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TheFloridaBarandSubsidiaries

FinancialStatementsand
SupplementalInformation
June30,2010and2009
The Florida Bar and Subsidiaries
Table of Contents
June 30,2010 and 2009
Independent Auditors' Report 1 - 2
Management's Discussion and Analysis 3-7
Financial Statements
Consolidated Statements of Net Assets 8
Consolidated Statements of Revenues, Expenses, and Changes in Net Assets 9
Consolidated Statements of Cash Flows 10 - 11
Notes to Consolidated Financial Statements 12 - 27
Supplementary Information
Consolidating Statement of Net Assets as of June 30,2010. 28 - 29
Consolidating Statement of Revenues, Expenses and Changes
in Net Assets for the year ended June 30, 2010 30
Consolidating Statement of Cash Flows for the year ended
June 30, 2010. 31 - 32
General Fund Schedule of Budgeted and Actual Revenues and Expenses
for the year ended June 30, 2010. 33 - 41
General Fund Reconciliation of Revenues and Expenses on a Budgetary Basis to
Totals Per the Consolidating Statement of Revenues, Expenses
and Changes in Net Assets for the year ended June 30, 2010. 42
Clients' Security Fund Schedule of Budgeted and Actual Revenues and
Expenses for the year ended June 30,2010. 43
Certification Fund Schedule of Budgeted and Actual Revenues and Expenses
for the year ended June 30, 2010. 44
Sections Fund Schedule of Budgeted and Actual Revenues and Expenses for the
year ended June 30,2010. 45 - 46
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 47 -48
Carr, Riggs &Ingram. UC
1113 Mahan Drive
Tallahassee. Fl32308
(850) 878-8177
(850) 878-2344 (fax)
www.cncpa.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
years ended June 30, 2010 and 2009, which comprise The Florida Bar's basic financial
statements as listed in the table of contents. These financial statements are the
responsibility of The Florida Bar's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of the business-type activities of The Florida Bar
and Subsidiaries as of June 30, 2010 and 2009, and the changes in financial position and
cash flows thereof for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated
November 3, 2010, on our consideration of The Florida Bar and Subsidiaries' internal
control over financial reporting and on our tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements and other matters. The purpose of
that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on the
internal control over financial reporting or on compliance. That report is an integral part of
an audit performed in accordance with Government Auditing Standards and should be
considered in assessing the results of our audit.
Board of Governors
The Florida Bar
Page 2
The management's discussion and analysis on pages 3 through 7 is not a required part of the
basic financial statements but is supplementary information required by accounting principles
generally accepted in the United States of America. We have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement
and presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
Our audits were performed for the purpose of forming an opinion on the consolidated financial
statements that collectively comprise The Florida Bar and Subsidiaries' basic financial
statements. The supplementary information as listed in the table of contents, is presented for
the purposes of additional analysis and is not a required part of the basic consolidated financial
statements of The Florida Bar. Such information has been subjected to the auditing procedures
applied in the audit of the basic consolidated financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic consolidated financial statements taken as
a whole.
~ / ~ . J ~ / L . C
Tallahassee, Florida
November 3, 2010
Management's Discussion and Analysis
The Florida Bar and Subsidiaries
Management's Discussion and Analysis
The Florida Bar is the statewide professional and regulatory organization for lawyers with more
than 89,000 members. Headquartered in Tallahassee, The Florida Bar is a unified state bar by
ruleoftheSupremeCourtofFlorida. MembershipinTheFloridaBarisanecessarycomponentof
Supreme CourtofFlorida regulation ofall lawyers licensed to practice lawin Florida (Article IV,
Section 15, Florida Constitution). The foundation forthe organization is built on a philosophy of
equityand ethics. Through its programsand services, the Barsupportsthis philosophywith four
pillarsthatfunction asthe mission ofThe Florida Bar: providing publicservice, protecting rights,
promotingprofessionalismandpursuingjustice.
OverviewoftheFinancialStatements
This annual report consists ofthree 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 as the statewide regulator of the
practice oflawand the professional association oflawyers. Its activities are accounted forasa
proprietary type enterprise fund because it charges fees to provide its services similar to a
businessenterprise.
TheStatementofNetAssetsincludesallofTheFloridaBar'sassetsandliabilities. Thenetassets
arethe difference between The Florida Bar's assets and liabilities. The StatementofRevenues,
Expenses, and Changes in Net Assets include all ofThe Florida Bar's revenues and expenses
regardlessofwhenthecashisreceivedorpaid. Thechangeinnetassetsisonewaytomeasure
The Florida Bar's financial health or position. A Statement of Cash Flows provides additional
informationregardingthechangeinTheFloridaBar'scashposition.
SummaryofOperations
The Florida Bar adopted the provisions ofGovernmental Accounting Standards Board (GASB)
Statement No. 51, Accounting and Financial Reporting for Intangible Assets as ofJuly 1, 2009.
Thisstatementrequires all intangibleassetstobecapitalized in thestatementofnetassets. The
Florida Bar possessed software purchased from external sources that had not been previously
capitalized. Capitalassets, operatingexpensesand netassetshavebeen restatedforall periods
presentedtoreflectthechangeinaccountingfromtheadoptionofthisstandard.
At June 30, 2010 and 2009, The Florida Bar had $64,135,939 and $55,270,769 (as restated),
respectively in total assets. Of this amount $53,623,921 and $45,425,002 was held in cash and
investmentsand $7,564,589and $7,226,645 (as restated) was invested in capital assets atJune
30, 2010 and 2009, respectively. The primary liability atJune 30, 2010 and 2009was deferred
revenueof$10,981,981 and$7,670,851,respectively, resultingfromadvancecollectionofmember
fees and prepayments for Continuing Legal Education registrations. Our net assets were
$44,428,657and$39,248,358(asrestated)atJune30,2010and2009,respectively.
These amounts are in line with the prior year's balances after restatement given the current
changesin netassets. Theoriginaloperating budgetsfortheGeneralFund (excludingthewholly-
ownedsubsidiaryandcontrolledentities)fortheyearsendedJune30,2010and2009approvedby
the Florida Supreme Court, planned on an increase in net assets of $21,760 and $94,033,
respectively. AfterBoardofGovernoramendments,theplannedincreasebecame$1,484,740and
Seethe IndependentAuditors'Report.
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The Florida Bar and Subsidiaries
Management's Discussion and Analysis
$1,287,840, respectively. General Fund actual operations resulted in a change in net assets of
$6,489,783 and ($1,527,857), respectively. The increase in net assets resulted primarily from the
effects of a more favorable investment climate during the past fiscal year and decreases in
operating costs of the various departments of The Florida Bar. Included in the supplemental
information is an actual to budget comparison for each department.
For the year ended June 30, 2010 and 2009, The Florida Bar's budget funded most departments at
a continuation level.
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS
2009
June 30, 2010 (as restated) Change
Assets
Current assets $ 54,878,359 $ 46,351,133 $ 8,527,226
Capital assets, net 7,564,589 7,226,645 337,944
Restricted assets 1,692,991 1,692,991
Total assets $ 64,135,939 $ 55,270,769 $ 8,865,170
Liabilities
Current liabilities $ 15,599,098 $ 11,922,237 $ 3,676,861
Other liabilities 4,108,184 4,100,174 8,010
Total liabilities 19,707,282 16,022,411 3,684,871
Net assets
Invested in capital assets, net of related debt 7,564,589 5,775,010 1,789,579
Restricted for scholarships 38,682 32,405 6,277
Unrestricted 36,825,386 33,440,943 3,384,443
Total net assets 44,428,657 39,248,358 5,180,299
Total liabilities and net assets $ 64,135,939 $ 55,270,769 $ 8,865,170
See the Independent Auditors' Report.
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The Florida Bar and Subsidiaries
Management's Discussion and Analysis
CONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS
June 30,
Assets
Current assets
Capital assets, net
Restricted assets
Total assets
2009
(as restated)
$ 46,351,133
7,226,645
1,692,991
$ 55,270,769
2008
(as restated)
$ 54,867,164
7,053,053
$ 61,920,217
$
$
Change
(8,516,031 )
173,592
1,692,991
(6,649,448)
Liabilities
Current liabilities
Other liabilities
Total liabilities
$ 11,922,237
4,100,174
16,022,411
$ 13,594,124
3,840,587
17,434,711
$ (1,671,887)
259,587
(1,412,300)
Net assets
Invested in capital assets, net of related debt
Restricted for scholarships
Unrestricted
Total net assets
5,775,010
32,405
33,440,943
39,248,358
5,387,168
34,412
39,063,926
44,485,506
387,842
(2,007)
(5,622,983)
(5,237,148)
Total liabilities and net assets $ 55,270,769 $ 61,920,217 $ (6,649,448)
For more detailed information, see the accompanying Consolidated Statements of Net Assets.
CONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
2009
June 30, 2010 (as restated) Change
Operating revenues $ 41,356,998 $ 41,102,989 $ 254,009
Operating expenses (40,021,048) (41,761,770) 1,740,722
Net operating revenues 1,335,950 (658,781) 1,994,731
Non-operating revenues 3,844,349 3,844,349
Non-operating expenses (4,578,366) 4,578,366
Net non-operating revenues 3,844,349 (4,578,366) 8,422,715
(Decrease) Increase in net assets
Net assets, beginning
5,180,299
39,248,358
(5,237,147)
44,485,506
10,417,446
(5,237,148)
Net assets, ending $ 44,428,657 $ 39,248,359 $ 5,180,298
See the Independent Auditors' Report.
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The Florida Bar and Subsidiaries
Management's Discussion and Analysis
CONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
2009 2008
June 30, (as restated) (as restated) Change
Net operating revenues
Operating revenues
Operating expenses
$
(658,781)
41,102,989
(41,761,770)
$
786,536
40,560,544
(39,774,008)
$
(1,445,317)
542,445
(1,987,762)
Non-operating revenues
Non-operating expenses
Net non-operating revenues
(4,578,366)
(4,578,366)
1,320,375
(144,074)
1,176,301
(1,320,375)
(4,434,292)
(5,754,667)
(Decrease) Increase in net assets
Net assets, beginning
(5,237,147)
44,485,506
1,962,837
42,522,669
(7,199,984)
1,962,837
Net assets, ending $ 39,248,359 $ 44,485,506 $ (5,237,147)
For more detailed information, see the accompanying Consolidated Statements of Revenues,
Expenses, and Changes in Net Assets.
CAPITAL ASSETS
The Florida Bar had invested the following in Capital Assets:
2009
June 30, 2010 (as restated) Change
Land $ 1,306,690 $ 1,306,690 $
Building and improvements 9,615,208 9,630,046 (14,838)
Landscaping and parking 120,318 120,318
Equipment and furnishings 4,562,368 4,792,884 (230,516)
Software 1,231,757 491,534 740,223
Software in development 142,237 142,237
Construction in progress 60,763 6,243 54,520
Total, prior to depreciation 17,039,341 16,347,715 691,626
Accumulated depreciation (9,474,752) (9,121,070) (353,682)
Net capital assets $ 7,564,589 $ 7,226,645 $ 337,944
See the Independent Auditors' Report.
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The Florida Bar and Subsidiaries
Management's Discussion and Analysis
CAPITAL ASSETS
2009 2008
June 3D, (as restated) (as restated) Change
Land $ 1,306,690
Building and improvements 9,630,046
Landscaping and parking 120,318
Equipment and furnishings 4,792,884
Software 491,534
Construction in progress 6,243
Total, prior to depreciation 16,347,715
Accumulated depreciation (9,121,070)
Net capital assets $ 7,226,645
$ 1,306,690 $
8,983,412 646,634
120,318
4,629,153 163,731
491,534
19,526 (13,283)
15,550,633 797,082
(8,497,580) (623,490)
$ 7,053,053 $ 173,592
Presently, The Florida Bar has no plans to significantly alter its investment in capital assets
other than to continue to add costs of developed software.
DEBT
At June 30, 2009, The Florida Bar had $1,451 ,635 outstanding in a mortgage loan. The
mortgage loan was paid off in October 2009.
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 payments
by lawyers of their required annual fees, sales of continuing education programs to lawyers, and
other fees for 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.
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Financial Statements
The Florida Bar and Subsidiaries
Consolidated Statements of Net Assets
June 30,
Assets
2010
2009
(as restated)
Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Prepaid expenses and other assets
$ 16,539,915
37,084,006
678,105
576,333
$ 13,910,031
31,514,971
567,166
358,965
Total current assets 54,878,359 46,351,133
Capital assets, net
Land 1,306,690 1,306,690
Buildings and improvements 9,615,208 9,630,046
Landscaping and parking 120,318 120,318
Equipment and furnishings 4,562,368 4,792,884
Software 1,231,757 491,534
Software development in progress 142,237
Construction in progress 60,763 6,243
Accumulated depreciation (9,474,752) (9,121,070)
Total capital assets, net 7,564,589 7,226,645
Restricted assets
Client Security Fund recovery receivable 1,692,991 1,692,991
Total assets $ 64,135,939 $ 55,270,769
Liabilities and Net Assets
Current liabilities
Current portion of long-term debt $
-
$ 1,451,635
Accounts payable 1,185,251 1,668,864
Client Security Fund claims payable 2,245,484 79,646
Accrued expenses 1,137,469 1,002,335
Deferred revenues 10,981,981 7,670,851
Security deposits 48,913 48,906
Total current liabilities 15,599,098 11,922,237
Non-current liabilities
Compensated absences payable 2,415,193 2,407,183
Deferred revenue for CSF recovery 1,692,991 1,692,991
Total non-current liabilities 4,108,184 4,100,174
Total liabilities 19,707,282 16,022,411
Net assets
Invested in capital assets, net of related debt 7,564,589 5,775,010
Restricted for scholarships 38,682 32,405
Unrestricted 36,825,386 33,440,943
Total net assets 44,428,657 39,248,358
Total liabilities and net assets $ 64,135,939 $ 55,270,769
See accompanying notes to the consolidated financial statements.
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The Florida Bar and Subsidiaries
Consolidated Statements of Revenues, Expenses and Changes in Net Assets
2009
Years ended June 30, 2010 (as restated)
Operating revenues
Annual fees $ 22,559,757 $ 22,035,716
Other fees from members 6,123,246 6,106,088
Sales of products and services 9,607,272 9,551,215
Advertising 1,807,323 2,084,265
Young lawyers 691,921 554,687
Grants and other 567,479 771,018
Total operating revenues 41,356,998 41,102,989
Operating expenses
Regulation of the practice of law 16,009,178 15,791,436
Cost of products and services provided to members 10,622,494 12,647,506
Unauthorized practice of law 1,396,252 1,383,724
Public service programs 3,298,382 2,896,958
Communications with members and the public 3,995,938 4,095,417
Administration 2,050,296 2,483,553
Legislation 428,137 657,496
Young lawyers 576,058 564,163
Depreciation 864,894 826,822
Other programs and costs 779,419 414,695
Total operating expenses 40,021,048 41,761,770
Operating income (loss) 1,335,950 (658,781)
Non-operating revenues (expenses)
Investment earnings 3,925,155 (4,442,728)
Interest expense (35,855) (121,703)
Loss on disposal of capital assets (44,951) (13,935)
Total non-operating revenues (expenses) 3,844,349 (4,578,366)
Change in net assets 5,180,299 (5,237,147)
Total net assets, beginning of year 39,248,358 44,485,505
Total net assets, end of year $ 44,428,657 $ 39,248,358
See accompanying notes to the consolidated financial statements.
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The Florida Bar and Subsidiaries
Consolidated Statements of Cash Flows
2009
Years ended June 30, 2010 (as restated)
Cash flows from operating activities:
Receipts from members, customers and other sources $ 47,352,268 $ 38,769,936
Payments to employees, suppliers and other vendors (40,343,225) (41,519,016)
Net cash provided by (used in) operating activities 7,009,043 (2,749,080)
Cash flows from non-capital and related financing activities:
Reduction of debt (1,451,635) (214,251 )
Interest paid (35,855) (121,703)
Net cash (used in) non-capital and related financing activities (1,487,490) (335,954)
Cash flows from capital and related financing activities:
Acquisition of capital assets (1,247,789) (1,014,350)
Net cash (used in) capital and related financing activities (1,247,789) (1,014,350)
Cash flows from investing activities:
Redemption of investments
Purchase of investments, net of change in fair value
Investment income
Net cash (used in) provided by investing activities
18,175,941
(23,744,976)
3,925,155
(1,643,880)
17,546,867
(9, 153,257)
(4,442,728)
3,950,882
Increase (decrease) in cash and cash equivalents: 2,629,884 (148,502)
Cash and cash equivalents, beginning of year 13,910,031 14,058,533
Cash and cash equivalents, end of year $ 16,539,915 $ 13,910,031
See accompanying notes to the consolidated financial statements.
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The Florida Bar and Subsidiaries
Consolidated Statements of Cash Flows (Continued)
2009
Years ended June 30, 2010 (as restated)
Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to net cash
provided by (used in) operating activities:
Depreciation
(Increase) decrease in:
Accounts receivable, net
Prepaid expenses and other assets
Increase (decrease) in:
Accounts payable
Claims payable
Accrued expenses
Deferred revenues
Security deposits
Compensated absenses payable
Net cash provided by (used in) operating activities
$ 1,335,950
864,894
(110,939)
(217,368)
(483,613)
2,165,838
135,134
3,311,130
7
8,010
$ 7,009,043
$
$
(658,781)
826,822
(1,998,854)
279,782
263,744
(285,174)
(17,676)
(1,177,484)
310
18,231
(2,749,080)
Non-cash investing, capital, and financing acitivities
Change in the fair value of investments
Loss on disposal of assets
$ 2,502,176
$ 44,951
$
$
(2,638,440)
13,935
Supplemental information
Cash paid for interest $ 35,855 $ 121,703
See accompanying notes to the consolidated financial statements.
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TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE1- NATUREOFBUSINESS
The Florida Barand Subsidiaries(TheFlorida Bar)isthestatewideprofessionalorganizationof
lawyers. Itservesasanadvocateand intermediaryforattorneys,thecourtandthe public. The
Florida Barwasestablishedasa unifiedstatebarbyruleoftheSupremeCourtofFlorida. The
Florida Bar regulates lawyers in Florida, investigates the unauthorized practice of law, offers
continuing legaleducation, publisheslawjournalsandoffersothermemberservices.
NOTE2- SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES
Reporting Entity
The Florida Barisa unifiedstatebarorganizedasanarmoftheSupremeCourtofthe Stateof
Florida. It is considered a govemmental entity because it was established by, and has the
potentialtobedissolvedby, theSupremeCourtofFlorida. Therefore,TheFloridaBaradoptedthe
provisions ofStatement No. 34 ("Statement No. 34") ofthe GovernmentalAccounting Standards
Board IIBasic Financial Statements - and Management's Discussion and Analysis - for State and
Local Governments," asamendedbyStatementNo. 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
financiallyaccountable, be required to be included in The Florida Barsfinancial statements. The
Florida Barisfinanciallyaccountable ifitappointsavoting majorityofan organization'sgoverning
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 Baris required toconsiderotherorganizationsforwhichthe
nature and significance oftheir 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 hasdisclosed no component unitsthat should be included in The Florida Barsfinancial
statements.
Basis of Presentation
The Florida Barisaccountedforasa proprietarytypeenterprisefund. Enterprisefundsare used
to account for activities that are financed and operated in a manner similarto private business
enterprises: (1) where the costs of providing goods and services to the general public on a
continuing basisareto befinancedthrough usercharges; or(2)wherethe periodicdetermination
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 depreciationon capital assets. All revenues and
expensesnotmeetingthisdefinitionarereportedasnon-operatingrevenuesandexpenses.
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TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE2- SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)
Basis ofAccounting
Basis ofaccounting 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 ofaccounting in accordance with accounting principles generally accepted in the
UnitedStatesofAmerica. Underthismethod, revenuesarerecognizedwhentheyareeamedand
expenses are recognized when they are incurred. The measurement focus ofproprietary fund
types is on a flow ofeconomic resources method, which emphasizes the determination of net
income, financial position, and cash flow. All fund assetsand liabilities, current and non-current,
areaccountedforintheConsolidatedStatementsofNetAssets.
Cash and Cash Equivalents
All demanddepositaccountsandshort-term highlyliquid investmentswith original maturitiesof
threemonthsorlessarereportedascashequivalents.
Investments
Investmentsarereportedatfairvalues,whicharebasedonquotedmarketprices.
Capital Assets
Capitalassetsarestatedatcostlessaccumulateddepreciation. Thevalueofsoftwaredeveloped
for The Florida Bar's use includes all direct and indirect costs that are related to development
activities. The costofcapital assets isdepreciated overtheestimated useful lives ofthe related
assets, rangingfrom 5to40years, usingthestraight-linemethod. Whencapitalassetsareretired
orotherwise disposed of, the costs and related accumulated depreciation are removed from the
accountsand anyresulting gainorloss is reflected in the Consolidated StatementsofRevenues,
ExpensesandChangesin NetAssets, intheperiodofdisposal.
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 offunds by
errant Florida Bar members. The Fund is financed by $25 ofthe annual fees due from each
Florida Bar member who is in good-standing (including inactive members). Claims payable
representamountsthathavebeenapprovedforpaymentfromtheFund.
Deferred Revenues
Deferred revenuesconsistprimarilyofmembershipfeescollected inadvance, prepaid advertising
andprepaidlegaleducationcourses.
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TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE2- SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)
Derivative Financial Instruments
The Florida Bar follows the provisions of Governmental Accounting Standards Board (GASB)
TechnicalBulletinNo. 2003-1, DisclosureRequirementsforDerivativesNotReportedatFairValue
ontheStatementofNetAssets,anamendmenttoGASBTechnicalBulletin94-1. GASBTechnical
Bulletin No. 2003-1 providesan updated definitionofderivatives and requires certain disclosures
regarding the government'sobjective forentering into derivativetransactions and the derivative's
terms,fairvalue,andriskexposures.
Allocation of Expenses
Thecostsofprovidingthevariousprograms, services, andotheractivitieshavebeensummarized
onafunctional basis in theConsolidated StatementofRevenues, Expenses and Changes in Net
Assets. Accordingly, certain costs have been allocated among the programs and supporting
servicesbenefited.
Principles of Consolidation
Theaccompanying consolidatedfinancial statementsincludetheaccountsofThe Florida Barand
itswholly-owned subsidiary, The Florida BarBuilding Corporation, and itsothercontrolledentities,
Florida Lawyers Association forthe Maintenance of Excellence, Inc., and The Florida Attorneys
CharitableTrust. All significant intercompanytransactions and accounts have been eliminated in
consolidation.
Income Taxes
TheFlorida Barisanadministrativeagencyofthe SupremeCourtand isnotsubjecttofederal or
state income tax. The Florida Bar Building Corporation, Florida Lawyers Association for the
Maintenance ofExcellence, Inc., and The Florida Attorneys Charitable Trust have been granted
exemption from federal and state income taxes except on unrelated business income under
Sections501(c)(25),501(c)(6),and501(c)(3),respectively,oftheInternalRevenueCode.
Estimates
Thepreparationoffinancial statementsinconformitywithaccountingprinciplesgenerallyaccepted
in the United States ofAmerica requires managementto 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
expensesduringthereportingperiod. Actualresultscoulddifferfromthoseestimates.
Concentration
TheFloridaBarreceivesthemajorityofitsrevenuefromlawyerslicensedtopracticeintheStateof
Florida.
- 14-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Net Assets
Net assets are categorized as invested in capital assets, restricted for scholarships, and
undesignated. Invested in capital assets is intended to reflect the portion of net assets that are
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.
Subsequent Events
Subsequent events have been evaluated through the date of the auditors' report.
Adoption of Pronouncement
As of July 1, 2009, The Florida Bar adopted the provisions of GASB Statement No. 51, The
Accounting and Financial Reporting for Intangible Assets. This statement provides the accounting
and reporting requirements for intangible assets. Intangible assets owned by The Florida Bar
include purchased licensed computer software from external sources and internally developed
computer software. As a result of the adoption of GASB No. 51, The Florida Bar restated the prior
year balances to reflect the capitalization of purchased licensed computer software and the
applicable accumulated depreciation and depreciation expense. The Florida Bar did not have the
records available to record an adjustment for internally developed computer software developed in
prior years. GASB No. 51 allows The Florida Bar to account for internally developed software on a
prospective basis.
The following table summarizes the balances as previously reported and the adjustments made to
reflect the adoption of GASB No. 51:
2009 2009
(as previously
reported) Adjustments (as restated)
Software $
-
$ 491,534 $ 491,534
Accumulated depreciation (8,777,343) (343,727) (9,121 ,070)
Depreciation expense 771,679 55,143 826,822
Net assets, beginning of year 44,282,555 202,950 44,485,505
Net assets, end of year 39,100,551 147,807 39,248,358
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
-15-
TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE3- CASHANDCASHEQUIVALENTS(CONTINUED)
Barwill 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.
Cashand cash equivalentsare heldattwofinancial institutions. Operatingcash is insured bythe
Federal Deposit Insurance Corporation (FDIC) up to $250,000. Operating a1sh balances were
$6,095,443and $4,818,643atJune30, 2010and2009, respectively. Additionalcash and money
market funds are held at a financial institution insured by the Securities Investor Protection
Corporation up to $100,000. Additional cash and money market funds were $10,444,472 and
$9,091,388atJune30, 2010and2009, respectively.
NOTE4- INVESTMENTS
Investment Objectives and Policies
Investments will be made forthe sole interest and exclusive purpose ofproviding investment
returnsforThe Florida Bar. The Florida Bar's investmentobjectivesand policies are achieved
through a short-term account portfolio and a long-term account portfolio. The ultimate
responsibility forthe propersupervision ofThe Florida Bar's investmentportfolio rests with the
BoardofGovernorsandthe InvestmentCommittee.
The purpose ofthe short-term portfolio is to provide forThe Florida Bar's short-term working
capital needs. Theshort-termportfoliopossessesashort-termtimehorizon(onetothreeyears)
and withinthishorizon, the primaryobjectivesoftheshort-term portfolioaretopreservecapital
for short-term cash flow needs, provide liquidity, and to achieve attractive short-term yields
consistentwiththepreservationofcapital.
The purpose ofthe long-term investmentportfolio is to provide forThe Florida Bar's operating
needs and to fund The Florida Bar's programs both today and into the future. The long-term
portfolio possesses an intermediate to long-term horizon (five to seven years) and within this
horizon, the primary objectives of the long-term portfolio are to provide long-term growth of
capitalandincome.
Theassetallocationguidelineswith regard toacceptableassetclasses, theoveralltargetasset
mix,andtherepresentativeindicesofeachassetclasswereasfollowsasofJune30, 2010:
Short-Term
Target Representative
AssetClasses Minimum Mix Maximum Index
Short-TermFixed income 35.0% 50.0% 65.0% Barday'sIntermediateGovernmentCreditIndex
Cash and Equivalents 35.0% 50.0% 65.0% CitigroupgO-DayU.S.TreasuryBills
- 16-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 4 - INVESTMENTS (CONTINUED)
Long-Term
Asset Classes Minimum
Target
Mix Maximum
Representative
Index
Large Cap Equity 1 4 ~ 20.0% 26.0% Standard & Poor's 500 Index
Mid Cap Equity 3.0
o
k 6.0% 9.0% Russell Mid Cap Index
Small Cap Equity 3.0% 6.0
o
k 9.0% Russell 2000 Small Cap Index
International Equity 9.8k 14.0% 18.2% MSCI EAFE Index
Emerging Markets Equity 0.0% 2.0
o
k 5.0% MSCI Emerging Markets Free Index
Real Assets 0.0% 2.0
o
k 5.0
o
k Dow Jones AIG Commodity Index
REITs O.ook 3.0% 6.0% NAREIT Equity Index
TIPS 0.0% 3.0
o
k 6.0% Barclay's Treasury US TIPS Index
Fixed income 28.00% 40.00
o
k 52.00
o
k Barclay's Intermediate Govemment Credit Index
Cash and Equivalents 2.0% 4.0% 10.0% Citigroup 90-Day U.S. Treasury Bills
Subsequent to June 30, 2010, the target asset mix and asset mix restrictions were revised to
allow a more global perspective and to increase diversification.
Investments
At June 30, The Florida Bar's investment balances were as follows:
2010 2009
June 30, FairValu8 Maturity Rating Fair Value
Mutual funds - debt securities (ST) * $ 8,177,376 2 year average ** Ba to Aaa $ 5,533,187
US Treasuries 3,117,964 9 year average** Aaa 1,839,013
Federal Agencies 2,339,271 14 year average** Aaa 2,292,022
Corporate Bonds &Other Fixed Income 4,518,691 12 year average** Baa3 to Aaa 4,846,233
Municipal Bonds 1,112,604 10 year average** Baa1 to Aaa 1,428,541
US Treasury Bonds 1 year average ** Aaa 1,499,775
Mutual funds - equity securities 3,217,164 N/A N/A 3,042,304
Stocks 14,600,936 N/A N/A 11,033,896
Total investments $ 37,084,006 $ 31,514,971
* The Florida Bar invests in short-term mutual funds, which consist of debt securities (Le. fixed income securities).
The Florida Bar's short-term mutual funds are not invested directly in fixed income debt securities. The Florida Bar is
able to sell their interest in these mutual funds at will (SUbject to potential redemption fees).
** Represents the weighted average maturity of debt securities held by The Florida Bar.
-17-
TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE4- INVESTMENTS(CONTINUED)
TheFloridaBarinvestmentsecuritiesareexposedtovariousrisks, suchasinterestrate, market
conditions, and credit risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the value ofinvestment securities
willoccurintheneartermandthatsuchchangescouldmateriallyaffectinvestmentbalances.
Credit Risk
Investments in fixed income debt securitiesthrough mutual funds mustadheretothe policy of
meeting an averagequalityrating ofAorhigherforthe long-term portfolioand AAorhigherfor
the short-term portfolio by eitherStandard & Poor's, Moody's orFitch Investors Service atthe
timeofpurchase. Investments in corporate holdings must be rated investmentgrade orbetter
by eitherStandard & Poor's, Moody'sor Fitch Investors Service atthe time ofpurchase. The
Florida Bar's Investment Committee must approve continuing to hold any downgraded
investments.
Concentration of Credit Risk
Investments in equity securities are subject to a maximum 50/0 commitment at cost and 100/0
weighting at market of the account's total market value for any individual security or single
issuer. Investmentsinfixed income securitiesare subjectto no morethan 50/0 ofthe account's
market value invested in a single issue (at cost) or in direct obligations ofa 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 morethan 15
%
ofthefixed income securities may be invested in
mortgage backed or asset backed securities of a single issuer, with the exception of those
issued bytheU.S. Government, itsagencies, oritssponsoredagencies.
Interest Rate Risk
Interest rate risk arises from investments in debt instruments and is defined as the risk that
changes in interestrateswilladverselyaffectthefairvalueofan investment. The Florida Bar's
investment in U.S. Treasuries, federal agencies, corporate bonds, municipal bonds and U.S.
Treasurybondsare directlysubjecttothe interestrate risk ofdebtinstruments.The Florida Bar
isnotdirectlysubjecttothe interestrate riskforitsshort-termdebtinstruments, asinvestments
inthesedebtsecuritiesareenteredintothroughmutualfundsandTheFloridaBarisabletosell
theirinterest in these mutual funds atwill (subject to potential redemption fees). Additionally,
The Florida Bar has elected to participate in mutual funds with target durations ofone to two
years (lowduration funds). However, investments in mutual funds are with the understanding
that the investment policies stated in the mutual fund's prospectus supersedes the guidelines
establishedbyTheFloridaBar.
Custodial Credit Risk
Custodial creditrisk isthe riskthatin theeventofthefailure ofthecustodial entity, The Florida
Bar's deposits may not be returned to it. The Florida Bar's policy is that it will only hold
investment securities that are insured or registered and held by The Florida Bar, or its
designated agent, in the name ofThe Florida Bar. Investments held through itsagent, Morgan
- 18-
TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE4- INVESTMENTS(CONTINUED)
StanleySmithBarney, LLC haveSecuritiesInvestorProtectionCorporation(SIPC)coverage up
to $500,000percustomerforcash and securities. MorganStanleySmithBarney, LLCalsohas
purchased "Excess SIPC" protection abovethe SIPC limits. Thisexcesscoverage issubjectto
afirmwide capforMorgan Stanleyof$1 billion with no per-client limitforsecuritiesand a$1.9
million per-client limit for the cash portion ofany remaining shortfall. Investments in PIMCO
mutualfundsareheldbyathirdpartytrustcompany.
Foreign Currency Risk
Investments in international equity securities are limited to SEC-Registered, U.S. exchange
listed, U.S. dollar-denominated securities in foreign domiciled issuers. Investments in
international debt securities are limited to SEe-registered, U.S. dollar-denominated, U.S.
government backed securities issued by foreign governments. The Florida Bar invests in
international securities through American Depository Receipts (ADRs). ADRs represent
investments in shares of foreign companies traded on the U.S. financial markets and are
denominated in U.S. dollarsand, thus, are notexposedtoforeign currency risk. Investmentsin
foreign currency-denominated government bonds, any type offoreign corporate bond, orany
other type of foreign currency are not allovved. Securities of foreign companies traded on
foreignstockexchangesmaybe purchasedonlywiththewritten permissionofTheFloridaBar's
Investment Committee. Additionally, the investment policy approves the use ofmutual funds,
which mayincludeforeign securities, withthe understandingthatthe investmentpoliciesstated
in the mutual fund's prospectus supersede the guidelines set forth in The Florida Bar's
investmentpolicy.
DerivativeInstruments
As of June 30, 2010, the Florida Bar's investment policy states that investments in options,
derivatives and financial futures are prohibited in separately managed accounts. 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
prospectussupersedetheguidelinessetforth in TheFlorida Bar'sinvestmentpolicy.
Subsequent to June 30, 2010, the investment policy was modified to allow investments in
ExchangeTraded Funds (ETFs)and otheralternative investments notpreviouslyallovved such
ashedgefundsand managedfutures.
NOTE5- ACCOUNTSRECEIVABLE,NET
Thefollowing isasummaryofaccountsreceivable, net:
June 30, 2010 2009
Accountsreceivable $ 703,005 $ 592,066
Allowancefordoubtfulaccounts (24,900) (24,900)
Accountsreceivable, net $ 678,105 $ 567,166
- 19-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
Depreciation expense for the years ended June 30, 2010 and 2009 was $864,894 and
$826,822, respectively.
NOTE 7 - LONG-TERM LIABILITIES
Compensated Absences Payable
Compensated absences payable consisted of the following:
June 30, 2010 2009
Accrued vacation $ 1,447,838 $ 1,479,665
Accrued sick leave 967,355 927,518
Total compensated absences $ 2,415,193 $ 2,407,183
- 20-
TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE7- LONG-TERM LIABILITIES(CONTINUED)
Long-Term Debt
Thefollowing isasummaryoflong-termdebt:
June 30, 2010 2009
Renewal mortgage note payableto BankofAmerica in the amount
of $2,986,384 due on October 15, 2009. Monthly payments of
principal began on November 15, 1999 at $9,383 with annual
increases of$723 per month each November 15th based on a 15
yearamortizationwith aballoon paymentof$1,396,760atmaturity.
Interestwas payable monthly based on acontract rate equal tothe
London Interbank Offering Rate (LIBOR) plus 47 basis points.
However, the interest rate was swapped in a hedge transaction.
See Note 8below. The mortgagewas collateralized by real estate
owned by The Florida BarBuilding Corporation and guaranteed by
TheFloridaBar. $ - $1,451,635
Currentportion (1,451,635)
Long-termdebt, lesscurrentportion $ - $
Changes in Long-Term Liabilities
Changesinlong-termliabilitiesaresummarizedasfollows:
Long-termdebt
Compensatedabsences
DeferredrevenueforCSFrecovery
Totallong-termliabilities
Balance
July1, 2009
$1,451,635
2,407,183
1,692,991
$5,551,809
Additions
$ -
1,642,916
$1,642,916
Reductions
$ (1,451,635)
(1,634,906)
$ (3,086,541)
Balance
June 30, 2010
$
2,415,193
1,692,991
$ 4,108,184
NOTE8- DERIVATIVEDISCLOSURE- INTERESTRATESWAP
Objective ofthe interest rate swap_ In October 1999, The Florida Bar refinanced an 8.5%
fixed rate mortgage to a variable rate mortgage based on the LIBOR rate plus .47%. To
manage its interest rate exposure under the variable rate renewal mortgage note payable to
BankofAmerica, TheFloridaBarenteredintoahedgetransactiononOctober13, 1999toswap
its floating rate for a fixed rate through a 120 month interest rate swap provided by Bank of
America.
- 21 -
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 8 - DERIVATIVE DISCLOSURE -INTEREST RATE SWAP (CONTINUED)
Terms. The swap was for the notional amount of $2,986,384 which was equal to the principal
amount of the underlying variable rate debt. The notional amount declined each year as the
principal amount of the associated debt declined. The swap was entered into at the same time
that the debt was refinanced (October 1999). Under the swap, The Florida Bar paid the Bank of
America a contracted interest rate of 30-day LIBOR plus .470/0 and received a payment from
Bank of America based on the coupon rate of the swap which was 6.97%. The net effect of the
two contractual rates was an effective fixed rate of 7.440/0. The swap matured on October 15,
2009 and was an effective hedge for The Florida Bar.
NOTE 9 - 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
cases, rents received in The Bar Center Building Fund and other sources of revenue.
Regulation of the Practice of Law
Includes expenses incurred for Lawyer Regulation, Lawyer Advertising, Ethics, Continuing Legal
Education Rules (CLER), Membership Records and Certification.
Cost of Products and Services Provided to Members
Includes 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
Includes the expenses of the Public Information Department and The Florida Bar Journal and
News.
- 22-
TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE9- REVENUEANDEXPENSECLASSIFICATION(CONTINUED)
Administration
Includes board and officer expenses, the cost of the Executive Director's office, General
Counsel, Research, Planningand Evaluation,andliabilityandpropertyinsurance.
NOTE10- RETIREMENTPLANS
The 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
monthsofservice. The Plan is administered by The Florida BarRetirement Committee. The
Plan maybeamendedatanytimebyTheFlorida Bar. Employercontributionsarediscretionary
and are currently made for all eligible employees employed on December 31 based on a
formulawhichwas 15% and 13k ofcoveredcompensationfortheyearsendedJune30, 20010
and 2009, respectively, and 4.3k on covered compensation exceeding 800/0 of the Social
Securitywage basefortheyears ended June 30, 2010 and 2009. Theemployercontributions
areallocatedtoseparateparticipantaccountsandinvestedbytheTrusteeinthefundsselected
bytheemployeefromthoseoffered bythe PlanAdministrator. Participantaccountsvestbased
onthefollowing schedule:
Lessthan3years 00/0
3- 4years
40%
4- 5years 60
0
k
5-6years 800/0
greaterthan6years 1000/0
Forfeited contributions are held in a separate accountand are used to reduce future employer
contributions. Theplan hasbeenamendedtocomplywithall applicableFederaltaxlaws. The
pension contribution made equaled the contribution required during the years ended June 30,
2010 and 2009 forthe Plan years ended December 31, 2009 and 2008 and was $2,133,962
and$1,925,958,respectively.
TheFloridaBaralsohasadeferredcompensationplan. Theplanisforthebenefitofalleligible
employeeswhoelecttoparticipate.
NOTE11 - RETIREEPOSTEMPLOYMENTHEALTHBENEFITS
Plan Description. The Florida BarRetiree Health Plan (TFBRHP) is a single-employerdefined
benefit healthcare plan administered by The Florida Bar. TFBRHP provides health insurance
benefits to eligible employees at early retirement, disability orfull retirement. The Florida Bar
has the authority to establish and amend benefit provisions to TFBRHP. TFBRHP issues a
stand-alone financial report that includes the financial statements and required disclosures.
This report may be obtained by writing to The Florida Bar, 651 East Jefferson Street,
Tallahassee, Florida32399-2300.
- 23-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 11 - RETIREE POSTEMPLOYMENT HEALTH BENEFITS (CONTINUED)
Funding Policy. TFBRHP is funded through contributions made by The Florida Bar. The
contribution requirements are established and may be amended by The Florida Bar. Currently,
there are no required contributions by active or retired employees. The required contribution
from the Florida Bar is based on an actuarially determined percentage of total active payroll. For
fiscal years ended June 30,2010 and 2009, The Florida Bar contributed $268,980 and $52,700,
respectively, to the plan.
Annual OPEB Cost and Net OPEB Obligation. The Florida Bar's annual other postemployment
bene'fit (OPEB) cost (expense) is calculated based on the annual required contribution of the
employer (ARC), an amount actuarially determined in accordance with the parameters of GASB
Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is
projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years. Based on the January 1, 2010,
actuarial valuation, the ARC is 0.58% of active payroll payable for the calendar years 2010
through 2011. The following table shows the components of The Florida Bars annual OPEB
cost for the year, the amount actually contributed to the plan, and changes in The Florida Bar's
net OPEB obligation to TFBRHP:
Annual required contribution $ 69,265
Interest on net OPES obligation
Adjustments to annual required contribution 199,716
Annual OPES cost (expense) $268,981
Net OPES obligation - July 1, 2009 $
Annual OPES cost (expense) for 2010 268,981
Contributions made during FY 2010 (268,981)
Net OPES obligation - June 30, 2010 $
The Florida Bar's annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan, and the net OPEB obligation for 2009 and the preceding two years were as follows:
Annual Percentage of Annual OPEB Cost NetOPEB
Fiscal Year Ended OPEB Cost Contribtued Obligation
6/30/2008 $ 58,733 110.27k $ (6,033)
6/30/2009 58,733 90
0
k
6/30/2010 268,980 100%
- 24-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 11 - RETIREE POSTEMPLOYMENT HEALTH BENEFITS (CONTINUED)
Funded Status and Funding Progress. As of January 1, 2010, the most recent actuarial
valuation date, the plan was 820/0 funded. The actuarial accrued liability for benefits was
calculated to be $1,584,797 and the actuarial value of the assets was $1,293,906, resulting in a
funding deficit of $290,891. The covered payroll (annual payroll of active employees covered by
the plan) was $14,557,008, and the ratio of the UAAL to the covered payroll was 2.000/0.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Amounts
determined 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
based on the substantive plan (the plan as understood by the employer and the plan members)
and include the types of benefits provided at the time of each valuation and the historical pattern
of 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.
In the January 1, 2010 actuarial valuation, the projected unit credit actuarial cost method was
used. The actuarial assumptions included a 7.500/0 investment rate of return, which is the rate of
the expected long-term investment returns on plan assets and an annual healthcare cost trend
rate of 100/0 initially, reduced by decrements to an ultimate rate of 50/0 in the year 2016 and
beyond. Both rates included a 3% inflation assumption. As of the January 1, 2010 actuarial
valuation, TFBRHP had plan assets in trust solely to provide benefits to retirees and their
beneficiaries. The UAAL is being amortized as a level percentage of projected payroll on an
open basis. The remaining amortization period at January 1, 2010 was 30 years.
REQUIRED SUPPLEMENTARY INFORMATION
Schedule ofFunding Progress
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 0.000/0 $ 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%
- 25-
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 12 - LEASES
The Florida Bar is the lessee of office space under operating leases expiring in various years
through the year 2018, with escalation clauses.
The Florida Bar leases office space from its wholly-owned subsidiary, The Florida Bar Building
Corporation. The intercompany rental income and rental expense have been eliminated in
consolidation.
Future minimum rental payments are as follows:
Years ending June 30, Amount
2011 $ 628,178
2012 692,742
2013 714,702
2014 737,079
2015 760,227
Thereafter 1,532,195
Total minimum future rental payments $ 5,065,123
Total rental expense for the fiscal year ended June 30, 2010 and 2009 was $794, 110 and
$882,953, respectively.
The Florida Bar is also the lessor of certain office space in a building owned by The Florida Bar.
The space is rented to unrelated entities under operating leases expiring in various years
through the year 2014. Rental income for the fiscal years ended June 30, 2010 and 2009 was
$272,966 and $268,967, respectively.
Future minimum rental receipts are as follows:
Years ending June 30, Amount
2011 $ 279,790
2012 286,784
2013 293,818
2014 73,894
Total minimum future rental receipts $ 934,286
NOTE 13 - CONTINGENCIES
The Florida Bar is involved in several actions as defendant and/or co-defendant. The majority
of the actions are expected to be settled with little or no financial impact to The Florida Bar. An
accurate assessment of any significant liability is not determinable although management of The
Florida Bar believes that the possibility of any significant liability arising from current litigation is
extremely remote.
- 26-
The FloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE14- COMMITMENTS
The Florida Bar has contracted with various hotels orconvention centers to reserve facilities,
rooms, and food and beverage servicesforvarious meetingsand seminarsto be held through
fiscal year2015. IfTheFlorida Barshouldchoosetocancel thecontracts, liquidatingdamages
would be due to the hotels or convention centers. Generally, liquidating damages are
graduated based on the time between cancellation and the scheduled arrival date of the
meeting and are calculated based on a percentage ofanticipated revenues by the particular
hotelorconventioncenter.
The following isa schedule ofestimated liquidating damagesthatThe Florida Barwould incur
shouldtheycancelallthecontractsasofJune30, 2010:
Estimated
liquidating
Event damages
AnnualMeeting $ 157,324
BoardofGovernorsMeetings 106,702
Mid-YearMeetings 144,203
SectionMeetings 1,360,596
Continuing LegalEducationSeminars 21,896
Totalcommitment $ 1,790,721
NOTE15- DESIGNATEDFUNDBALANCES
TheFloridaBarhasdesignatedcertain netassetstobeusedforspecificprogrampurposes. As
of June 30, 2010 and 2009, the designated net assets were $12,645,267 and $12,751,829,
respectively.
NOTE16- RISKMANAGEMENTPROGRAMS
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 ofcoverage and
believes that current coverage is adequate. There were no significant reductions in insurance
coveragefromthepreviousyear.
- 27-
Supplementary Information
The Florida Bar and Subsidiaries
Consolidating Statement of Net Assets
Clients'
General Bar Center Security Certification Sections Eliminating Total
June 30, 2010 Fund Fund Fund Fund Fund Entries All Funds
Assets
Current assets
Cash and cash equivalents $ 15,342,782 $ 1,197,133 $ - $ - $ - $ - $ 16,539,915
Short-term investments 37,084,006 - - - - - 37,084,006
Accounts receivable, net 713,171 - - - - (35,066) 678,105
Due from other funds - 3,527,156 6,400,684 782,439 4,319,746 (15,030,025)
Prepaid expenses and other assets 599,863 1,587 - - - (25,117) 576,333
Total current assets 53,739,822 4,725,876 6,400,684 782,439 4,319,746 (15,090,208) 54,878,359
Capital assets, net
Land - 1,306,690 - - - - 1,306,690
Buildings and improvements - 9,615,208 - - - - 9,615,208
Landscaping and parking - 120,318 - - - - 120,318
Equipment and furnishings - 4,562,368 - - - - 4,562,368
Software - 1,231,757 - - - - 1,231,757
Software development in process 142,237 - - - - - 142,237
Construction in progress - 60,763 - - - - 60,763
Accumulated depreciation - (9,474,752) - - - - (9,474,752)
Total capital assets, net 142,237 7,422,352 - - - - 7,564,589
Restricted assets
CSF Recovery Receivable - - 1,692,991 - - - 1,692,991
Investment in The Florida Bar
Building Corporation 1,611,647 - - - - (1,611,647)
Total restricted assets 1,611,647 - 1,692,991 - - (1,611,647) 1,692,991
Total assets $ 55,493,706 $ 12,148,228 $ 8,093,675 $ 782,439 $ 4,319,746 $ (16,701,855) $ 64, 135,939
See Independent Auditors' Report.
- 28-
The Florida Bar and Subsidiaries
Consolidating Statement of Net Assets
(Continued)
Clients'
General Bar Center Security Certification Sections Eliminating Total
June 301 2010 Fund Fund Fund Fund Fund Entries All Funds
Liabilities and Net Assets
Current liabilities
Accounts payable
Claims payable
Accrued expenses
Due to other funds
Deferred revenues
Security deposits
Total current liabilities
$ 1,155,930
1,186,381
14,981,113
10,981,981
28,305,405
$
74,030
64,387
138,417
$ -
2,245,484
2,245,484
$ $
-
$ (35,066)
(48,912)
(14,981,113)
(25,117)
(15,090,208)
$ 1,185,251
2,245,484
1,137,469
10,981,981
48,913
15,599,098
Total non-current liablities
Non-current liabilities
Compensated absences payable
Deferred revenue for CSF recovery
2,415,193
-
2,415,193
1,692,991
1,692,991
2,415,193
1,692,991
4,108,184
Total liabilities 30,720,598 138,417 3,938,475 (15,090,208) 19,707,282
Net assets
Invested in capital assets, net of related debt 142,237 7,422,352 7,564,589
Restricted for scholarships 38,682 38,682
Unrestricted
Designated 412,070 2,975,812 4,155,200 782,439 4,319,746 12,645,267
Undesignated 24,180,119 24,180,119
Contributed capital - 1,611,647 - - - (1,611,647)
Total net assets 24,773,108 12,009,811 4,155,200 782,439 4,319,746 (1,611,647) 44,428,657
Total liabilities and net assets $ 55,493,706 $12,148,228 $ 8,093,675 $ 782,439 $ 4,319,746 $(16,701,855) $ 64,135,939
See Independent Auditors' Report.
- 29-
The Florida Bar and Subsidiaries
Consolidating Statement of Revenues, Expenses and Changes in Net Assets
Clients'
General Bar Center Security Certification Sections Eliminating Total
Year ended June 30,2010 Fund Fund Fund Fund Fund Entries All Funds
Operating revenues
Annual fees $ 22,559,757 $ $ $ $ $ $ 22,559,757
Other fees from members 3,682,484 1,203,021 1,237,741 6,123,246
Sales of products and services 7,366,033 8,379 2,232,860 9,607,272
Advertising 1,807,323 1,807,323
Young lawyers 691,921 691,921
Grants and other 352,236 1,050,689 26,613 - - (862,059) 567,479
Total operating revenues 36,459,754 1,050,689 26,613 1,211,400 3,470,601 (862,059) 41,356,998
Operating expenses
Regulation of the practice of law 15,079,840 1,287,374 (358,036) 16.009,178
Cost of products and services provided to members 7,806,058 3,001,772 (185,336) 10,622,494
Unauthorized practice of law 1,430,209 (33,957) 1,396,252
Public service programs 693,228 2,621,613 (16,459) 3,298,382
Communication with members and the public 4,093,119 (97,181) 3,995,938
Administration 2,100,160 (49,864) 2,050,296
Legislation 438,549 (10,412) 428,137
Young lawyers 590,068 (14,010) 576,058
Depreciation and amortization - 864,894 864,894
Other programs and costs 525,141 351,082 - - - (96,804) 779,419
Total operating expenses 32,756,372 1,215,976 2,621,613 1,287,374 3,001,772 (862.059) 40,021,048
Operating Income (loss) 3,703,382 (165,287) (2,595,000) (75,974) 468,829 1,335,950
Non-operatlng revenues (expenses)
Investment earnings 2,786,401 399,762 343,770 50,326 344,896 - 3,925,155
Interest expense - (35,855) - - - - (35,855)
Loss on disposal of capital assets - (44,951) - - - - (44,951)
Total non-operating revenues 2,786,401 318,956 343,770 50,326 344,896 - 3,844,349
Change In net assets 6,489,783 153,669 (2,251,230) (25,648) 813,725 5,180,299
Net assets, beginning of year 21,104,122 11,156,970 4,284,805 808,087 3,506,021 (1,611,647) 39,248,358
Transfers (to) from other funds (2,820,797) 699,172 2,121,625
Net assets, end of year $ 24,n3,108 $ 12,009,811 $ 4,155,200 $ 782,439 $ 4,319,746 $ $ 44,428,657
See Independent Auditors' Report.
- 30-
The Florida Bar and Subsidiaries
Consolidating Statement of Cash Flows
Clients'
General Bar Center Security Certification Sections Eliminating Total
Year ended June 30,2010 Fund Fund Fund Fund Fund Entries All Funds
Cash flows from operating activities:
Receipts from members, customers and other sources $ 39,604,649 $ 3,094,301 $ 26,613 $ 1,211,400 $ 3,470,601 $ (55,296) $ 47,352,268
Payments to employees, suppliers and other vendors (34,559,294) (391,621) (370,383) (1,261,726) (3,815,497) 55,296 (40,343,225)
Net cash provided by (used in) operating activities 5,045,355 2,702,680 (343,770) (50,326) (344,896) - 7,009,043
Cash flows from non-capital and related financing activities:
Reduction of debt - (1,451,635) - - - - (1 A51,635)
Interest paid - (35,855) - - - - (35,855)
Net cash (used in) non-capital and related financing
activities - (1 A87,490) - - - - (1 A87,490)
Cash flows from capital and related financing activities:
Acquisition of capital assets (142,237) (1,105,552) - - - - (1,247,789)
Net cash (used in) capital and related financing activities (142,237) (1,105,552) - - - - (1,247,789)
Cash flows from investing activities:
Redemption of investments 18,175,941 - - - - - 18,175,941
Purchase of investments, net of change in fair value (23,744,976) - - - - - (23,744,976)
Investment income 2,786,401 399,762 343,770 50,326 344,896 - 3,925,155
Net cash (used in) provided by investing activities (2,782,634) 399,762 343,770 50,326 344,896 - (1,643,880)
Increase in cash and cash equivalents 2,120,484 509,400 2,629,884
Cash and cash equivalents, beginning of year 13,222,298 687,733 13,910,031
Cash and cash equivalents, end of year $15,342,782 $ 1,197,133 $ $ $ $ $ 16,539,915
See Independent Auditors' Report.
- 31 -
TheFloridaBarandSubsidiaries
ConsolidatingStatementofCashFlows
(Continued)
Year ended June 30,2010
General
Fund
BarCenter
Fund
Clients'
Security
Fund
Certification
Fund
Sections
Fund
Eliminating
Entries
Total
AllFunds
Reconciliationofoperatingincome(loss)tonetcashprovided
by(usedin)operatingactivities:
Operatingincome(loss) $ 3,703,382
Adjustmentstoreconcileoperating income(loss)to
netcash provided by(used in)operatingactivities
Depreciation
Transfers(to)from otherfunds (2,820,797)
(Increase)decreasein:
Accountsreceivable, net (166,235)
Duefrom otherfunds
Prepaidexpenseandotherassets (215,781)
Increase(decrease)in:
Accountspayable (1,669,314)
Claimspayable
Accruedexpenses 184,046
Deferred revenues 3,311,130
Securitydeposits
Duetootherfunds 2,710,914
Compensatedabsencespayable 8,010
$ (165,287) $ (2,595,000) $ (75,974) $ 468,829 $ $ 1,335,950
(38,959)
7
864,894
699,172
1,344,440
(1,587)
2,165,838
2,121,625
(2,036,233) 25,648 (813,725)
(48,912)
1,224,660
55,296
1,479,870
(2,710,914)
8,010
(110,939)
864,894
(217,368)
(483,613)
2,165,838
135,134
3,311,130
7
Netcashprovided by(used in)operatingactivities $ 5,045,355 $ 2,702,680 $ (343,770) $ (50,326) $ (344,896) $ $ 7,009,043
Non-eashinvesting,capitalandfinancingactivities:
Changeinthefairvalueofinvestments $ 2,502,176 $ $ $ $ $ $ 2,502,176
Losson disposalofassets $ - $ 44,951 $ $ $ $ $ 44,951
Supplementalinformation:
Cash paidforinterest $ $ 35,855 $ $ $ $ $ 35,855
SeeIndependentAuditors'Report.
- 32-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Year ended June 30, 2010 Actual Budgeted (Unfavorable)
Revenues - budgetary basis
Annual fees
Investments
Authorized house counsel
Lawyer regulation
Florida registered paralegal program
Professional enhancement program
Division director - ethics, UPL and professionalism
Unlicensed practice of law
Ethics
Lawyer advertising
Professionalism
Multijurisdictional practice
Meetings and conventions
Addressing services
Continuing legal education program
Continuing legal education rule
Course approval center
Public service programs
Foreign legal consultants
Law office management advisory services
Member benefits program
Legal publications
Section administration
Young lawyers division
Committtee expenses
Public information
Journal
News
Directory
Building and grounds
Other revenue
G. Kirk Haas Fund (restricted revenue)
Total revenues - budgetary basis
$ 22,559,757
2,781,582
267,448
653,531
572,370
84,861
11,277
536,785
56,855
602,250
530,397
198,156
3,707,451
647,795
132,624
660,313
10,035
149,162
739,052
841,656
773,953
691,921
8,867
73,112
527,049
1,154,989
125,285
84,337
1,463
5,651
39,189,984
$ 22,777,945 $ (218,188)
680,000 2,101,582
283,500 (16,052)
730,600 (77,069)
642,000 (69,630)
113,525 (28,664)
199 (199)
2,560 8,717
50 (50)
507,950 28,835
52,429 4,426
525,000 77,250
553,422 (23,025)
175,000 23,156
4,160,952 (453,501)
559,018 88,777
158,720 (26,096)
800,925 (140,612)
9,625 410
167,381 (18,219)
612,263 126,789
922,680 (81,024)
781,971 (8,018)
605,207 86,714
9,000 (133)
134,313 (61,201 )
615,837 (88,788)
1,489,936 (334,947)
133,137 (7,852)
68,900 15,437
10,000 (8,537)
1,000 4,651
38,285,045 904,939
See Independent Auditors' Report.
- 33-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2010 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
General administration
Staff and office expense
Travel
Internal service and administration
Other operating expenses
746,808
50,245
3,467
27,710
Total general administration 828,230
Legislation
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Total legislation
102,178
258,226
1,841
52,481
1,132
415,858
Authorized house counsel
Staff and office expense 7,570
Internal service and administration 988
Other operating expenses 1,380
Total authorized house counsel 9,938
899,746 152,938
63,591 13,346
2,798 (669)
33,654 5,944
999,789 171 ,559
224,203 (12,663)
28,083 845
19,980 5,934
480,991 99,954
753,257 94,070
Board and officer
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total board and officer
236,866
27,238
14,046
381,037
659,187
97,586 (4,592)
261,737 3,511
3,621 1,780
50,722 (1,759)
1,562 430
415,228 (630)
9,810 2,240
7,692 6,704
1,403 23
18,905 8,967
General counsel
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Total general counsel
146,346
286,790
1,983
3,296
1,119
439,534
Division director - legal
Staff and office expense (15,713)
Travel 13,999
Internal service and administration 1,414
Other operating expenses 292
Total division director - legal (8)
183,042 36,696
700,790 414,000
3,621 1,638
7,927 4,631
399 (720)
895,779 456,245
(28,649) (12,936)
25,863 11,864
2,286 872
500 208
8
See Independent Auditors' Report.
- 34-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2010 Actual BUdgeted (Unfavorable)
Expenses - budgetary basis
Attorney Consumer Assistance Program
Staff and office expense
Internal service and administration
Other operating expenses
1,257,888
145,235
45,787
1,344,681
145,200
44,405
86,793
(35)
(1,382)
Total attorney consumer assistance program 1,448,910 1,534,286 85,376
Lawyer regulation
Staff and office expense 8,862,041 9,307,657 445,616
Travel 147,432 163,286 15,854
Internal service and administration 1,215,934 1,469,741 253,807
Other operating expenses 345,442 402,200 56,758
Total lawyer regulation 10,570,849 11,342,884 772,035
Professional enhancement program
Staff and office expense 23,534 32,745 9,211
Travel 4,890 14,042 9,152
Internal service and administration 3,489 5,176 1,687
Other operating expenses 2,491 2,731 240
Total professional enhancement program 34,404 54,694 20,290
Division director - ethics, UPL and professionalism
Staff and office expense
Travel
Less cost dist.
Internal service and administration
Other operating expenses
68,092
6,331
(82,082)
9,459
448
109,100
7,639
(126,793)
10,030
24
41,008
1,308
(44,711 )
571
(424)
Total division director - ethics, UPL and professionalism 2,248 (2,248)
Unlicensed practice of law
Staff and office expense 1,203,151 1,292,426 89,275
Travel 28,753 51,664 22,911
Internal service and administration 180,125 170,424 (9,701 )
Other operating expenses 38,010 56,977 18,967
Total unlicensed practice of law 1,450,039 1,571,491 121,452
Lawyer assistance program/substance abuse
Staff and office expense 12,364 3,250 (9,114)
Internal service and administration 52,351 48,632 (3,719)
Other operating expenses 462,000 462,000
Total lawyer assistance program/substance abuse 526,715 513,882 (12,833)
See Independent Auditors' Report.
- 35-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
Year ended June 30, 2010
Expenses - budgetary basis
Ethics
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total ethics
Lawyer advertising
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Total lawyer advertising
Records management
Staff and office expense
Internal service and administration
Total records management
Rules
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total rules
Ethics/advertising staff pool
Staff and office expense
Total ethics/advertsising staff pool
Professionalism
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Total professionalism
Multijurisdictional practice
Staff and office expense
Internal service and administration
Other operating expenses
Total multijurisdictional practice
Florida Registered Paralegal
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total Florida Registered Paralegal
Actual
690,501
3,743
85,273
3,335
782,852
652,815
15,475
3,296
75,824
6,370
753,780
157,688
18,041
175,729
96,817
733
10,984
19
108,553
72
72
456,241
24,140
22,415
61,314
9,447
573,557
20,231
2,233
9
22,473
48,683
2,257
6,322
6,237
63,499
See Independent Auditors' Report.
- 36-
(Continued)
Variance
Favorable
Budgeted (Unfavorable)
698,340 7,839
4,741 998
82,816 (2,457)
7,354 4,019
793,251 10,399
720,105 67,290
38,074 22,599
6,845 3,549
83,763 7,939
12,683 6,313
861,470 107,690
167,000 9,312
17,456 (585)
184,456 8,727
95,474 (1,343)
733
32,817 21,833
800 781
129,824 21,271
(72)
(72)
467,567 11,326
26,080 1,940
25,721 3,306
69,470 8,156
29,411 19,964
618,249 44,692
20,971 740
4,482 2,249
215 206
25,668 3,195
58,554 9,871
7,108 4,851
9,117 2,795
19,760 13,523
94,539 31,040
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2010 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
Shipping and receiving
Staff and office expense
Internal service and administration
Other operating expenses
Less cost distribution
135,187
(4,185)
(122,564)
Total shipping and receiving 8,438
Building and grounds
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Less cost distribution
1,678,432
2,323
12
1
(1,596,440)
Total building and grounds 84,328
Meetings and conventions
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Less cost distribution
358,630
2,798
24,213
150,464
361,521
(42,820)
Total meetings and conventions 854,806
Information systems
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Less cost distribution
2,913,086
258,335
4,398
24
72,282
(3,185,649)
Total information systems 62,476
Human resource management
Staff and office expense 243,167
Travel 2,181
Internal service and administration 22,533
Other operating expenses 14,336
Less cost distribution (282,217)
Total human resource management
160,178 24,991
(4,500) (315)
57 57
(155,735) (33,171)
(8,438)
1,906,911 228,479
3,021 698
1,231 1,219
1
(1,842,264) (245,824)
68,900 (15,428)
342,079 (16,551)
2,431 (367)
33,631 9,418
176,988 26,524
447,490 85,969
(22,697) 20,123
979,922 125,116
3,193,185 280,099
356,000 97,665
23,292 18,894
13 (11 )
78,638 6,356
(3,570,395) (384,746)
80,733 18,257
279,004 35,837
2,458 277
35,556 13,023
24,083 9,747
(341,101 ) (58,884)
See Independent Auditors' Report.
- 37-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2010 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
Division director - programs
Staff and office expense
Travel
Internal service and administration
Other operating expenses
(8,840)
6,955
1,847
49
(7,966)
5,811
1,962
193
874
(1,144)
115
144
Total division director - programs 11 (11 )
Continuing legal education programs
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total continuing legal education programs
788,744
66,155
829,318
1,733,815
3,418,032
872,315
85,214
1,043,295
1,814,629
3,815,453
83,571
19,059
213,977
80,814
397,421
Continuing legal education rule
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total continuing legal education rule
244,749
1,863
59,592
22,193
328,397
268,349
1,855
74,063
26,728
370,995
23,600
(8)
14,471
4,535
42,598
Course approval center
Staff and office expense
Internal service and administration
Other operating expenses
Total course approval center
117,695
13,266
1,662
132,623
124,797
13,311
2,548
140,656
7,102
45
886
8,033
Legal education and specialization staff pool
Staff and office expense
Total legal education and specialization staff pool
(5)
(5)
5
5
Professional development staff pool
Staff and office expense
Internal service and administration
Other operating expenses
Total professional development staff pool
(1,451 )
551
895
(5)
(2,690)
1,485
1,205
(1,239)
934
310
5
Public service programs
Staff and office expense
Travel
Internal service and administration
Other operating expenses
367,427
1,024
75,178
255,809
398,072
2,101
88,445
284,621
30,645
1,077
13,267
28,812
Total public service programs 699,438 773,239 73,801
See Independent Auditors' Report.
- 38-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2010 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
Foreign legal consultants
Staff and office expense
Internal service and administration
Other operating expenses
6.095
721
73
4.150
494
186
(1,945)
(227)
113
Total foreign legal consultants 6.889 4,830 (2,059)
Print shop
Staff and office expense 365.121 470,382 105.261
Internal service and administration 56 28 (28)
Other operating expenses 63,783 94.781 30.998
Less cost distribution (380,811 ) (565,191 ) (184,380)
Total print shop 48,149 (48,149)
Law office management advisory services
Staff and office expense 229.372 357.838 128,466
Travel 36.321 47,564 11.243
Internal service and administration 33.837 51,070 17.233
Other operating expenses 15,930 23,854 7.924
Total law office management advisory services 315,460 480,326 164.866
Member benefits program
Staff and office expense 66.186 75.954 9,768
Internal service and administration 29,722 28,609 (1.113)
Other operating expenses 200,313 196,935 (3,378)
Total member benefits program 296,221 301.498 5,277
Legal publications
Staff and office expense 1,010,557 1,106,261 95.704
Travel 13.744 25.534 11,790
Internal service and administration 129,676 146.908 17.232
Other operating expenses 42,934 60.515 17,581
Total legal publications 1.196,911 1,339,218 142,307
Section administration
Staff and office expense 586.914 538,901 (48.013)
Travel 1.819 4.096 2.277
Internal service and administration 409.613 461.713 52.100
Other operating expenses 1,216 1.767 551
Total section administration 999,562 1.006,477 6.915
Young lawyers division
Staff and office expense 57.516 46,090 (11.426)
Travel 6.319 6.319
Internal service and administration 68.887 65,446 (3,441 )
Other operating expenses 462.441 482.801 20.360
Total young lawyers division 595.163 600.656 5.493
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, 2010 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
Committee
Staff and office expense
Travel
Internal service and administration
Other operating expenses
69,005
6,940
26,719
37,082
Total committee 139,746
Public information
Staff and office expense 694,578
Contract services 102,673
Travel 48,683
Internal service and administration 381,344
Other operating expenses 97,463
Total public information
Office systems
Staff and office expense
. Internal service and administration
Other operating expenses
Less cost distribution
Total office systems
"Journal" - "News" staff pool
Staff and office expense
Travel
Internal service and administration
Other operating expenses
1,324,741
468,118
264
20
(415,365)
53,037
(33,511 )
2,561
26,705
4,247
74,571
9,529
16,316
39,877
140,293
5,566
2,589
(10,403)
2,795
547
755,787 61,209
106,417 3,744
62,033 13,350
503,384 122,040
173,934 76,471
1,601,555 276,814
519,196 51,078
2,027 1,763
147 127
(521,370) (106,005)
(53,037)
(48,247) (14,736)
4,571 2,010
33,496 6,791
10,180 5,933
Total "Journal" - "News" staff pool 2 (2)
"Journal"
Staff and office expense 252,195 294,096 41,901
Travel 1,434 2,475 1,041
Internal service and administration 84,545 90,801 6,256
Other operating expenses 498,336 566,445 68,109
Less cost distribution (7,125) (8,825) (1,700)
Total "Journal" 829,385 944,992 115,607
"News"
Staff and office expense 485,938 551,701 65,763
Travel 10,156 14,681 4,525
Internal service and administration 163,482 179,488 16,006
Other operating expenses 1,173,464 1,312,229 138,765
Less cost distribution (188,890) (162,291 ) 26,599
Total "News" 1,644,150 1,895,808 251,658
See Independent Auditors' Report.
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The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Year ended June 30, 2010 Actual Budgeted
Variance
Favorable
(Unfavorable)
Expenses - budgetary basis
Directory
Staff and office expense
Internal service and administration
Other operating expenses
Less cost distribution
Total Directory
29,634
33,430
274,787
(1,500)
336,351
46,963
38,740
322,619
408,322
17,329
5,310
47,832
1,500
71,971
Finance and records
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Less cost distribution
Total finance and records
Research, planning and evaluation
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
1,841,157
41,737
8,862
310,301
326,039
(1,534,401 )
993,695
167,014
10,000
4,403
1,084
9,416
Total research, planning and evaluation 191,917
Division director - administration
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Less cost distribution
145,044
59
5,219
189
(150,511 )
1,904,148 62,991
72,890 31,153
8,353 (509)
306,326 (3,975)
322,889 (3,150)
(1,777,790) (243,389)
836,816 (156,879)
169,018 2,004
11,839 1,839
5,358 955
1,661 577
11,588 2,172
199,464 7,547
151,410 6,366
100 41
3,932 (1,287)
410 221
(155,852) (5,341 )
Total division director - administration
G. Kirk Haas Fund (restricted fund) 2,500 2,500
Total expenses 33,428,837 36,800,305 3,371,468
Excess of revenues over expenses - bUdgetary basis $ 5,761,147 $ 1,484,740 $ 4,276,407
See Independent Auditors' Report.
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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 Assets
Excess of
Revenues
Operating Over (Under)
Year ended June 30, 2010 Revenues Expenses Expenses
Totals on budgetary basis $ 39,189,984 $ 33,428,837 $ 5,761,147
Add:
Subsidiary operations
Florida Lawyers Association for the Maintenance of
Excellence, Inc. 4,819 26,251 (21,432)
The Florida Attorneys Charitable Trust 51,352 456 50,896
Less:
Adjustments for financial statement presentation purposes
Net change in the fair value of investments (2,786,401) (2,786,401 )
Budgeted items treated as interfund transfers for basic
financial statement purposes
Depreciation (699,172) 699,172
Total operating revenues, expenses and income per Consolidating
Schedule of Statement of Revenues, Expenses and Changes in
Net Assets $ 36,459,754 $ 32,756,372 $ 3,703,382
See Independent Auditors' Report.
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The Florida Bar and Subsidiaries
Clients' Security Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Year ended June 30, 2009 Actual Budget (Unfavorable)
Operatingrevenues
Annualcontribution* $ 2,121,625 $ 2,121,625 $
Recoveries 26,613 16,900 9,713
Totaloperatingrevenues 2,148,238 2,138,525 9,713
Operatingexpenses
Staffandofficeexpense 147,899 174,151 26,252
Travel 8,055 8,631 576
Internalserviceand administration 89,133 103,352 14,219
Claims paid 2,370,676 2,326,831 (43,845)
Otheroperatingexpenses 5,850 8,660 2,810
Totaloperatingexpenses 2,621,613 2,621,625 12
Operatingincome(loss) (473,375) (483,100) 9,725
Non-operatingrevenues
Investmentearnings 343,770 100,000 243,770
Total non-operatingrevenues 343,770 100,000 243,770
Changein netassets $ (129,605) $ (383,100) $ 253,495
* Theannualcontributionfromthegeneralfund istreatedasabudgeted revenueitemonthis
statement. However,itistreatedasan interfundtransferinthebasicfinancial statementssection
ofthisreport. Thedifferencebetweenthebudgetbasisstatementandthebasicfinancial statement
is reconciledasfollows:
Changein netassets- budgetarybasis $ (129,605)
Less: annualcontributiontreatedasan interfund
transferonthebasicfinancialstatements (2,121,625)
Changein netassetsperConsolidatingScheduleof
StatementofRevenues, ExpensesandChangesin
NetAssets $ (2,251,230)
SeeIndependentAuditors'Report.
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The Florida Bar and Subsidiaries
Certification Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Year ended June 30, 2009 Actual Budget (Unfavorable)
Operating revenues
Member Fees $ 1,203,021 $ 1,088,412 $ 114,609
Sales 8,379 7,800 579
Total operating revenues 1,211,400 1,096,212 115,188
Operating expenses
Staff and office expense 901,912 985,628 83,716
Contract services 23,232 32,845 9,613
Travel 47,992 64,915 16,923
Internal service and administration 145,142 151,966 6,824
Other operating expenses 169,096 213,396 44,300
Total operating expenses 1,287,374 1,448,750 161 ,376
Operating income (loss) (75,974) (352,538) 276,564
Non-operating revenues
Investment earnings 50,326 15,000 35,326
Total non-operating revenues 50,326 15,000 35,326
Change in net assets per Consolidating Schedule of
Statement of Revenues, Expenses and Changes in
Net Assets $ (25,648) $ (337,538) $ 311,890
See Independent Auditors' Report.
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The Florida Bar and Subsidiaries
Sections Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Year ended June 30, 2010 Actual Budgeted (Unfavorable)
Revenues - budgetary basis
Administrative law $ 34,170 $
Appellate practice and advocacy 102,337
Business law 453,751
City, county, and local government 78,938
Council of sections 6,512
Criminal law 102,235
Elder law 109,159
Entertainment, arts and sports law 30,810
Environmental and land use law 79,760
Equal opportunity law 2,968
Family law 539,384
General practice 122,555
Government lawyers 23,718
Health law 49,681
International law 154,191
Labor and employment law 78,812
Out-of-state practice 26,013
Public interest law 11,293
Real property, probate and trust law 1,056,085
Tax law 255,974
Trial lawyers 424,017
Workers' compensation 73,134
23,854 $ 10,316
58,472 43,865
355,790 97,961
57,357 21,581
6,150 362
71,733 30,502
126,664 (17,505)
37,906 (7,096)
79,100 660
3,900 (932)
338,427 200,957
98,089 24,466
18,603 5,115
30,584 19,097
125,767 28,424
91,171 (12,359)
16,772 9,241
8,779 2,514
1,142,904 (86,819)
282,729 (26,755)
271,923 152,094
81,489 (8,355)
Total revenues - budgetary basis 3,815,497 3,328,163 477,018
See Independent Auditors' Report.
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The Florida Bar and Subsidiaries
Sections Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2010 Actual Budgeted (Unfavorable)
Operating expenses - budgetary basis
Administrative law 17,748 45,184 27,436
Appellate practice and advocacy 68,848 70,653 1,805
Business law 411,208 453,990 42,782
City, county, and local government 49,398 71,735 22,337
Council of sections 3,888 6,207 2,319
Criminal law 61,574 95,289 33,715
Elder law 133,687 154,783 21,096
Entertainment, arts and sports law 24,494 43,143 18,649
Environmental and land use law 72,108 124,650 52,542
Equal opportunity law 2,445 5,581 3,136
Family law 352,142 382,964 30,822
General practice 77,522 113,201 35,679
Government lawyers 17,181 26,906 9,725
Health law 41,194 60,502 19,308
International law 59,762 133,973 74,211
Labor and employment law 51,092 101,550 50,458
Out-of-state practice 22,489 33,134 10,645
Public interest law 5,609 8,888 3,279
Real property, probate and trust law 940,682 1,293,064 352,382
Tax law 233,233 313,311 80,078
Trial lawyers 280,145 232,849 (47,296)
Workers' compensation 75,323 109,369 34,046
Total expenses - budgetary basis 3,001,772 3,880,926 851,718
Change in net assets per the Consolidating Schedule of
Statement of Revenues, Expenses and Changes in Net
~ ~ $ 813,725 $ (552,763) $ 1,328,736
See Independent Auditors' Report.
- 46-
, '" ...
Other Reports
Can. Riggs &Ingrlm. UC
1713 Mahan Drive
Tallahasseo,FL 32308
(850)878-8777
(850)878-2344 (fax'
WtNW crlepa c.om
REPORTONINTERNALCONTROLOVERFINANCIALREPORTINGANDON
COMPUANCEANDOTHERMAneRSBASEDONANAUDITOFFINANCIAL
STATEMENTSPERFORMEDINACCORDANCEWITH
GOVERNMENTAUDITING STANDARDS
BoardofGovernors
TheFloridaBar
Tallahassee, Florida
Wehave audited the basicfinancial statements ofThe Florida Barand Subsidiaries asof
andfortheyearended June30, 2010, andhaveissuedourreportthereondated November
3,2010. Weconductedourauditinaccordancewithauditing standardsgenerallyaccepted
intheUnitedStatesofAmericaandthestandardsapplicabletofinancial auditscontained in
Government Auditing Standards, issuedbytheComptrollerGeneraloftheUnitedStates.
InternalControlOverFinancialReporting
In planning and performing our audit, we considered The Florida Bar and Subsidiaries'
internal control overfinancial reporting as a basisfordesigning ourauditing proceduresfor
thepurposeofexpressingouropinionsonthefinancialstatements,butnotforthepurposeof
expressing an opinion on the effectiveness ofThe Florida Bar and Subsidiaries' internal
control over financial reporting. Accordingly, we do not express an opinion on the
effectivenessofTheFloridaBarandSubsidiaries'internalcontroloverfinancialreporting.
A control deficiency exists when the design or operation of a control does not allow
managementoremployees, in the normal course ofperforming theirassigned functions, to
prevent or detect misstatements on a timely basis. A significant deficiency is a control
deficiency,orcombinationofcontroldeficiencies,thatadverselyaffectsTheFlorida Barand
Subsidiaries' abilityto initiate, authorize, record, process, orreportfinancial data reliably in
accordance with generally accepted accounting principles such that there is more than a
remote likelihood that a misstatement of The Florida Bar and Subsidiaries' financial
statementthatismorethaninconsequentialwill notbepreventedordetectedbyTheFlorida
BarandSubsidiaries'internalcontrol.
Amaterialweaknessisasignificantdeficiency,orcombinationofsignificantdeficiencies,that
results in more than a remote likelihood that a material misstatement of the financial
statementswill notbe prevented ordetected byThe Florida Barand Subsidiaries' internal
control.
- 47-
Board of Governors
The Florida Bar
Our consideration of internal control over financial reporting was for the limited purpose described
in the first paragraph of this section and would not necessarily identify all deficiencies in internal
control that might be significant deficiencies or material weaknesses. We did not identify any
deficiencies in internal control over financial reporting that we consider to be material weaknesses,
as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether The Florida Bar and Subsidiaries'
financial statements are free of material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance that are required to be reported under Government Auditing
Standards.
This report is intended solely for the information and use of the Board of Governors and
management and is not intended to be and should not be used by anyone other than these
specified parties.
~ / ~ J ~ / I-L C
Tallahassee, Florida
November 3, 2010
- 48-