was primarilygeneratedfrom internaldevelopmentofsoftware programs
which reducedsalaryand benefitexpensesbyincludingthem inthecostsofcapitalassets.
Total operating revenues for FY13 remained virtually unchanged from FY12. Total operating
expenses increasedapproximately$1.6million(or4.0%) in FY13. Incomparison, total operating
expenses decreased approximately $600,000 (or 1.4%) in FY12. The increase in operating
expenses in FY13 came primarily as a result ofincreasing staffing costs thatwere the result of
the implementation ofrecommendations from a newcompensation study. In FY12, The Florida
Barwasabletokeepexpensesdown byutilizingtechnologyoroutsourcingtodeliveritsproducts
andservicesmoreefficientlyandbydelayingsalaryadjustmentsandfiling ofvacantpositions.
The resources available to spend for the General Fund ofThe Florida Barwere approximately
$330,000 morethan budgetedforFY13and wereapproximately$1.9million lessthan budgeted
forFY12. Theseresultswereprimarilyattributabletotheactualgainsandlossesincurredbythe
GeneralFund'sshareofTheFloridaBar'sinvestmentincomewhichwasbudgetedat$1.4million
and experienced an actual gain of$1.8 million for FY13 and was budgeted at $1.9 million and
experienced a loss of $493,000 in FY12. The Florida Bar was able to keep expenses within
budgeted limitsin bothyears.
OverviewoftheFinancialStatements
This annual report consists of three parts - management's discussion and analysis, the basic
consolidated financial statements, and an optional section that presents supplementary
information. Thesupplementaryinformationincludesconsolidatingstatementsandcomparisonsof
actual results to budgeted results. The basic consolidated financial statements present the
consolidated financial position, results of operations, and cash flows ofthe Florida Bar and its
subsidiaries. The Florida Bar performs two overall activities which are to serve as the statewide
regulator of the practice of law and the professional association of lawyers. Its activities are
accounted foras aproprietarytype enterprisefund because itchargesfeesto provide itsservices
similartoabusinessenterprise.
Seethe IndependentAuditors'Report.
- 3-
The Florida Bar and Subsidiaries
Management's Discussion and Analysis
The Statement of Net Position includes all of The Florida Bar's assets and liabilities. The net
position is the difference between The Florida Bar's assets and liabilities. The Statement of
Revenues, Expenses, and Changes in Net Position include all of The Florida Bar's revenues and
expenses regardless of when the cash is received or paid. The change in net position is one way
to measure The Florida Bar's financial health or position. A Statement of Cash Flows provides
additional information regarding the change in The Florida Bar's cash position. The notes
(beginning on page 12) are an integral part in providing a full understanding of The Florida Bar's
'financial statements.
Summary of Operations and Condensed Consolidated Financial Information
CONDENSED CONSOLIDATED STATEMENTS OF NET POSITION
% Change % Change
June 30, 2013 2012 2011 2012 - 2013 2011 - 2012
Assets
Current and other assets $ 66,124,233 $ 61,931,808 $ 61,520,549 6.8% 0.7%
Capital assets, net 10,734,193 10,411,528 9,555,406 3.10/0 9.0%
Total assets 76,858,426 72,343,336 71,075,955 6.20/0
1.8%
Liabilities
Current liabilities 17,771,868 16,452,056 16,975,110 8.00/0 -3.1 %
Other liabilities 2,519,415 2,522,588 2,317,538 -0.10/0 8.8%
Total liabilities 20,291,283 18,974,644 19,292,648 6.9% -1.6%
Net position
Invested in capital assets,
net of related debt 10,734,193 10,411,528 9,555,406 3.1 % 9.0%
Restricted for scholarships 50,008 46,334 45,921 7.90/0 90.00/0
Unrestricted 45,782,942 42,910,830 42,181,980 6.70/0
1.7%
Total net position $ 56,567,143 $ 53,368,692 $ 51,783,307 6.00/0
3.1 %
The Florida Bar's cash and investments increased from $60.4 million in FY12 to $64.6 million in
FY13 despite a loss in the market value of the investment portfolio for FY13 of $104,437. This
increase reflects the addition of cash provided by operations of $3.1 million and the cash earnings
on the investment portfolio of $1.3 million. In comparison, cash and investments were virtually
unchanged from FY11 to FY12. Although The Florida Bar generated $2.7 million in cash from
investing activities in FY12, this was offset by a loss in the market value of the investment portfolio
of $2.0 million. The increase in capital assets from June 30, 2011 to June 30, 2013 has been a
function of the internal development of software programs as well as a capital improvement
program to remodel and refurbish The Florida Bar's headquarters building.
The primary liability of The Florida Bar is unearned revenue resulting from advance collection of
member fees and prepayments for Continuing Legal Education registrations. Unearned revenue
See the Independent Auditors' Report.
-4-
The FloridaBarandSubsidiaries
Management'sDiscussionandAnalysis
increased $1.4millionor13% from FY12to FY13. Thiswas primarilydueto operational changes
which resulted in earliercollections ofmemberfees. Unearned revenue was virtually unchanged
from FY11 toFY12at11.0million.
Formoredetailedinformation, seetheaccompanying ConsolidatedStatementsofNetPosition.
CONDENSEDCONSOLIDATEDSTATEMENTSOFREVENUES, EXPENSES
ANDCHANGESIN NETPOSITION
% Change 0/0 Change
June 30, 2013 2012 2011 2012- 2013 2011 - 2012
Operatingrevenues $ 42,708,054 $ 42,692,524 $ 42,477,814 0.0% 0.50/0
Operatingexpenses (42,032,019) (40,407,950) (40,982,582) 4.0% -1.40/0
Netoperatingincome 676,035 2,284,574 1,495,232 -70.40/0 52.80/0
Non-operatingrevenues 2,528,194 5,917,596 100.00/0 -100.00/0
Non-operati ngexpenses (5,778) (699,189) (58,178) -99.2% 1101.80/0
Netnon-operatingrevenues 2,522,416 (699,189) 5,859,418 -460.80/0 -111.9%
Changein netposition 3,198,451 1,585,385 7,354,650 101.70/0 -78.40/0
Netposition, beginning 53,368,692 51,783,307 44,428,657 3.10/0 16.60/0
Netposition, ending $ 56,567,143 $ 53,368,692 $ 51,783,307 6.00/0 3.10/0
The Florida Baroperated without an increase in Annual Fees to its members overthe pastthree
years. The increases in Annual Fees received by The Florida Bar have consistently been
approximately2% to3% peryearcommensuratewiththemembershipgrowthrate. Thisgrowthin
fees was offset by drops in other revenue sources such as court ordered restitutions and
advertisingrevenue.
Operatingexpensesincreased4% in FY13asaresultofincreasedstaffingcostsdirectlyrelatedto
the implementations of recommendations made in a newly completed compensation study. In
FY12, expenseswerekeptdown byvariousstepstaken byTheFlorida Barincluding (1)effortsto
transition away from print and mail to electronic communication and delivery of Continuing
Educationmaterialsandothercommunicationstomembers, (2)outsourcingoffunctionsthatcould
be done byoutsidevendors at lowercostthan continuing to dothosefunctions internally, and (3)
delaying salaryadjustmentsand hiring ofreplacements as employees retired orlefttheemployof
TheFloridaBar.
Seethe IndependentAuditors'Report.
-5-
The Florida Bar and Subsidiaries
Management's Discussion and Analysis
The increase in net assets for FY11 and FY13 was primarily attributable to the favorable
investment climate and for FY12, the cost saving measures described above.
For more detailed information, see the accompanying Consolidated Statements of Revenues,
Expenses, and Changes in Net Position.
Budgetary Highlights For the years ended June 30, 2013 and 2012, The Florida Bar's budget
funded most departments at a continuation level. The original operating budgets for the General
Fund (excluding the wholly-owned subsidiary and controlled entities) for the years ended June 30,
2013 and 2012 approved by the Florida Supreme Court, planned on an increase in net assets of
$2,291,818 and $2,287,461, respectively before transfers to other funds. After Board of Governor
amendments, the planned increase became $1,727,704 and $1,534,164 for FY13 and FY12,
respectively.
For FY13, significant budget amendments included the continuation of a public education program
to educate the general public about judicial merit retention, the addition of a leadership program,
assistance with e-filing requirements, and a contribution to the Florida Bar Foundation. For FY12,
significant budget amendments included an additional contribution to the Client Security Fund, the
start of a public education program to educate the general public about judicial merit retention,
moving a staff position from the Client Security Fund operations to the General Fund,
improvements for the Fort Lauderdale branch office, costs to update the Bar's webpage, and the
cost to add a paper shredding program to The Florida Bar's document destruction staff procedures.
Included in the supplemental information is an actual to budget comparison for each department for
FY13.
CAPITAL ASSETS
The Florida Bar invested the following in Capital Assets:
June 30,
Land
Building and improvements
Landscaping and parking
Equipment and furnishings
Software
Software in development
Construction in progress
Total, prior to depreciation and
amortization
2013
$ 1,306,690
11,349,427
120,318
4,831,457
4,431,345
280,310
11,220
22,330,767
2012
$ 1,306,690
11,352,944
120,318
4,802,272
2,433,713
1,113,841
18,615
21,148,393
2011
$ 1,306,690
10,728,573
120,318
4,684,035
1,680,573
817,692
14,683
19,352,564
% Change
2012-2013
0.0%
0.0%
0.0%
0.6%
82.1 %
-74.8%
-39.7%
5.6%
0/0 Change
2011 - 2012
0.0%
5.8%
O.ook
2.5%
44.8%
36.20/0
26.8%
9.3%
Accumulated depreciation
and amortization (11,596,574) (10,736,865) (9,797,158) 8.0% 9.60/0
Net capital assets $ 10,734,193 $ 10,411,528 $ 9,555,406 3.10/0
9.0%
See the Independent Auditors' Report.
-6-
The Florida Bar and Subsidiaries
Management's Discussion and Analysis
The Florida Bar underwent a significant refurbishment of the headquarters building in
Tallahassee in FY11 and FY12 which was funded through available cash. Additions to software
and software in development included costs of developing new programs or significantly
updating ones already in use. These included updates to The Florida Bar's website, a program
to track continuing education requirements and allow members to access their status on-line,
and updates to allow the public to use the Florida Bar's website to obtain a lawyer referral.
Presently, The Florida Bar has no plans to significantly alter its investment in capital assets
other than to continue to add to costs of developed software.
Future Financial Plan
The Florida Bar was created by the Supreme Court of Florida to assist the Supreme Court in
regulating the practice of law in Florida. The Florida Bar is primarily funded through required
annual fee payments by lawyers, sales of continuing education programs to lawyers, and other
fees for the regulation of attorneys or sales of legal related products and services. There is no
plan to materially change these revenue streams for the next two years. Accordingly, there are
no present plans to materially increase the scope or nature of the services provided to the
citizens of Florida and the lawyers authorized to serve them.
See the Independent Auditors' Report.
- 7 -
Financial Statements
The Florida Bar and Subsidiaries
Consolidated Statements of Net Position
June 30,
Assets
2013 2012
Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Prepaid expenses and other assets
Total current assets
$ 19,053,441
45,558,555
644,103
868,134
66,124,233
$ 17,958,410
42,469,481
512,481
991,436
61,931,808
Capital assets, net
Land
Buildings and improvements
Landscaping and parking
Equipment and furnishings
Software
Software development in progress
Construction in progress
Accumulated depreciation
Total capital assets, net
1,306,690
11,349,427
120,318
4,831,457
4,431,345
280,310
11,220
(11,596,574)
10,734,193
1,306,690
11,352,944
120,318
4,802,272
2,433,713
1,113,841
18,615
(10,736,865)
10,411,528
Total assets 76,858,426 72,343,336
Liabilities
Current liabilities
Accounts payable
Client Security Fund claims payable
Accrued expenses
Unearned revenues
Security deposits
Total current liabilities
1,742,490
2,068,347
1,215,887
12,696,218
48,926
17,771,868
1,770,767
2,242,075
1,176,897
11,213,395
48,922
16,452,056
Non-current liabilities
Compensated absences payable
Total non-current liabilities
2,519,415
2,519,415
2,522,588
2,522,588
Total liabilities 20,291,283 18,974,644
Net Position
Invested in capital assets, net of related debt
Restricted for scholarships
Unrestricted
Total net position
10,734,193
50,008
45,782,942
$ 56,567,143
10,411,528
46,334
42,910,830
$ 53,368,692
See accompanying notes to the consolidated financial statements.
- 8-
The Florida Bar and Subsidiaries
Consolidated Statements of Revenues, Expenses and Changes in Net Position
Years ended June 30,
Operating revenues
Annual fees
Other fees from members
Sales of products and services
Advertising
Young lawyers
Grants and other
Total operating revenues
Operating expenses
Regulation of the practice of law
Cost of products and services provided to members
Unauthorized practice of law
Public service programs
Communications with members and the public
Administration
Legislation
Young lawyers
Depreciation and amortization
Other programs and costs
Total operating expenses
Operating income
Non-operating revenues (expenses)
Investment earnings (loss)
Loss on disposal of capital assets
Total non-operating revenues (expenses)
Change in net position
Total net position, beginning of year
Total net position, end of year
2013 2012
$ 24,445,469
6,237,956
8,982,866
1,548,024
923,673
570,066
42,708,054
$ 23,754,161
6,269,655
8,884,912
1,599,039
874,708
1,310,049
42,692,524
17,187,556
9,965,784
1,693,759
2,999,561
3,967,555
2,334,370
469,839
747,365
1,191,505
1,474,725
42,032,019
16,466,262
9,580,546
1,506,205
3,282,089
3,801,242
2,361,492
437,330
798,120
1,029,784
1,144,880
40,407,950
676,035 2,284,574
2,528,194
(5,778)
2,522,416
(669,183)
(30,006)
(699,189)
3,198,451 1,585,385
53,368,692 51,783,307
$ 56,567,143 $ 53,368,692
See accompanying notes to the consolidated financial statements.
- 9-
The Florida Bar and Subsidiaries
Consolidated Statements of Cash Flows
Years ended June 30, 2013 2012
Cash flows from operating activities:
Receipts from members, customers and other sources $ 46,098,220 $ 46,653,755
Payments to employees, suppliers and other vendors (42,945,801) (44,077,708)
Net cash provided by operating activities 3,152,419 2,576,047
Cash flows from capital and related financing activities:
ACquisition of capital assets (1,496,508) (1,911,723)
Net cash (used in) capital and related financing activities (1,496,508) (1,911,723)
Cash flows from investing activities:
Redemption of investments 30,839,459 23,175,427
Purchase of investments (32,710,677) (21 ,226,436)
Investment income, net 1,310,338 842,733
Net cash (used in) provided by investing activities (560,880) 2,791,724
Increase in cash and cash equivalents: 1,095,031 3,456,048
Cash and cash equivalents, beginning of year 17,958,410 14,502,362
Cash and cash equivalents, end of year $ 19,053,441 $ 17,958,410
See accompanying notes to the consolidated financial statements.
- 10-
The Florida Bar and Subsidiaries
Consolidated Statements of Cash Flows (Continued)
Years ended June 30, 2013 2012
Reconciliation of operating income to net cash
provided by operating activities:
Operating income $ 676,035 $ 2,284,574
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization 1,191,505 1,029,784
(Increase) decrease in:
Accounts receivable, net (131,622) (17,637)
Prepaid expenses and other assets 123,302 (398,481 )
Increase (decrease) in:
Accounts payable 21,505
Claims payable (326,114)
Accrued expenses (60,585)
Unearned revenues (162,055)
Security deposits 6
Com ensated absenses a able 205,050
Net cash provided by operating activities 2,576,047
Non-cash investing, capital, and financing acitivities
Chan e in the fair value of investments
oss on disposal of assets
See accompanying notes to the consolidated financial statements.
- 11 -
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 1 - NATURE OF BUSINESS
The Florida Bar and Subsidiaries (The Florida Bar) is the statewide professional organization of
lawyers. It serves as an advocate and intermediary for attorneys, the court and the public. The
Florida Bar was established as a unified state bar by rule of the Supreme Court of Florida. The
Florida Bar regulates lawyers in Florida, investigates the unauthorized practice of law, offers
continuing legal education, publishes law journals and offers other member services.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
The Florida Bar is a unified state bar organized as an arm of the Supreme Court of the State of
Florida. It is considered a governmental entity because it was established by, and has the
potential to be dissolved by, the Supreme Court of Florida. Therefore, The Florida Bar adopted the
provisions of Statement No. 34 ("Statement No. 34") of the Governmental Accounting Standards
Board (GASB) "Basic Financial Statements - and Management's Discussion and Analysis - for
State and Local Governments,"as amended by Statement No. 37.
In evaluating The Florida Bar as a reporting entity, management has considered all potential
component units for which The Florida Bar may be financially accountable and if found to be
financially accountable, be required to be included in The Florida Bar's financial statements. The
Florida Bar is financially accountable if it appoints a voting majority of an organization's governing
board and (1) it is able to impose its will on an organization or (2) there is a potential for an
organization to provide specific financial benefit to or impose specific financial burden on The
Florida Bar. Additionally, The Florida Bar is required to consider other organizations for which the
nature and significance of their relationship with The Florida Bar are such that exclusion would
cause the reporting entity's financial statements to be misleading or incomplete. Management's
analysis has disclosed no component units that should be included in The Florida Bar's financial
statements.
Basis of Presentation
The Florida Bar is accounted for as a proprietary type enterprise fund. The Florida Bar applies all
applicable pronouncements of the Financial Accounting Standards Board (FASB) issued on or
before November 30, 1989 that are not in conflict with applicable GASB pronouncements.
Enterprise funds are used to account for activities that are financed and operated in a manner
similar to private business enterprises: (1) where the costs of providing goods and services to the
general public on a continuing basis are to be financed through user charges; or (2) where the
periodic determination of net income is considered appropriate. Proprietary funds distinguish
operating revenues and expenses from non-operating items. Operating revenues and expenses
generally result from providing goods and services in connection with a proprietary fund's ongoing
operations. Operating expenses for The Florida Bar include the costs of personnel, contractual
services, supplies, utilities, repairs and maintenance, and depreciation and amortization of capital
assets. All revenues and expenses not meeting this definition are reported as non-operating
revenues and expenses.
- 12 -
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis ofAccounting
Basis of accounting refers to when revenues and expenses are recognized in the accounts and
reported in the financial statements. These financial statements have been prepared on the
accrual basis of accounting in accordance with accounting principles generally accepted in the
United States of America. Under this method, revenues are recognized when they are earned and
expenses are recognized when they are incurred. The measurement focus of proprietary fund
types is on a flow of economic resources method, which emphasizes the determination of net
income, financial position, and cash flow. All fund assets and liabilities, current and non-current,
are accounted for in the Consolidated Statements of Net Assets.
Cash and Cash Equivalents
All demand deposit accounts and short-term highly liquid investments with original maturities of
three months or less are reported as cash equivalents.
Investments
Investments are reported at fair values. Fair values for securities traded on national or international
exchanges or over-the-counter are valued at quoted market prices. Fair values of securities not
traded on an exchange or over-the-counter are estimated based on the net asset values provided
by the investee calculated in accordance with FASB Topic 946.
Capital Assets
Capital assets are stated at cost less accumulated depreciation and amortization. The value of
software developed for The Florida Bar's use includes all direct and indirect costs that are related
to development activities. The costs of capital assets are depreciated or amortized over the
estimated useful lives of the related assets, ranging from 3 to 40 years, using the straight-line
method. When capital assets are retired or otherwise disposed of, the costs and related
accumulated depreciation or amortization are removed from the accounts and any resulting gain or
loss is reflected in the Consolidated Statements of Revenues, Expenses and Changes in Net
Position, in the period of disposal.
Claims Payable
The Florida Bar voluntarily created the Clients' Security Fund (the Fund) to provide possible
compensation to people who have suffered financial losses due to misappropriation of funds by
errant Florida Bar members. The Fund is financed by $25 of the annual fees due from each Florida
Bar member who is in good-standing (including inactive members). Claims payable represent
amounts that have been approved for payment from the Fund.
Unearned Revenues
Unearned revenues consist primarily of membership fees collected in advance, prepaid advertising
and prepaid legal education courses.
- 13 -
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Allocation of Expenses
The costs of providing the various programs, services, and other activities have been summarized
on a functional basis in the Consolidated Statement of Revenues, Expenses and Changes in Net
Position. Accordingly, certain costs have been allocated among the programs and supporting
services benefited.

The accompanying consolidated financial statements include the accounts of The Florida Bar and
its wholly-owned subsidiary, The Florida Bar Building Corporation, and its other controlled entities,
Florida Lawyers Association for the Maintenance of Excellence, Inc. and The Florida Attorneys
Charitable Trust. All significant intercompany transactions and accounts have been eliminated in
consolidation.
Income Taxes
The Florida Bar is an administrative agency of the Supreme Court of Florida and is not subject to
federal or state income tax. The Florida Bar Building Corporation, Florida Lawyers Association for
the Maintenance of Excellence, Inc. and The Florida Attorneys Charitable Trust have been granted
exemption from federal and state income taxes except on unrelated business income under
Sections 501 (c)(25), 501 (c)(6), and 501 (c)(3), respectively, of the Internal Revenue Code.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and
expenses dUring the reporting period. Actual results could differ from those estimates.
Concentration
The Florida Bar receives the majority of its revenue from lawyers licensed to practice in the State of
Florida.
Net Position
Net position is categorized as invested in capital assets, restricted for scholarships, and
undesignated. Invested in capital assets is intended to reflect the portion of net position that is
associated with non-liquid, capital assets. Restricted for scholarships consists of monies restricted
for the annual G. Kirk Haas fund scholarships. Undesignated assets consist of all other assets not
included in the previous categories.
Effective as of the start of the fiscal year ending June 30, 2013, The Florida Bar implemented
GASB 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources,
and Net Position which required a change in terminology. This change in accounting principal did
not result in a change in the amount of the beginning or ending net position.
- 14-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reclassifications
Certain expense categories for the year ended June 30, 2012 were reclassified to conform to the
current year presentation.
NOTE 3 - CASH AND CASH EQUIVALENTS
Cash and cash equivalents are subject to custodial credit risk. Custodial credit risk is the risk that
in the event of a bank or other counterparty failure, The Florida Bar's cash and cash equivalents
may not be returned. The Florida Bar's policy with respect to custodial credit risk is that The Florida
Bar will only maintain demand deposit accounts with financial institutions in which management
believes the risk to be limited because the financial institutions are large with strong financial
positions.
Cash and cash equivalents are held at three financial institutions. The cash held in demand
deposit accounts was $8,870,929 and additional cash and money market funds was $10,182,512
at June 30, 2013. Cash in the amount of $1,467,835 was insured by the Federal Deposit
Insurance Corporation (FDIC) as of June 30, 2013. The additional cash and money market funds
are held at a financial institution insured by the Securities Investor Protection Corporation (SIPC).
As of June 30, 2013, the SIPC provides up to $250,000 in coverage for uninvested cash and
money market funds not otherwise covered by the FDIC.
NOTE 4 - INVESTMENTS
Investment Objectives and Policies
Investments are made for the sole interest and exclusive purpose of providing investment
returns for The Florida Bar. The Florida Bar's investment objectives and policies are achieved
through a short-term account portfolio and a long-term account portfolio.
Investment guidelines for both portfolios are defined by written Investment Policies (the Policies)
approved by the Florida Bar's Board of Governors. The Policies establish diversified investment
strategies, both by types of investment and by manager, minimum credit qualities, and duration
limits. An Investment Committee has oversight, within Policy limits, to implement and direct the
investment strategies. The policies are reviewed at least annually for any adjustments required
due to changes or developments within the investment markets that may provide enhanced
investment and/or risk management opportunities, and recommendations for changes are
submitted for approval by the Board of Governors.
The purpose of the short-term portfolio is to provide for The Florida Bar's short-term working
capital needs. The short-term portfolio possesses a short-term time horizon (one to three years)
and within this horizon, the primary objectives are to preserve capital and provide liquidity for
short-term cash flow needs and to achieve attractive short-term yields consistent with
preservation of capital.
The purpose of the long-term investment portfolio is to provide for The Florida Bar's operating
needs and to fund The Florida Bar's programs both today and into the future. The long-term
- 15 -
TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE4- INVESTMENTS(CONTINUED)
Investment Objectives and Policies (Continued)
portfolio possesses an intermediateto long-term horizon (fiveto seven years)thatcorrelatesto
the primary objectives of providing long-term growth of capital and income. The secondary
objectivesarehighcurrentincomeand liquidity.
ThePoliciesrequirethe riskadjusted returnsofan investmentoverafull marketcycletorankin
the top 50% of universal comparisons with similar objectives and the investment should
outperformthetargetpolicyindex. ThePoliciesestablishassetallocationguidelineswith regard
toacceptable assetclasses and prohibited investments, the overall targeted assetmix, and the
representative indices for each asset class. The asset allocation guidelines as compared to
actual investmentbalanceswereasfollowsasofJune30, 2013:
Short-Term
Target Representative
AssetClasses Minimum Mix Maximum Actual Index
Short-Term Fixed income 35.00/0 50.00/0 65.0% 52.00/0 Barclay's 1-3YearGovernment/CreditBond Index
Cashand Equivalents 35.00/0 50.00/0 65.00/0 48.00/0 Citigroup U.S. gO-Day TreasuryBills Index
Long-Term
Target Representative
AssetClasses Minimum Mix Maximum Actual Index
U.S. LargeCapEquity 7.0% 12.0% 17.0% 11.0% Standard&Poor's500 Index
U.S. MidCapEquity 0.0% 4.0% 9.0% 4.0% Russell Mid CapIndex
U.S. SmallCapEquity 0.0% 2.0% 7.0% 2.0% Russell2000 Index
International Equity 10.0% 15.0% 20.0% 15.0% MSCI EAFE Index
MSCI EAFESmallCapIndexorMSCI EAFESmall/MidCap
Int'lSmall/Mid CapEquity 0.0% 2.0% 7.0% 2.0% Index
EmergingMarketsEquity 5.0% 10.0% 15.0% 9.0% MSCI Emerging Marketsndex
Commodities 1.0% 6.0% 11.0% 6.0% DowJonesUBSCommodityIndex
REITs 0.0% 3.0% 8.0% 3.0% NAREITEquityIndexorDowJonesGlobalSelectREIT
Inflation-linkedSecurities 0.0% 2.0% 7.0% 0.0% BarclaysCapital U.S.TIPS Index
EmergingMarket Fixed JPMorganEmergingMarketsBond IndexorJPMorgan
Income 0.0% 2.0% 7.0% 2.0% EmergingMarketBond Index(unhedged)
U.S. Fixed Income 15.0% 22.0% 29.0% 26.0% Barclay'sCapital IntermediateGov'tlCreditBond Index
U.S. HighYield Fixed
Income 0.0% 4.0% 9.0% 2.0% Barclay'sCapitalU.S.CorporateHighYield Index
HFRI ConservativeIndexorHedgeFundofFundsComposite
Hedged Funds 0.0% 6.0% 9.0% 6.0% Index
I LiquidAlternatives 0.0% 3.0% 6.0% 2.0% 60%MSCI ACWI/40%BarclaysCapitalGlobalAggregate
I ManagedFutures 0.0% 2.0% 5.0% 3.0% Barclay'sCTAIndex
iCash&Equivalents 0.0% 5.0% 10.0% 7.0% CitigroupU.S.90-DayTreasuryBills
Performanceand compliance reportsaresubmittedtothe InvestmentCommitteequarterly. The
Florida Bar employs an investment consultant who provides performance and compliance
reporting atboththeportfolioleveland byindividual investmentmanager.
- 16-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 4 - INVESTMENTS (CONTINUED)
Investments
At June 30, The Florida Bar's investment balances were as follows:
June 30,
US Treasuries
Federal Agencies
Municipal Bonds
Corporate Bonds & Other Fixed Income
Mutual Funds - debt securities (ST)
Mutual Funds - equity securities
Mutual Funds - commodities
Equities
Managed Futures
Liquid Alternatives
Hedge Funds
Total investments
$
$
2013
501,769
3,706,223
800,667
4,486,676
12,396,453
1,166,462
2,187,847
16,025,654
787,864
1,142,260
2,356,680
45,558,555
$
$
2012
2,927,340
3,067,484
864,039
2,936,091
12,146,414
1,599,645
797,629
13,762,452
2,183,150
2,185,237
42,469,481
The Florida Bar's investment securities are exposed to various risks, such as custodial credit
risk, interest rate risk, credit quality risk, foreign currency risk, concentration of credit risk, and
market conditions. Due to the level of risk associated with certain investment securities, it is at
least reasonably possible that changes in the value of investment securities will occur in the
near term and those changes could materially affect investment balances.
Custodial Credit Risk
Custodial credit risk is the risk that in the event of the failure of the custodial entity, The Florida
Bar's deposits may not be returned to it. The Policies state that The Florida Bar will only hold
investment securities that are insured or registered and held by The Florida Bar, or its
designated agent, in the name of The Florida Bar. Investments held through its agent, Morgan
Stanley Smith Barney, LLC have Securities Investor Protection Corporation (SIPC) coverage up
to $500,000 per customer for cash and securities as of June 30, 2013 of which $250,000 may
ibe in uninvested cash. Morgan Stanley Smith Barney, LLC also has purchased "Excess SIPC"
!protection above the SIPC limits. This excess coverage is subject to a firmwide cap for Morgan
iStanley of $1 billion with no per-client limit for securities and a $1.9 million per-client limit for the
lcash portion of any remaining shortfall. Investments in PIMCO mutual funds are held by a third
'party trust company.
/nterest Rate Risk
Iinterest rate risk arises from investments in debt instruments and is defined as the risk that
!changes in interest rates will adversely affect the fair value of an investment. The Florida Bar's
linvestments in U.S. Treasuries, federal agencies, municipal bonds, corporate bonds, and other
!bonds are directly subject to interest rate risk. The interest rate risk is managed by requiring the
Iduration of the fixed income portfolio to average between plus or minus 20% of the duration of
Ithe representative benchmark for the investment.
- 17 -
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 4 - INVESTMENTS (CONTINUED)
Interest Rate Risk (Continued)
As of June 30, 2013, The Florida Bar's debt investments had the following maturities:
Investment Maturities (In Years)
Less than 1
June 30, Fair Value Year 1 5 Years 5 10 Years Over 10 Years
US Treasuries $ 501,769 $ - $ - $ 501,769 $
Federal Agencies 3,706,224 67,999 836,239 530,192 2,271,794
Municipal Bonds 800,667 139,214 263,836 327,178 70,439
Corporate Bonds &Other Fixed
Income 4,486,676 76,786 1,950,526 1,090,800 1,368,564
Total investments $ 9,495,336 $ 283,999 $ 3,050,601 $ 2,449,939 $ 3,710,797
The Florida Bar is not directly subject to interest rate risk for its investment in mutual funds that
purchase debt instruments, as The Florida Bar is able to sell their interest in these mutual funds
at will (subject to potential redemption fees). At June 30, 2013, the weighted average life
reported by the mutual fund managers for the mutual funds invested in debt instruments was
3.46 to 7.15 years.
Credit Quality Risk
The Policies require investments in fixed income debt securities to meet an average quality
rating of A or higher for the long-term portfolio and AA or higher for the short-term portfolio by
either Standard & Poor's, Moody's or Fitch Investors Service at the time of purchase.
Investments in corporate holdings must be rated investment grade or better by either Standard
& Poor's, Moody's or Fitch Investors Service at the time of purchase. In the event a bond's
credit rating is downgraded to a level below investment grade by two of the three ratings
agencies, the Investment Manager must notify the Investment Committee and provide the
Committee with the Manager's outlook on the investment. The Investment Committee must
approve continuing to hold the downgraded investment. The Manager must regularly update the
committee on the downgraded investment's status.
- 18 -
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 4 - INVESTMENTS (CONTINUED)
Credit Quality Risk (continued)
The Florida Bar's debt investments by rating at June 30, 2013 are presented below:
Quality Rating
U.S. Government
Agencies
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Below Investment
Grade
Unrated
U.S. Federal
Treasuries Agencies
$ - $ 3,706,224
501,769
Municipal
Bonds
$ 478,660
1,517,755
88,150
122,261
102,529
173,861
656,056
421,788
505,304
420,312
Corporate
Bonds & Mutual Funds -
Other Fixed Debt
Income Securities
$ - $ - $
275,446
282,122
160,406
57,324
25,369
12,396,453
Total
4,184,884
2,294,970
370,272
282,667
159,853
173,861
656,056
447,157
505,304
420,312
12,396,453
Total investments
$ 501,769 $ 3,706,224 $ 4,486,676 $ 800,667 $ 12,396,453 $ 21,891,789
Because mutual funds are listed and valued as a whole, not individual holdings, information
about specific ratings cannot be obtained however the mutual funds do have exposure to non-
ilnvestment grade securities. Investments in mutual funds are with the understanding that the
ilnvestment policies stated in the mutual fund's prospectus supersedes the guidelines
by The Florida Bar.
Foreign Currency Risk
Iinvestments in international equity securities are limited to SEC-Registered, U.S. exchange
Ilisted, U.S. dollar-denominated securities in foreign domiciled issuers. Investments in
ilnternational debt securities are limited to SEC-registered, U.S. dollar-denominated, U.S.
backed securities issued by foreign governments. The Florida Bar invests in
international securities through American Depository Receipts (ADRs). ADRs represent
in shares of foreign companies traded on the U.S. financial markets and are
in U.S. dollars and, thus, are not exposed to foreign currency risk. Investments in
currency-denominated government bonds, any type of foreign corporate bond, or any
- 19-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 4 - INVESTMENTS (CONTINUED)
Foreign Currency Risk (continued)
other type of foreign currency are not allowed. Securities of foreign companies traded on
foreign stock exchanges may be purchased only with the written permission of The Florida Bar's
!Investment Committee. Additionally, the investment policies approve the use of mutual funds,
which may include foreign securities, with the understanding that the investment policies stated
lin the mutual fund's prospectus supersede the guidelines set forth in The Florida Bar's
investment policy.
'Concentration of Credit Risk
The Investment Policies require investments to be diversified such that there is not an undue
concentration in a single industry sector except for its Concentrated Portfolios. Investments in
equity securities are subject to a maximum 5% commitment at cost and 10
%
weighting at
market of the account's total market value for any individual security or single issuer.
Investments in fixed income securities are subject to no more than 5% of the account's market
value invested in a single issue (at cost) or in direct obligations of a single issuer (at market)
with the exception of the U.S. Government and its agencies so long as any such government or
agency issue shall be backed with the full faith and credit of the U.S. Government. In addition,
no more than 15k of the fixed income securities may be invested in mortgage backed or asset
backed securities of a single issuer, with the exception of those issued by the U.S. Government,
its agencies, or its sponsored agencies.
Investments in cash and cash equivalents are limited to no more than 10
%
of the account's
market value in a single issue (at cost), with the exception of issues backed by the U.S.
Government and its agencies and diversified money market funds.
Derivative Instruments
As of June 30, 2013, the Florida Bar's investment policy states that investments in options,
derivatives and 'financial futures are prohibited in separately managed accounts other than its
Alternative Investment assets. Additionally, the investment policy approves the use of mutual
funds, which may include derivative instruments, with the understanding that the investment
policies stated in the mutual fund's prospectus supersede the guidelines set forth in The Florida
Bar's investment policy.
NOTE 5 - ACCOUNTS RECEIVABLE, NET
jrhe following is a summary of accounts receivable, net:
I
I
!June 30, 2013 2012
IAccounts receivable $ 659,103 $ 537,381
IAliowance for doubtful accounts (15,000) (24,900)
I
Accounts receivable, net $ 644,103 $ 512,481
- 20-
TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
,NOTE 6- CAPITALASSETS, NET
!, Capitalassets notbeing depreciatedor
amortized:
July1,2012 Additions Deletions Transfers June30, 2013
Land
Softwaredevelopmentin progress
Constructionin progress
$ 1,306,690
1,113,841
18,615
$ -
785,799
$ - $ - $ 1,306,690
- (1,619,330) 280,310
(7,395) 11,220
Total capitalassetsnotdepreciatedoramortized 2,439,146 785,799 (7,395) (1,619,330) 1,598,220
Capitalassets beingdepreciatedoramortized:
Buildingsand improvements
Landscapingand parking
Equipmentand furnishings
Software
Total capitalassets being depreciatedor
amortized
11,352,944
120,318
4,802,272
2,433,713
18,709,247
1,515
365,976
378,302
745,793
(5,032)
(336,791)
(341,823)
1,619,330
1,619,330
11,349,427
120,318
4,831,457
4,431,345
20,732,547
Lessaccumulateddepreciationoramortization
for:
Buildingsand improvements
Landscapingand parking
Equipmentand furnishings
Software
(6,191,442)
(120,318)
(3,610,119)
(814,986)
(385,083)
(383,974)
(422,448)
331,796
(6,576,525)
(120,318)
(3,662,297)
(1,237,434)
Totalaccumulateddepreciationor
amortization (10,736,865) (1,191,505) 331,796 (11,596,574)
,Totalcapitalassets beingdepreciatedor
amortized, net 7,972,382 (445,712) (10,027) 1,619,330 9,135,973
iTota'capitalassets, net $10,411,528 $ 340,087 $ (17,422) $ - $ 10,734,193
Depreciation and amortization expense for the years ended June 30, 2013 and 2012 was
$1,191,505and 1,029,784, respectively.
- 21 -
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 7 - LONG-TERM LIABILITIES
Compensated Absences Payable
Compensated absences payable consisted of the following:
June 30,
Accrued vacation
Accrued sick leave
Total compensated absences
$
$
2013
1,476,155
1,043,260
2,519,415
$
$
2012
1,439,898
1,082,690
2,522,588
Changes in Long-Term Liabilities
Changes in long-term liabilities are summarized as follows:
Accrued vacation
Accrued sick leave
Total long-term liabilities
Balance
July 1, 2012
$ 1,439,898
1,082,690
$ 2,522,588
Additions
$ 1,111,311
230,839
$ 1,342,150
Reductions
$ (1,075,054)
(270,269)
$ (1,345,323)
Balance
June 30, 2013
$ 1,476,155
1,043,260
$ 2,519,415
NOTE 8 - REVENUE AND EXPENSE CLASSIFICATION
The significant revenue and expense accounts presented in the consolidated financial
statements are described as follows:
Other Fees from Members
Includes revenues from members other than annual fees such as advertising approval fees,
certification fees and section dues.
Sales of Products and Services
Includes revenues from sources such as Continuing Legal Education (CLE) registrations, sales
Of publications and meeting revenues.
Grants and Other
Includes grants received from The Florida Bar Foundation, cost recoveries from discipline
fases, rents received in The Bar Center Building Fund and other sources of revenue.
of the Practice of Law
Iinciudes expenses incurred for Lawyer Regulation, Lawyer Advertising, Ethics, Continuing Legal
Rules (CLER), Membership Records and Certification.
- 22-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
iNOTE 8 - REVENUE AND EXPENSE CLASSIFICATION (CONTINUED)
Cost of Products and Services Provided to Members
Iinciudes expenses such as the cost of CLE courses and publications, Legal Office Management
Advisory Services (LOMAS), voluntary member assistance programs, meetings, committee
activity and section activity.
!Communication with Members and the Public
'iinciudes the expenses of the Public Information Department and The Florida Bar Journal and
News.
Administration
board and officer expenses, the cost of the Executive Director's office, General
Counsel, Research, Planning and Evaluation, and liability and property insurance.
NOTE 9 - RETIREMENT PLANS
jrhe Florida Bar sponsors a defined contribution pension plan, The Florida Bar Employees'
pension Plan (the Plan), which is available to all salaried personnel having completed six
months of service. The Plan is administered by The Florida Bar Retirement Committee. The
plan may be amended at any time by The Florida Bar. Employer contributions are discretionary
and are currently made for all eligible employees employed on December 31 based on a
formula which was 15% of covered compensation for the years ended June 30,2013 and 2012,
tespectively, and 4.3% on covered compensation exceeding 80% of the Social Security wage
The employer contributions are allocated to separate participant accounts and invested
the Trustee in the funds selected by the employee from those offered by the Plan
Administrator. Participant accounts vest based on the following schedule:
Less than 3 years
0%
3 - 4 years
40%
4 - 5 years
60%
5 - 6 years
80%
Greater than 6 years 100
%
forfeited contributions are held in a separate account and are used to reduce 'future employer
contributions. The plan has been amended to comply with all applicable Federal tax laws. The
contribution made equaled the contribution required during the years ended June 30,
013 and 2012 for the Plan years ended December 31,2012 and 2011 and was $2,185,851
nd $2, 128, 115, respectively.

the Florida Bar also has a deferred compensation plan. The plan is for the benefit of all eligible
employees who elect to participate.
- 23-
I
The FloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
iNOTE 10- RETIREEPOSTEMPLOYMENTHEALTHBENEFITS
',Plan Description. The Florida Bar Retiree Health Plan (TFBRHP) is a single-employerdefined
benefit healthcare plan administered by The Florida Bar. TFBRHP provides health insurance
I,benefits to eligible employees at early retirement, disability orfull retirement. The Florida Bar
has the authority to establish and amend benefit provisions ofTFBRHP. TFBRHP issues a
stand-alonefinancial reportthatincludesthefinancial statementsand required disclosures.
This report may be obtained by writing to The Florida Bar, 651 East Jefferson Street,
Tallahassee, Florida32399-2300.
Funding Policy. TFBRHP is funded through contributions made by The Florida Bar. The
pontribution requirements are established and may be amended by The Florida Bar. Currently,
are no required contributions by active or retired employees. The required contribution
from theFlorida Baris basedonan actuariallydeterminedpercentageoftotalactivepayroll. For
fiscal years ended June 30,2013and 2012, The Florida Barcontributed $90,190 and $87,777,
respectively, to the plan forthe annual required contributions. The Florida Bar contributed an
tadditional $173,283forthe yearended June 30, 2012 to coverthe unfunded liabilitycalculated
atJanuary1, 2012.
ttnnual OPEB Cost and Net OPEB Obligation. The Florida Bar's annual otherpostemployment
(OPEB) cost (expense) is calculated based on the annual required contribution of the
(ARC), an amountactuariallydetermined in accordancewith the parametersofGASB
Statement 45. The ARC represents a level offunding that, if paid on an ongoing basis, is
to cover normal costs each year and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years. Based on the January 1, 2012,
actuarial valuation, the ARC is .62% of active payroll payable for the calendar years 2012
through 2013. The following table shows the components ofThe Florida Bar's annual OPEB
costforthe year, theamountactuallycontributed tothe plan, and changes in The Florida Bar's
hetOPEBobligationtoTFBRHP:
IAnnualrequired contribution $ 90,190
Iintereston netOPEBobligation
IAd'ustmentstoannual re uiredcontribution
Annual OPEBcost ex ense $ 90,190
INetOPESobligation- July1,2012 $
I,Annual OPEScost(expense)for2013 (90,190)
Contributionsmadedurin FY2013 90,190
NetOPESobligation- June30,2013 $
- 24-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
:NOTE 10 - RETIREE POSTEMPLOYMENT HEALTH BENEFITS (CONTINUED)
'The Florida Bar's annual OPEB cost, the percentage of annual OPEB cost contributed to the
lplan, and the net OPEB obligation for 2013 and the preceding three years were as follows:
Annual Percentage of Annual OPES Cost Net OPES
Fiscal Year Ended OPES Cost Contribtued Obligation
6/30/2010 $ 268,980 100% $
6/30/2011 85,511 1000/0
6/30/2012 87,777 100%
6/30/2013 90,190 1000/0
Funded Status and Funding Progress. As of January 1, 2012, the most recent actuarial
date, the plan was 91 % funded. The actuarial accrued liability for benefits was
palculated to be $1,886,227 and the actuarial value of the assets was $1,712,944, resulting in a
runding deficit of $173,283. The covered payroll (annual payroll of active employees covered by
the plan) was $14,402,420, and the ratio of the unfunded actuarial accrued liability (UAAL) to
the covered payroll was 1.20%. This deficit was funded by the Florida Bar prior to June 30,
2012.
valuations of an ongoing plan involve estimates of the value of reported amounts and
about the probability of occurrence of events far into the future. Examples include
about future employment, mortality, and the healthcare cost trend. Amounts
regarding the funded status of the plan and the annual required contributions of the
employer are subject to continual revision as actual results are compared with past expectations
and new estimates are made about the future.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are
pased on the substantive plan (the plan as understood by the employer and the plan members)
include the types of benefits provided at the time of each valuation and the historical pattern
bf sharing of benefit costs between the employer and plan members to that point. The actuarial
methods and assumptions used include techniques that are designed to reduce the effects of
short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent
with the long-term perspective of the calculations.
The projected unit credit actuarial cost method was used for the January 1, 2012 actuarial
valuation. The actuarial assumptions included a 7.50/0 investment rate of return, which is the rate
of the expected long-term investment returns on plan assets and an annual healthcare cost
rend rate of 9.5% initially, reduced by decrements to an ultimate rate of 5.0% in the year 2018
nd beyond. Both rates included a 3.0% inflation assumption. TFBRHP holds plan assets in
rust solely to provide benefits to retirees and their beneficiaries. The UAAL is being amortized
s a level percentage of projected payroll on a closed basis. The remaining amortization period
t January 1, 2012 was 30 years.
- 25-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
'INOTE 10 - RETIREE POSTEMPLOYMENT HEALTH BENEFITS (CONTINUED)
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Funding Progress
Actuarial
Accrued
Liability UAAL as a
Actuarial (AAL)- Unfunded Percentage
Actuarial Value Projected AAL Funded Covered of Covered
Valuation of Assets Unit Credit (UAAL) Ratio Payroll Payroll
Date (a) (b) (b - a) (alb) (c) (b - a) I c)
1/1/06 $ - $ 1,203,784 $ 1,203,784 0.00% $ 12,946,872 9.30%
1/1/08 1,288,476 1,216,209 (72,267) 105.94% 14,296,752 -0.51 %
1/1/10 1,293,906 1,584,797 290,891 81.64% 14,557,008 2.00%
1/1/12 1,712,944 1,886,227 173,283 90.81% 14,402,420 1.20%
NOTE 11 - LEASES
rhe Florida Bar is the lessee of office space under operating leases expiring in various years
through the year 2018, with escalation clauses.
\fhe Florida Bar also leases office space from its wholly-owned subsidiary, The Florida Bar
Corporation. The intercompany rental income and rental expense have been eliminated
'n consolidation.
future minimum rental payments to unrelated entities are as follows:
I
I Years ending June 30, Amount
12014 $ 737,079
2015 760,227
1
12016 711,048
:2017 623,524
'1
2018 197,623
Total minimum future rental payments $ 3,029,501
total rental expense for the fiscal year ended June 30, 2013 and 2012 was $714,702 and
742, respectively.
I
Florida Bar is also the lessor of certain office space in a building owned by The Florida Bar.
he space is rented to unrelated entities under operating leases expiring in various years
hrough the year 2018. Rental income for the fiscal years ended June 30, 2013 and 2012 was
293,818 and $286,784, respectively.
I
- 26-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
I!NOTE 11 - LEASES (CONTINUED)
IFuture minimum rental receipts are as follows:
I Years ending June 30,
2014
2015
2016
2017
2018
! Thereafter
Total minimum future rental receipts
$
$
Amount
295,576
295,576
295,576
295,576
295,576
73,894
1,551,774
NOTE 12 - CONTINGENCIES
Florida Bar is involved in several actions as defendant and/or co-defendant. The majority
pf the actions are expected to be settled with little or no financial impact to The Florida Bar. An
ccurate assessment of any significant liability is not determinable although management of The
t
lorida Bar believes that the possibility of any significant liability arising from current litigation is
i xtremely remote.
NOTE 13 - COMMITMENTS
\fhe Florida Bar has contracted with various hotels or convention centers to reserve facilities,
tooms, and food and beverage services for various meetings and seminars to be held through
fiscal year 2020. If The Florida Bar should choose to cancel the contracts, liquidating damages
Would be due to the hotels or convention centers. Generally, liquidating damages are
raduated based on the time between cancellation and the scheduled arrival date of the

eeting and are calculated based on a percentage of anticipated revenues by the particular
otel or convention center.
I
I
the following is a schedule of estimated liquidating damages that The Florida Bar would incur
they cancel all the contracts as of June 30, 2013:
Estimated
liquidating
Event damages
IAnnual Meeting $ 1,029,859
i
of Governors Meetings 154,242
inter Meeting 159,214

Section Meetings 797,129


Continuin Le al Education Seminars and Other Meetin s 153,440
otal commitment $ 2,293,884
- 27-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 14 - DESIGNATED NET POSITION
'The Florida Bar has designated certain components of net position to be used for specific
program purposes. As of June 30, 2013 and 2012, the designated components of net position
were $17,227,035 and $15,818,367, respectively.
iNOTE 15 - RISK MANAGEMENT PROGRAMS
The Florida Bar is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
Workers' compensation, property, and general liability coverage are provided through
commercial insurance carriers. Management continuously reviews the limits of coverage and
believes that current coverage is adequate. There were no significant reductions in insurance
coverage from the previous year.
- 28-
Supplementary Information
The Florida Bar and Subsidiaries
Consolidating Statement of Net Position
Clients'
General Bar Center Security Certification Sections Eliminating Total
June 30, 2013 Fund Fund Fund Fund Fund Entries All Funds
Assets
Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Due from other funds
Prepaid expenses and other assets
Total current assets
$ 17,585,842
45,558,555
644,103
-
892,443
64,680,943
$ 1,467,599 $ - $ - $ - $
6,359,386 6,495,701 1,043,167 5,065,300 (18,963,554)
808 _ _ _ ----=- _ _ _ _ -=- -_ _ _ (5,j 17)
7,827,793 6,495,701 1,043,167 5,065,300 (18,988,671)
$ 19,053,441
45,558,555
644,103
868,134
66,124,233
Capital assets, net
Land
Buildings and improvements
Landscaping and parking
Equipment and furnishings
Software
Software development in process
Construction in progress
Accumulated depreciation
and amortization
Total capital assets, net 3,475,005
(1,236,650)
4,431,345
280,310
7,259,188 - - - -
(10,359,924) - - - -
1,306,690
11,349,427
120,318
4,831,457
11,220
10,734,193
(11,596,574)
1,306,690
11,349,427
120,318
4,831,457
4,431,345
280,310
11,220
Restricted assets
Investment in The Florida Bar
Building Corporation
Total restricted assets
1,611,647
1,611,647
- _ _ __ - -__ - (1 6 1 ~ 6 ~ 7
- - - - (1,611,647)
Total assets 69,767,595 15,086,981 6,495,701 1,043,167 5,065,300 (20,600,318) 76,858,426
See Independent Auditors' Report.
- 29-
The Florida Bar and Subsidiaries
Consolidating Statement of Net Position
(Continued)
Clients'
General Bar Center Security Certification Sections Eliminating Total
June 30, 2013 Fund Fund Fund Fund Fund Entries All Funds
Liabilities
Total current liabilities
Current liabilities
Accounts payable
Client security fund claims payable
Accrued expenses
Due to other funds
Unearned revenues
Security deposits
34,590,558
3,109,456
-
1,264,813
17,470,071
12,746,218
-
151,634
77,591
-
-
-
-
74,043
2,068,347
-
2,068,347
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(19,038,671)
(1,444,557)
(48,926)
(17,470,071)
(50,000)
(25,117)
1,742,490
2,068,347
1,215,887
12,696,218
48,926
17,771,868
Total non-current liablities
Non-current liabilities
Compensated absences payable
2,519,415
2,519,415 2,519,415
2,519,415
Total liabilities 37,109,973 151,634 2,068,347 (19,038,671 ) 20,291,283
Net position
Invested in capital assets, net of related debt 3,475,005 7,259,188 10,734,193
Restricted for scholarships 50,008 50,008
Unrestricted
Designated 626,702 6,064,512 4,427,354 1,043,167 5,065,300 17,227,035
Undesignated 28,505,907 - - - - 50,000 28,555,907
Contributed capital - 1,611,647 - - - (1,611,647)
Total net position $ 32,657,622 $14,935,347 $ 4,427,354 $ 1,043,167 $ 5,065,300 $ (1,561,647) $ 56,567,143
See Independent Auditors' Report.
- 30-
The Florida Bar and Subsidiaries
Consolidating Statement of Revenues, Expenses and Changes in Net Position
Clients'
General Bar Center Security Certification Sections Eliminating Total
Year ended June 30,2013 Fund Fund Fund Fund Fund Entries All Funds
Operating revenues
Annual fees
Other fees from members
Sales of products and services
Advertising
Young lawyers
Grants and other
Total operating revenues
$ 24,445,469
3,681,994
6,754,157
1,548,024
923,673
189,884
37,543,201
$ -
-
-
1,119,144
1,119,144
$ -
-
-
86,364
86,364
$ -
1,311,519
7,875
-
1,319,394
$ -
1,244,443
2,263,334
-
3,507,777
$
(42,500)
(825,326)
(867,826)
$ 24,445,469
6,237,956
8,982,866
1,548,024
923,673
570,066
42,708,054
Total operating expenses
Operating expenses
Regulation of the practice of law
Cost of products and services provided to members
Unauthorized practice of law
Public service programs
Communication with members and the public
Administration
Legislation
Young lawyers
Depreciation and amortization
Other programs and costs
34,248,206
16,391,719
6,404,653
1,736,089
516,611
4,066,711
2,392,710
481,581
848,042
399,008
1,011,082
1,269,355
769,057
500,298
2,499,930
2,495,545
4,385
-
1,214,562
1,195,507
19,055
-
3,717,792
3,717,792
-
(917,826)
(399,670)
(156,661)
(42,330)
(12,595)
(99,156)
(58,340)
(11,742)
(100,677)
(36,655)
42,032,019
17,187,556
9,965,784
1,693,759
2,999,561
3,967,555
2,334,370
469,839
747,365
1,191,505
1,474,725
Operating income (loss) 3,294,995 (150,211) (2,413,566) 104,832 (210,015) 50,000 676,035
Non-operating revenues (expenses)
Investment earnings
Loss on disposal of capital assets
Total non-operating revenues (expenses)
1,812,071
-
1,812,071
256,699
(5,778)
250,921
184,696
-
184,696
35,456
-
35,456
239,272
-
239,272
-
-
-
2,528,194
(5,778)
2,522,416
Change in net position 5,107,066 100,710 (2,228,870) 140,288 29,257 50,000 3,198,451
Net position, beginning of year 30,443,146 14,222,947 4,375,324 902,879 5,036,043 (1,611,647) 53,368,692
Transfers (to) from other funds (2,892,590) 611,690 2,280,900
Net position, end of year $ 32,657,622 $ 14,935,347 $ 4,427,354 $ 1,043,167 $ 5,065,300 $ (1,561,647) $ 56,567,143
See Independent Auditors' Report.
- 31 -
The Florida Bar and Subsidiaries
Consolidating Statement of Cash Flows
Clients'
General Bar Center Security Certification Sections Eliminating Total
Year ended June 30, 2013 Fund Fund Fund Fund Fund Entries All Funds
Cash flows from operating activities:
Receipts from members, customers and other sources
Payments to employees, suppliers and other vendors
Net cash provided by (used in) operating activities
$ 38,944,402
(35,745,921)
3,198,481
$ 877,209
(463,847)
413,362
$ 2,367,264
(2,551,960)
(184,696)
$ 1,319,394
(1,354,850)
(35,456)
$ 3,507,777
(3,747,049)
(239,272)
$ (917,826)
917,826
-
$ 46,098,220
(42,945,801)
3,152,419
Cash flows from capital and related financing activities:
Acquisition of capital assets
Net cash (used in) capital and related financing activities
(1,134,050)
(1,134,050)
(362,458)
(362,458)
-
-
-
-
-
-
-
-
(1,496,508)
(1,496,508)
Cash flows from investing activities:
Redemption of investments
Purchase of investments
Investment income, net
Net cash (used in) provided by investing activities
30,839,459
(32,710,677)
594,215
(1,277,003)
-
-
256,699
256,699
-
-
184,696
184,696
-
-
35,456
35,456
-
-
239,272
239,272
-
-
-
-
30,839,459
(32,710,677)
1,310,338
(560,880)
Increase in cash and cash equivalents 787,428 307,603 1,095,031
Cash and cash equivalents, beginning of year 16,798,414 1,159,996 17,958,410
Cash and cash equivalents, end of year $17,585,842 $ 1,467,599 $ $ $ $ $ 19,053,441
See Independent Auditors' Report.
- 32-
The Florida Bar and Subsidiaries
Consolidating Statement of Cash Flows
(Continued)
Year ended June 30, 2013
General
Fund
Bar Center
Fund
Clients'
Security
Fund
Certification
Fund
Sections
Fund
Eliminating
Entries
Total
All Funds
Reconciliation of operating income (loss) to net cash provided
by operating activities:
Operating income (loss) $ 3,294,995 $ (150,211 ) $ (2,413,566) $ 104,832 $ (210,015) $ 50,000 $ 676,035
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities
Depreciation and amortization 399,008 769,057 4,385 19,055 1,191,505
Transfers (to) from other funds (2,892,590) 611,690 2,280,900
(Increase) decrease in:
Accounts receivable, net (131,622) (131,622)
Due from other funds (853,625) 117,313 (159,343) (29,257) 924,912
CSF recovery receivable
Prepaid expense and other assets 123,363 (61) 123,302
Increase (decrease) in:
Accounts payable (4,655) 36,508 (83,570) (51,717)
Claims payable (173,728) (173,728)
Accrued expenses 38,994 (4) 38,990
Unearned revenues 1,532,823 (50,000) 1,482,823
Security deposits - 4 4
Due to other funds 841,338 - - - - (841,338)
Compensated absences payable (3,173) - - - - - (3,173)
Net cash provided by (used in) operating activities $ 3,198,481 $ 413,362 $ (184,696) $ (35,456) $ (239,272) $ - $ 3,152,419
See Independent Auditors' Report.
- 33-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Actual Budgeted (Unfavorable)
Rev nues - budgetary basis
An ual fees $ 24,445,469 $ 24,440,633 $ 4,836
Inv stments 1,812,049 1,400,000 412,049
Au horized house counsel 364,080 279,400 84,680
La er regulation 627,003 780,940 (153,937)
Flo ida registered paralegal program 822,995 990,055 (167,060)
Pr fessional enhancement program 76,451 116,750 (40,299)
Un icensed practice of law 4,747 3,035 1,712
Et ics 556 275 281
La er advertising 514,087 578,500 (64,413)
Pr fessionalism 19,262 24,024 (4,762)
Mu tijurisdictional practice 547,275 505,645 41,630
Me tings and conventions 544,076 527,410 16,666
Ad ressing services 355 355
Co tinuing legal education program 3,173,345 3,189,377 (16,032)
Co tinuing legal education rule 725,258 723,548 1,710
Co rse approval center 223,804 194,803 29,001
Pu lic service programs 386,094 424,500 (38,406)
Fo eign legal consultants 13,425 10,620 2,805
La office management advisory services 242,219 189,247 52,972
Me ber benefits program 594,023 590,202 3,821
Le al publications 629,633 523,500 106,133
Se tion administration 828,243 817,292 10,951
Yo ng lawyers division 923,673 784,136 139,537
Co mitttee expenses 13,981 8,000 5,981
W Reece Smith, Jr. Leadership Academy 33,647 33,647
Pu lic information 57,250 77,736 (20,486)
Jo rnal 455,482 478,623 (23,141)
Ne s 1,092,542 1,213,592 (121,050)
BuiIding and grounds 96,853 86,000 10,853
Ot errevenue 16,909 144 16,765
G. irk Haas Fund restricted revenue 6,999 3,500 3,499
Total revenues - bud eta basis 39,291,785 38,961,487 330,298
See Independent Auditors' Report.
- 34-
The Florida Bar and Subsidiaries
GeneralFundScheduleofBudgetedandActualRevenuesandExpenses
YearE~ n June 30, 2013
Expe1ses- budgetarybasis
Regulationofthepracticeoflaw:
Lawy9r Regulation
Staffand officeexpense
Travel
Internal serviceandadministration
Otheroperatingexpenses
Totallawyerregulation
AttorrleyConsumerAssistance Program
Staffandofficeexpense
Travel
Internal serviceand administration
Otheroperatingexpenses
Totalattorneyconsumerassistanceprogram
Multijurisdictionalpractice
Staffand officeexpense
Internal serviceandadministration
Otheroperatingexpenses
Totalmultijurisdictionalpractice
Foreil~ n legalconsultants
Staffand officeexpense
Internal serviceand administration
Otheroperatingexpenses
Totalforeign legalconsultants
Authcrized housecounsel
Staffandofficeexpense
Internal serviceandadministration
Otheroperatingexpenses
Totalauthorized housecounsel
Ethic
c
)
Staffandofficeexpense
Travel
Internal serviceand administration
Otheroperatingexpenses
Totalethics
Actual
9,631,885
122,153
1,462,457
326,418
11,542,913
1,315,801
1,553
167,250
55,315
1,539,919
13,184
4,906
3,767
21,857
12,417
2,233
65
14,715
8,028
3,430
4,059
15,517
695,859
3,931
86,152
2,088
788,030
(Continued)
Budgeted
Variance
Favorable
(Unfavorable)
10,028,323
182,655
1,674,181
417,511
12,302,670
396,438
60,502
211,724
91,093
759,757
1,371,103
1,610
167,937
59,247
1,599,897
55,302
57
687
3,932
59,978
20,275
3,144
4,514
27,933
7,091
(1,762)
747
6,076
7,550
1,330
198
9,078
(4,867)
(903)
133
(5,637)
9,533
3,553
3,137
16,223
1,505
123
(922)
706
726,101
4,801
95,790
3,335
830,027
30,242
870
9,638
1,247
41,997
SeeIndependentAuditors'Report.
- 35-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
June 30,2013
Experlses - budgetary basis
LawyE advertising
Staff and office expense
Contract services
Tra'
el
Inte nal service and administration
Oth er operating expenses
Total lawyer advertising
Rules
Staff and office expense
Tra'
el
Inte nal service and administration
Othler operating expenses
Total rules
Profe
4

Staf and office expense
Contract services
Tra' el
Inte nal service and administration
Oth operating expenses
[fotal professionalism
Finan Ce and records
Staf and office expense
Contract services
Tra'
fel
Inte nal service and administration
Oth operating expenses
Les cost distribution
[fotal finance and records
Course approval center
Staf and office expense
Inte nal service and administration
Oth operating expenses
[fotal course approval center
Contirluing legal education rule
Staff and office expense
Tra\ el
Inte nal service and administration
operating expenses
Total continuing legal education rule
Actual
717,522
2,428
5,099
89,620
6,147
820,816
76,124
871
8,944
1
85,940
322,204
2,573
6,498
44,372
10,008
385,655
1,716,358
45,541
4,117
253,613
310,861
(1,290,448)
1,040,042
184,641
39,150
11
223,802
244,132
1,416
88,369
20,394
354,311
(Continued)
Variance
Favorable
Budgeted (Unfavorable)
746,199 28,677
4,400 1,972
4,914 (185)
100,624 11,004
7,985 1,838
864,122 43,306
103,795 27,671
871 -
12,847 3,903
140 139
117,653 31,713
418,522
5,102
14,681
57,171
25,372
520,848
96,318
2,529
8,183
12,799
15,364
135,193
1,732,993
71,000
4,475
105,656
342,922
(1,370,136)
886,910
16,635
25,459
358
(147,957)
32,061
(79,688)
(153,132)
159,165
22,825
7,713
189,703
(25,476)
(16,325)
7,702
(34,099)
287,650
1,433
51,580
24,422
365,085
43,518
17
(36,789)
4,028
10,774
See Independent Auditors' Report.
- 36-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Year ended June 30, 2013 Actual Budgeted
Favorable
(Unfavorable)
Expenses - budgetary basis
leost of products and services to members:
I Professional enhancement program
Staff and office expense 40,858 23,163 (17,695)
Travel 9,353 9,021 (332)
Internal service and administration 6,172 4,272 (1,900)
Other operating expenses 2,928 2,667 (261)
Total professional enhancement program 59,311 39,123 (20,188)
Meetings and conventions
Staff and office expense 416,661 434,770 18,109
Contract services 2,971 2,846 (125)
Travel 14,704 23,851 9,147
Internal service and administration 163,948 161,033 (2,915)
Other operating expenses 356,878 335,579 (21,299)
Less cost distribution (90,161 ) (58,061 ) 32,100
Total meetings and conventions 865,001 900,018 35,017
Continuing legal education programs
Staff and office expense 1,076,892 1,224,337 147,445
Travel 43,565 58,793 15,228
Internal service and administration 465,651 551,534 85,883
Other operating expenses 1,303,330 1,248,577 (54,753)
Total continuing legal education programs 2,889,438 3,083,241 193,803
Law office management advisory services
Staff and office expense 258,401 323,116 64,715
Travel 30,063 35,360 5,297
Internal service and administration 43,260 47,024 3,764
Other operating expenses 11,276 13,384 2,108
Total law office management advisory services 343,000 418,884 75,884
Member benefits program
Staff and office expense 31,023 49,559 18,536
Internal service and administration 27,966 32,312 4,346
Other operating expenses 206,675 222,777
Total member benefits program 265,664 304,648 22,882
Legal publications
Staff and office expense 375,261 294,002 (81,259)
Travel 1,371 1,615 244
Internal service and administration 46,290 39,726 (6,564)
Other operating expenses 15,448 23,055 7,607
Total legal publications 438,370 358,398 (79,972)
Court rules
Staff and office expense 205,796 384,791 178,995
Travel 7,482 14,886
Internal service and administration 28,171 53,725 25,554
Other operating expenses 23,049 21,610 (1,439)
Total court rules 264,498 475,012 203,110
See Independent Auditors' Report.
- 37-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
Year 9nded June 30,2013
Experlses - budgetary basis
Sectic)n administration
Sta , and office expense
Tra lei
Internal service and administration
Other operating expenses
Total section administration
Comn,ittee Expenses
Sta , and office expense
Tra lei
Intemal service and administration
Other operating expenses
Total committee expenses
UnaL thorized practice of law:
UnlicE!nsed practice of law
Sta rt and office expense
Tra lei
Internal service and administration
Other operating expenses
Total unlicensed practice of law
Publ c service programs:
Public service programs
Sta rt and office expense
Tra \lei
Internal service and administration
Other operating expenses
Total public service programs
Communication with members and the public:
"Jourrlal"
Sta ff and office expense
Tra \lei
Intemal service and administration
Other operating expenses
Total "Journal"
"New'j"
Sta ff and office expense
Tra \lei
Internal service and administration
Other operating expenses
Less cost distribution
Total "News"
Actual
720,918
2,401
519,068
7,745
1,250,132
91,620
5,053
18,954
36,174
151,801
1,439,621
29,089
265,110
31,566
1,765,386
360,599
509
109,976
81,407
552,491
277,272
1,002
76,483
499,198
853,955
504,538
7,313
204,159
1,312,543
(135,824)
1,892,729
Budgeted
654,135
-
548,550
6,305
1,208,990
74,761
5,477
25,309
42,825
148,372
1,395,239
41,238
237,201
49,253
1,722,931
369,781
1,598
77,719
146,862
595,960
277,815
1,907
101,567
536,620
917,909
522,042
12,861
209,633
1,349,436
(177,531 )
1,916,441
(Continued)
Variance
Favorable
(Unfavorable)
(66,783)
(2,401 )
29,482
(1,440)
(41,142)
(16,859)
424
6,355
6,651
(3,429)
(44,382)
12,149
(27,909)
17,687
(42,455)
9,182
1,089
(32,257)
65,455
43,469
543
905
25,084
37,422
63,954
17,504
5,548
5,474
36,893
(41,707)
23,712
See Independent Auditors' Report.
- 38-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year 6nded June 30, 2013 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
Publio information
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Total public information
779,696
175,911
47,571
236,287
163,733
1,403,198
Administration:
General administration
Staff and office expense
Travel
Internal service and administration
Othgr operating expenses
Total general administration
General counsel
Staff and office expense
Contract services
Travel
Internal service and administration
~ operating expenses
!Total general counsel
167,938 10,283
350,576 130,602
2,788 (686)
8,243 (35,828)
911 721
530,456 105,092
Recorrds management
Sta(f and office expense
Corltract services
Travel
Internal service and administration
~ operating expenses
Total records management
723,137
46,944
10,868
30,327
811,276
Board and officer
Staff and office expense 228,713 249,138 20,425
Travel 18,548 23,268 4,720
Internal service and administration 9,072 11,204 2,132
Other operating expenses 371,414 359,022 (12,392)
ITotal board and officer 627,747 642,632 14,885
157,655
219,974
3,474
44,071
190
425,364
311,146
227
56,783
462
368,618
418,500 107,354
58,750 58,750
6,384 6,157
(29,767) (86,550)
840 378
454,707 86,089
Human resource management
Staff and office expense
Trayel
Internal service and administration
Other operating expenses
~ cost distribution
,Total human resource management
301,235
1,586
18,691
17,024
(338,538)
(2)
840,892
299,605
63,889
271,281
194,024
1,669,691
61,196
123,694
16,318
34,994
30,291
266,493
906,325 183,188
62,440 15,496
4,737 (6,131)
39,846 9,519
1,013,348 202,072
368,570 67,335
3,502 1,916
12,743 (5,948)
18,562 1,538
(323,408) 15,130
79,969 79,971
See Independent Auditors' Report.
- 39-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2013 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
systems
Staff and office expense
C<t>ntract services
Travel
Internal service and administration
a_her operating expenses
cost distribution
Total information systems
3,608,265
323,273
4,936
322
91,625
(3,916,378)
112,043
3,776,085 167,820
467,000 143,727
14,678 9,742
14 (308)
140,930 49,305
(4,285,919) (369,541 )
112,788 745
Research, planning and evaluation
Staff and office expense
Contract services
Travel
Internal service and administration
----mher operating expenses
Total research, planning and evaluation
166,378
11,000
4,308
1,443
10,131
193,260
and grounds
Staff and office expense 1,722,470
Travel 2,074
In'ernal service and administration 301
Other operating expenses
Less cost distribution (1,628,585)
172,489 6,111
13,350 2,350
5,558 1,250
1,955 512
10,482 351
203,834 10,574
1,930,568 208,098
3,725 1,651
14 (287)
3 3
(1,832,735) (204,150)
Total building and grounds 96,260 101,575 5,315
and receiving
Staff and office expense 121,188 150,922 29,734
Internal service and administration (3,044) (4,000) (956)
operating expenses 450 36 (414)
cost distribution (118,599) (144,464) (25,865)
Total shipping and receiving (5) 2,494 2,499
Divi$ion director - legal
Staff and office expense (9,846) (27,753) (17,907)
Travel 10,225 20,619 10,394
In'ernal service and administration (379) 1,049 1,428
operating expenses 1 500 499
. Total division director - legal 1 (5,585) (5,586)
Divi$ion director - ethics, UPL and professionalism
and office expense (9,296) (8,946) 350
Travel 9,105 8,472 (633)
Internal service and administration 192 1,024 832
O!her operating expenses 3 59 56
Total division director - ethics, UPL and professionalism 4 609 605
See Independent Auditors' Report.
- 40-
I
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year I(nded June 30, 2013 Actual Budgeted (Unfavorable)
Expernses - budgetary basis
ITotal division director - programs
(2,815)
2,571
175
66
(3)
19,434
4,149
1,325
217
25,125
22,249
1,578
1,150
151
25,128
Divisi<;>n director - administration
Staff and office expense (47,996)
747
Internal service and administration
r ~ e l
5,034
Other operating expenses 283
Les cost distribution 46,616
4,684 otal division director - administration
Ethics/advertising staff pool
Staff and office expense (483) 18,325 18,808
Inte nal service and administration 468 468
otal ethics/advertising staff pool (15) 18,325 18,340
Legal ieducation and specialization staff pool
Staff and office expense 33,548 11,098
Inte' nal service and administration 22,446
i otal legal education and specialization staff pool 33,548 33,544
Profe$sional development staff pool
Sta, and office expense (3,050) 45,613 48,663
Internal service and administration 1,905 764 (1,141)
Oth r 0 eratin ex enses 1,142 993 149
otal professional development staff pool (3) 47,370 47,373
"Journal" - "News" staff pool
Staff and office expense
r ~ e l
Intetnal service and administration
Oth r 0 eratin ex enses
otal "Journal" - "News" staff 001
Legislation:
(5,165)
2,613
1,585
979
12
120,914
299,134
4,352
61,935
169
486,504
(3,050)
3,874
4,000
3,250
8,074
120,681
306,704
2,788
52,259
177
482,609
2,115
1,261
2,415
2,271
8,062
(233)
7,570
(1,564)
(9,676)
3,895
See Independent Auditors' Report.
- 41 -
8
I
I
TheFloridaBarandSubsidiaries
GeneralFundScheduleofBudgetedandActualRevenuesandExpenses
(Continued)
Variance
Favorable
Year ended June 30, 2013 Actual Budgeted (Unfavorable)
Expenses- budgetarybasis
YoungLawyers:
Young LawyersDivision
Staffandofficeexpense
Tnavel
InJernal serviceandadministration
Otheroperatingexpenses
Totalyoung lawyersdivision
OthFrprogramsandcosts:
Initiatives
andofficeexpense
T,Javel
Internalserviceandadministration
operatingexpenses
ITotaldiversityinitiatives
Wm
i
!. ReeceSmith,Jr. LeadershipAcademy
andofficeexpense
Travel
Internalserviceandadministration
operatingexpenses
Law erassistanceprogram/substanceabuse
In ernalserviceandadministration
oher0 eratin ex enses
Total lawyerassistanceprogram/substanceabuse
Florikta Registered Paralegal
Staffandofficeexpense

In ernalserviceandadministration
oher0 eratin ex enses
Total Florida registered paralegal
57,317
9,555
100,874
688,966
856,712
74,301
14,735
17,319
49,229
155,584
103,002
9,749
19,138
31,348
163,237
54,605
470,000
524,605
143,224
2,779
25,584
7,791
179,378
64,152 6,835
11,793 2,238
103,509 2,635
806,200 117,234
985,654 128,942
100,929 26,628
9,059 (5,676)
19,825 2,506
51,650 2,421
181,463 25,879
54,550 (48,452)
7,800 (1,949)
14,050 (5,088)
21,450 (9,898)
97,850 (65,387)
57,613 3,008
470,000
527,613 3,008
180,703 37,479
4,375 1,596
29,229 3,645
11,801 4,010
226,108 46,730
SeeIndependentAuditors'Report.
- 42-
I
I
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Yearended June 30,2013 Actual Budgeted (Unfavorable)
246,891
31,629 Total printshop
systems
and officeexpense
In ernal serviceand administration
oheroperatingexpenses
L sscostdistribution
459,045
216
- budgetarybasis
shop
Staffand officeexpense 30,658
serviceand administration (72)
oheroperatingexpenses 1,043
L sscostdistribution
Totalofficesystems
HaasFund (restrictedfund) 2,500 2,500
expenses 34,858,725 37,233,783 2,450,453
$ 4,433,060 $ 1,727,704 $ 2,780,751
SeeIndependentAuditors'Report.
- 43-
The Florida Bar and Subsidiaries
General Fund Reconciliation of Revenues and Expenses on a
Budgetary Basis to Totals Per the Consolidating Statement
of Revenues, Expenses and Changes in Net Position
Excess of
Revenues
Operating Over (Under)
Year ended June 30, 2013 Revenues Expenses Expenses
!
on budgetary basis $ 39,291,785 $ 34,858,725 $ 4,433,060
Add
l
operations
IFlorida Lawyers Association for the Maintenance of
Excellence, Inc. 17,427 720 16,707
The Florida Attorneys Charitable Trust 46,060 451 45,609
Less:
for financial statement presentation purposes
, Net change in the fair value of investments (1,812,071) (1,812,071)
BllIdgeted items treated as interfund transfers for basic
financial statement purposes
Depreciation (611,690) 611,690
Contributions
operating revenues, expenses and income per Consolidating
Sqhedule of Statement of Revenues, Expenses and Changes in
Nt Position $ 37,543,201 $ 34,248,206 $ 3,294,995
See Independent Auditors' Report.
- 44-
The Florida Bar and Subsidiaries
Clients' Security Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
ended June 30, 2013 Actual Budget (
Favorable
Unfavorable)
revenues
Amnual contribution *

$ 2,280,900 $
86,364
2,280,900
31,500
$
54,864
I Total operatingrevenues 2,367,264 2,312,400 54,864
expenses
andofficeexpense 35,569
829
Infernalserviceandadministration

29,243
CI imspaid
0'her0 eratin ex enses 15,930
81,571 I Totaloperatingexpenses
I
income(loss) (132,666) (269,101) 136,435
revenues
Inestmentearnings(loss) 184,696 190,000 (5,304)
184,696 190,000 (5,304)
I
in net[?osition $ 52,030 $ (79,101) $ 131,131
* annualcontributionfromthegeneralfund istreated asabudgetedrevenueitem on this
st+tement. However, itistreatedasan interfundtransferinthebasicfinancial statementssection
ofIthis report. Thedifferencebetweenthebudgetbasisstatementandthe basicfinancial statement
isreconciled asfollows:
in netposition- budgetarybasis $ 52,030
Less: annualcontributiontreatedasan interfund
1 transferon thebasicfinancialstatements (2,280,900)
!
in netassetsperConsolidatingScheduleof
St tementofRevenues, Expensesand Changesin
N t Position $
SeeIndependentAuditors'Report.
- 45-
The Florida Bar and Subsidiaries
Certification Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Year ended June 30,2013 Actual Budget (Unfavorable)
I
I
Op rating revenues
M mber Fees
S les
I Total operating revenues
OpJrating expenses
St,ff and office expense
C ntract services
Tavel
service and administration
operating expenses
I Total
Op4rating income (loss)
$ 1,311,519 $ 1,424,485 $
7,875 11,250
1,319,394 1,435,735
869,120 927,340
22,009 43,500
45,493 60,438
171,884 170,764
106,056 185,365
1,214,562 1,387,407
104,832 48,328
(112,966)
3,375
(116,341 )
58,220
21,491
14,945
(1,120)
79,309
172,845
56,504
I Total non-o eratin revenues
C ange in net assets per Consolidating Schedule of
S atement of Revenues, Expenses and Changes in
N t Position
35,456 25,000
35,456 25,000
$ 140,288 $ 73,328 $
10,456
10,456
66,960
See Independent Auditors' Report.
- 46-
The Florida Bar and Subsidiaries
Sections Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Yea ended June 30, 2013 Actual Budgeted (Unfavorable)
Rev nues- budgetarybasis
I
Ad inistrativelaw $ 17,195 $ 24,732 $ (7,537)
Alt rnativedisputeresolution 20,427 16,247 4,180
Ap ellatepracticeand advocacy 142,932 92,941 49,991
Bu inesslaw
Ci' county,andlocalgovernment
C uncilofsections
544,342
82,341
184
528,510
73,891
6,673
15,832
8,450
(6,489)
Criminal law 86,284 88,635 (2,351)
EI erlaw 120,932 76,156 44,776
Enrrtainment,artsand sportslaw
24,260 37,824 (13,564)
En ironmentaland land uselaw 50,423 66,326 (15,903)
Eq al opportunitylaw 13,895 2,957 10,938
Fa ilylaw 545,415 466,012 79,403
G neral practice 100,902 92,399 8,503
G vernmentlawyers 18,922 22,940 (4,018)
He Ith law 50,053 43,754 6,299
Int rnational law 121,184 133,110 (1'1,926)
La orand employmentlaw 103,673 84,955 18,718
Ou -of-statepractice 15,192 17,697 (2,505)
Pu licinterestlaw 4,869 8,163 (3,294)
Re Iproperty, probateand trustlaw 945,599 1,032,496 (86,897)
Ta law 283,007 272,366 10,641
Tri Ilawyers 369,985 426,074 (56,089)
W rkers'compensation 85,033 57,011 28,022
I
i
I
Total revenues- bUdgetarybasis 3,747,049 3,671,869 75,180
SeeIndependentAuditors'Report.
- 47-
The Florida Bar and Subsidiaries
Sections Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
ended June 30, 2013 Actual Budgeted (Unfavorable)
op,rating expenses - budgetary basis
1
law 20,634 37,861 17,227
Arrnative dispute resolution
4,492 9,145 4,653
A pellate practice and advocacy 75,223 66,371 (8,852)
B siness law 553,775 495,242 (58,533)
C ty, county, and local government 72,481 90,043 17,562
of sections
5,230 5,700 470
C iminallaw 61,133 93,795 32,662
EI er law 78,834 58,610 (20,224)
E tertainment, arts and sports law 10,767 31,736 20,969
E vironmental and land use law 83,522 125,007 41,485
E ual opportunity law 3,279 5,016 1,737
F milylaw 490,703 646,550 155,847
G neral practice 106,625 126,550 19,925
G vernment lawyers 17,968 35,813 17,845
H alth law 19,772 41,342 21,570
In ernational law 83,154 146,036 62,882
L bor and employment law 72,650 117,303 44,653
0 t-of-state practice 31,531 23,453 (8,078)
P blic interest law 3,538 6,725 3,187
R al property, probate and trust law 1,083,923 1,192,385 108,462
T x law 231,989 254,606 22,617
T allawyers 516,941 605,168 88,227
Wlorkers' compensation 89,628 75,480 (14,148)
I
I
I Total - budgetary basis 3,717,792 4,289,937 572,145
I
I
i
Ch nge in net assets per the Consolidating Schedule of
Stat ment of Revenues, Expenses and Changes in Net
Pos tion $ 29,257 $ 647,325
See Independent Auditors' Report.
- 48-
Other Reports
Carr, Riggs ,. Ingram, LLC
1713 Mahan Drive
Tallahassee. FL 32308
8 5 ~ 8788717
(850) 8782344 (fax)
www.cricpa.com
INDEPENDENTAUDITOR'SREPORTON INTERNALCONTROLOVERFINANCIAL
REPORTINGAND ON COMPLIANCEAND OTHERMATTERSBASEDONAN AUDITOF
FINANCIALSTATEMENTSPERFORMEDINACCORDANCEWITH GOVERNMENT
AUDITINGSTANDARDS
Board of Governors
The Florida Bar
Tallahassee, Florida
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States, the financial
statements of the business-type activities of The Florida Bar and Subsidiaries, as of and for
the year ended June 30,2013 and 2012, and the related notes to the financial statements,
which collectively comprise The Florida Bar and Subsidiaries' basic financial statements, and
have issued our report thereon dated December 12,2013.
InternalControlOverFinancial Reporting
In planning and performing our audit of the financial statements, we considered The Florida
Bar and Subsidiaries' internal control over financial reporting (internal control) to determine
the audit procedures that are appropriate in the circumstances for the purpose of expressing
our opinions on the financial statements, but not for the purpose of expressing an opinion on
the effectiveness of The Florida Bar and Subsidiaries' internal control. Accordingly, we do not
express an opinion on the effectiveness of The Florida Bar and Subsidiaries' internal control.
A deficiency in internal control exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, misstatements on a timely basis. A material
weakness is a deficiency, or a combination of deficiencies, in internal control, such that there
is a reasonable possibility that a material misstatement of the entity's financial statements
will not be prevented, or detected and corrected on a timely basis. A significant deficiency is
a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control
that might be material weaknesses or, significant deficiencies. Given these limitations, during
our audit we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not been
identified.
- 49-
ofGovernors
trheFlorida Bar
Compliance and Other Matters
I
part of obtaining reasonable assurance about whether The Florida Bar and Subsidiaries'
financial statements are free from material misstatement, we performed tests of its compliance
)Nith certain provisions of laws, regulations, contracts, and grant agreements, noncompliance
",ith which could have a direct and material effect on the determination of financial statement
mounts. However, providing an opinion on compliance with those provisions was not an
bjective of our audit, and accordingly, we do not express such an opinion. The results of our
ests disclosed no instances ofnoncompliance orothermatters that are required to be reported
nderGovernment Auditing Standards.
purposeofthisReport
I
'he purpose of this report is solely to describe the scope of our testing of internal control and
ompliance and the results ofthattesting, and not to provide an opinion on the effectiveness of
he entity's internal control or on compliance. This report is an integral part of an audit
erformed in accordance with Government Auditing Standards in considering the entity's
internal control and compliance. Accordingly, this communication is not suitable for any other
urpose.
t


pecember 12,2013
- 50-