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TheFloridaBarandSubsidiaries

FinancialStatementsand
SupplementalInformation
June30,2011 and2010
The Florida Bar and Subsidiaries
Table of Contents
June 30, 2011 and 2010
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 - 28
Supplementary Infonnation
Consolidating Statement of Net Assets as of June 30, 2011. 29 - 30
Consolidating Statement of Revenues, Expenses and Changes
in Net Assets for the year ended June 30, 2011 31
Consolidating Statement of Cash Flows for the year ended
June 30, 2011. 32 - 33
General Fund Schedule of Budgeted and Actual Revenues and Expenses
for the year ended June 30, 2011. 34 - 42
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, 2011. 43
Clients' Security Fund Schedule of Budgeted and Actual Revenues and
Expenses for the year ended June 30, 2011. 44
Certification Fund Schedule of Budgeted and Actual Revenues and Expenses
for the year ended June 30, 2011. 45
Sections Fund Schedule of Budgeted and Actual Revenues and Expenses for the
year ended June 30, 2011. 46 - 47
Other Reports
Report on Intemal Control Over Financial Reporting and On Compliance and
Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards 48-49
Carr, Ritga& 'I.r_. UC
1713 Mahan Drive
Tallahassee. FL 32308
(850) 878-8777
(850) 878-2344 (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
years ended June 30, 2011 and 2010, 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, 2011 and 2010, 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 9, 2011, 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
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis on pages 3 through 7 be 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 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 financial statements, and other
knowledge we obtained during our audit of the basic 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.
Our audits were conducted 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 is the responsibility of management and was
derived from and relates directly to the underlying accounting and other records used to prepare
the financial statements. The 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 financial statements or to the financial
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the information is fairly
stated in all material respects in relation to the financial statements as a whole.
I-- L C.

November 9, 2011
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 91,000 members. Headquartered in Tallahassee, The Florida Bar is a unified state bar by
rule of the Supreme Court of Florida. Membership in The Florida Bar is a necessary component of
Supreme Court of Florida regulation of all lawyers licensed to practice law in Florida (Article IV,
Section 15, Florida Constitution). The foundation for the organization is built on a philosophy of
equity and ethics. Through its programs and services, the Bar supports this philosophy with four
pillars that function as the mission of The Florida Bar: providing public service, protecting rights,
promoting professionalism and pursuing justice.
Overview of the Financial Statements
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. The supplementary information includes consolidating statements and comparisons of
actual results to budgeted results. The basic consolidated financial statements present the
consolidated financial position, results of operations, and cash flows of the Florida Bar and its
subsidiaries. The Florida Bar performs tvvo overall activities as the statewide regulator of the
practice of law and the professional association of lawyers. Its activities are accounted for as a
proprietary type enterprise fund because it charges fees to provide its services similar to a
business enterprise.
The Statement of Net Assets includes all of The Florida Bar's assets and liabilities. The net assets
are the difference between The Florida Bar's assets and liabilities. The Statement of Revenues,
Expenses, and Changes in Net Assets include all of The Florida Bar's revenues and expenses
regardless of when the cash is received or paid. The change in net assets 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.
Summary of Operations
At June 30, 2011 and 2010, The Florida Bar had $71,075,955 and $64,135,939, respectively in
total assets. Of this amount $60,432,750 and $53,623,921 was held in cash and investments and
$9,555,406 and $7,564,589 was invested in capital assets at June 30, 2011 and 2010,
respectively. The primary liability at June 30, 2011 and 2010 was deferred revenue of $11,375,450
and $10,981,981, respectively, resulting from advance collection of member fees and prepayments
for Continuing Legal Education registrations. Our net assets were $51,783,307 and $44,428,657
at June 30,2011 and 2010, respectively.
These amounts are in line with the prior year's balances given the current changes in net assets.
The original operating budgets for the General Fund (excluding the wholly-owned subsidiary and
controlled entities) for the years ended June 30, 2011 and 2010 approved by the Florida Supreme
Court, planned on an increase in net assets of $ 340,381 and $21,760, respectively. After Board of
Governor amendments, the planned decrease became ($1,128, 194) and ($636,885), respectively.
See the Independent Auditors' Report.
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The Florida Bar and Subsidiaries
Management's Discussion and Analysis
General Fund actual operations resulted in a change in net assets of $8,481,783 and $6,489,783,
respectively. The increase in net assets for both years resulted primarily from the effects of a
favorable investment climate. Included in the supplemental information is an actual to budget
comparison for each department.
For the year ended June 30, 2011 and 2010, The Florida Bar's budget funded most departments at
a continuation level.
CONDENSED CONSOLIDATED FINANCIAL INFORMATION
CONDENSED CONSOUDATED STATEMENTS OF NET ASSETS
June 30, 2011 2010 Change
Assets
Current assets $ 61,520,549 $ 54,878,359 $ 6,642,190
Capital assets, net 9,555,406 7,564,589 1,990,817
Restricted assets 1,692,991 (1,692,991 )
Total assets $ 71,075,955 $ 64,135,939 $ 6,940,016
Liabilities
Current liabilities $ 16,975,110 $ 15,599,098 $ 1,376,012
Other liabilities 2,317,538 4,108,184 (1 ,790,646)
Total liabilities 19,292,648 19,707,282 (414,634)
Net assets
Invested in capital assets, net of related debt 9,555,406 7,564,589 1,990,817
Restricted for scholarships 45,921 38,682 7,239
Unrestricted 42,181,980 36,825,386 5,356,594
Total net assets 51,783,307 44,428,657 7,354,650
Total liabilities and net assets $ 71,075,955 $ 64,135,939 $ 6,940,016
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, 2010 2009 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
For more detailed information, see the accompanying Consolidated Statements of Net Assets.
CONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
June 30, 2011 2010 Change
Operating revenues $ 42,477,814 $ 41 ,356,998 $ 1,120,816
Operating expenses (40,982,582) (40,021,048) (961,534)
Net operating revenues 1,495,232 1,335,950 159,282
Non-operating revenues 5,917,596 3,925,155 1,992,441
Non-operating expenses (58,178) (80,806) 22,628
Net non-operating revenues 5,859,418 3,844,349 2,015,069
(Decrease) Increase in net assets 7,354,650 5,180,299 2,174,351
Net assets, beginning 44,428,657 39,248,358 5,180,299
Net assets, ending $ 51,783,307 $ 44,428,657 $ 7,354,650
See the Independent Auditors' Report.
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TheFloridaBarandSubsidiaries
Management'sDiscussionandAnalysis
CONDENSEDCONSOLIDATEDSTATEMENTSOFREVENUES, EXPENSES
ANDCHANGESINNETASSETS
June 3D, 2010 2009 Change
Operatingrevenues $ 41,356,998 $ 41,102,989 $ 254,009
Operatingexpenses (40,021,048) (41,761,770) 1,740,722
Netoperating revenues 1,335,950 (658,781) 1,994,731
Non-operatingrevenues 3,925,155 3,925,155
Non-operatingexpenses (80,806) (4,578,366) 4,497,560
Netnon-operatingrevenues 3,844,349 (4,578,366) 8,422,715
(Decrease)Increaseinnetassets 5,180,299 (5,237,147) 10,417,446
Netassets, beginning 39,248,358 44,485,506 (5,237,148)
Netassets,ending $ 44,428,657 $ 39,248,359 $ 5,180,298
For more detailed information, see the accompanying Consolidated Statements ofRevenues,
Expenses,andChangesin NetAssets.
CAPITALASSETS
TheFloridaBarhadinvestedthefollowinginCapitalAssets:
June 3D, 2011 2010 Change
Land $ 1,306,690 $ 1,306,690 $
Buildingandimprovements 10,728,573 9,615,208 1,113,365
Landscapingandparking 120,318 120,318
Equipmentandfurnishings 4,684,035 4,562,368 121,667
Software 1,680,573 1,231,757 448,816
Softwareindevelopment 817,692 142,237 675,455
Constructioninprogress 14,683 60,763 (46,080)
Total, priortodepreciation 19,352,564 17,039,341 2,313,223
Accumulateddepreciation (9,797,158) (9,474,752) (322,406)
Netcapitalassets $ 9,555,406 $ 7,564,589 $ 1,990,817
SeetheIndependentAuditors' Report.
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The Florida Bar and Subsidiaries
Management's Discussion and Analysis
CAPITAL ASSETS
June 3D, 2010 2009 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
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.
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
2011 2010
Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Prepaid expenses and other assets
Total current assets
$ 14,502,362
45,930,388
494,844
592,955
61,520,549
$ 16,539,915
37,084,006
678,105
576,333
54,878,359
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
10,728,573
120,318
4,684,035
1,680,573
817,692
14,683
(9,797,158)
9,555,406
1,306,690
9,615,208
120,318
4,562,368
1,231,757
142,237
60,763
(9,474,752)
7,564,589
Restricted assets
Client Security Fund recovery receivable 1,692,991
Total assets $ 71,075,955 $ 64,135,939
Liabilities and Net Assets
Current liabilities
Accounts payable
Client Security Fund claims payable
Accrued expenses
Deferred revenues
Security deposits
Total current liabilities
$ 1,745,073
2,568,189
1,237,482
11,375,450
48,916
16,975,110
$ 1,185,251
2,245,484
1,137,469
10,981,981
48,913
15,599,098
Non-current liabilities
Compensated absences payable
Deferred revenue for CSF recovery
Total non-current liabilities
2,317,538
2,317,538
2,415,193
1,692,991
4,108,184
Total liabilities 19,292,648 19,707,282
Net assets
Invested in capital assets, net of related debt
Restricted for scholarships
Unrestricted
Total net assets
9,555,406
45,921
42,181,980
51,783,307
7,564,589
38,682
36,825,386
44,428,657
Total liabilities and net assets $ 71,075,955 $ 64,135,939
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
Years ended June 30, 2011 2010
Operating revenues
Annual fees $ 23,094,112 $ 22,559,757
Other fees from members 6,253,705 6,123,246
Sales of products and services 9,512,668 9,607,272
Advertising 1,730,692 1,807,323
Young lawyers 903,972 691,921
Grants and other 982,665 567,479
Total operating revenues 42,477,814 41,356,998
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
16,534,580
10,218,814
1,440,549
3,609,484
3,589,399
2,407,751
720,736
685,739
931,560
843,970
40,982,582
16,009,178
10,622,494
1,396,252
3,298,382
3,995,938
2,050,296
428,137
576,058
864,894
779,419
40,021,048
Operating income 1,495,232 1,335,950
Non-operating revenues (expenses)
Investment earnings
Interest expense
Loss on disposal of capital assets
Total non-operating revenues (expenses)
5,917,596
(58,178)
5,859,418
3,925,155
(35,855)
(44,951 )
3,844,349
Change in net assets 7,354,650 5,180,299
Total net assets, beginning of year 44,428,657 39,248,358
Total net assets, end of year $ 51,783,307 $ 44,428,657
See accompanying notes to the consolidated financial statements.
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....
The Florida Bar and Subsidiaries
Consolidated Statements of Cash Flows
Years ended June 30, 2011 2010
Cash flows from operating activities:
Receipts from members, customers and other sources
Payments to employees, suppliers and other vendors
Net cash provided by operating activities
$ 43,098,254
(39,230,201 )
3,868,053
$ 47,352,268
(40,343,225)
7,009,043
Cash flows from non-capital and related financing activities:
Reduction of debt
Interest paid
Net cash (used in) non-capital and related financing activities
(1,451,635)
(35,855)
(1,487,490)
Cash flows from capital and related financing activities:
Acquisition of capital assets
Net cash (used in) capital and related financing activities
(2,976,820)
(2,976,820)
(1,247,789)
(1,247,789)
Cash flows from investing activities:
Redemption of investments
Purchase of investments
Investment income, net
Net cash (used in) investing activities
29,550,168
(35,476,755)
2,997,801
(2,928,786)
18,175,941
(23,744,976)
3,925,155
(1,643,880)
(Decrease) increase in cash and cash equivalents: (2,037,553) 2,629,884
Cash and cash equivalents, beginning of year 16,539,915 13,910,031
Cash and cash equivalents, end of year $ 14,502,362 $ 16,539,915
See accompanying notes to the consolidated financial statements.
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The Florida Bar and Subsidiaries
Consolidated Statements of Cash Flows (Continued)
Years ended June 30, 2011 2010
Reconciliation of operating income to net cash
provided by operating activities:
Operating income $ 1,495,232 $ 1,335,950
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization 931,560 864,894
(Increase) decrease in:
Accounts receivable, net 179,526 (110,939)
Prepaid expenses and other assets (16,622) (217,368)
CSF recovery receivable 1,692,991
Increase (decrease) in:
Accounts payable 559,822 (483,613)
Claims payable 322,705 2,165,838
Accrued expenses 100,013 135,134
Deferred revenues 393,469 3,311,130
Deferred revenues - CSF recovery (1,692,991)
Security deposits 3 7
Compensated absenses payable (97,655) 8,010
Net cash provided by operating activities $ 3,868,053 $ 7,009,043
Non-cash investing, capital, and financing acitivities
Chan e in the fair value of investments $ 2,294,078 $ 2,502,176
Loss on disposal of assets $ 58,178 $ 44,951
Supplemental information
Cash paid for interest $
-
$ 35,855
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,thecourtandthepublic. The
FloridaBarwasestablishedasa unifiedstatebarbyruleoftheSupremeCourtofFlorida. The
Florida Bar regulates lawyers in Florida, investigates the unauthorized practice of law, offers
continuing legaleducation, publisheslawjournalsandoffersothermemberservices.
NOTE2- SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES
Reporting Entity
TheFlorida Barisa unified statebarorganizedasan armoftheSupremeCourtoftheStateof
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 (GASB) 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 iffound to be
financiallyaccountable, be required to be included in The Florida Bar'sfinancial statements. The
Florida Barisfinanciallyaccountableifitappointsavoting 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 orincomplete. Management's
analysis has disclosed no component unitsthat should be included in The Florida Bar'sfinancial
statements.
Basis ofPresentation
TheFlorida Baris accountedforasaproprietarytypeenterprisefund. TheFlorida Barappliesall
applicable pronouncements ofthe 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
similartoprivate businessenterprises: (1)wherethecostsofprovidinggoodsand servicestothe
general public on a continuing basis are to be financed through usercharges; or(2) where the
periodic determination of net income is considered appropriate. Proprietary funds distinguish
operating revenues and expensesfrom non-operating items. Operating revenues and expenses
generallyresultfrom providing goodsand servicesin connectionwith aproprietaryfund'songoing
operations. Operating expenses forThe Florida Bar include the costs ofpersonnel, contractual
services, supplies, utilities, repairs and maintenance, and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non-operating revenues and
expenses.
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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 eamed 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 intemational
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. The value of software developed
for The Florida Bar's use includes all direct and indirect costs that are related to development
activities. The cost of capital assets is depreciated over the estimated useful lives of the related
assets, ranging from 5 to 40 years, using the straight-line method. When capital assets are retired
or otherwise disposed of, the costs and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is reflected in the Consolidated Statements of Revenues,
Expenses and Changes in Net Assets, 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.
Deferred Revenues
Deferred revenues consist primarily of membership fees collected in advance, prepaid advertising
and prepaid legal education courses.
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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
Assets. Accordingly, certain costs have been allocated among the programs and supporting
services benefited.
Principles of Consolidation
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 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 Assets
Net assets are categorized as invested in capital assets, restricted for scholarships, and
undesignated. Invested in capital assets is intended to re'flect 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.
- 14-
".
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
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 operating cash balance held
in demand deposit accounts was $6,054,449 and additional cash and money market funds was
$8,447,913 at June 30,2011. Operating cash in the amount of $5,804,686 was insured by the
Federal Deposit Insurance Corporation (FDIC) as of June 30, 2011 and $249,763 was uninsured.
The additional cash and money market funds are held at a financial institution insured by the
Securities Investor Protection Corporation (SIPC). The SIPC provides up to $250,000 in coverage
for uninvested cash balances as of June 30,2011.
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
portfolio possesses an intermediate to long-term horizon (five to seven years) and within this
horizon, the primary objectives are to provide long-term growth of capital and income. The
secondary objectives are high current income and liquidity.
-15-
'.
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 4 - INVESTMENTS (CONTINUED)
Investment Objectives and Policies
The Policies require the risk adjusted returns of an investment over a full market cycle to rank in
the top 500/0 of universal comparisons with similar objectives and the investment should
outperform the target policy index. The Policies establish asset allocation guidelines with regard
to acceptable asset classes and prohibited investments, the overall targeted asset mix, and the
representative indices for each asset class. The asset allocation guidelines as compared to
actual investment balances were as follows as of June 30, 2011 :
Short-Term
Target Representative
Asset Classes Minimum Mix Maximum Actual Index
Short-Term Fixed income 35.00/0 50.00/0 65.00/0 60.00/0 Barclay's Capital Intermediate Government/Credit Bond Index
Cash and Equivalents 35.00/0 50.00/0 65.00/0 40.0
0
k Citigroup U.S. gO-Day Treasury Bills Index
Long-Term
Target Representative
Asset Classes Minimum Mix Maximum Actual Index
U.S. Large Cap Equity 9.0% 14.0% 19.0% 19.0% Standard &Poo(s 500 Index
U.S. Mid Cap Equity 0.0% 2.0% 7.0% 3.0% Russell Mid Cap Index
U.S. Sma" Cap Equity 0.0% 2.0% 7.0% 3.0% RusseH 2000 Index
International Equity 10.0% 15.0% 20.0% 11.0% MSCI EAFE Index
Inri SmaU Cap Equity 0.0% 2.0% 7.0% 2.0% MSCI EAFE Small Cap Index
Emerging Markets Equity 0.0% 5.0% 10.0% 9.0% MSCI Emerging Markets ndex
Commodities 0.0% 3.0% 8.0% 6.0% Dow Jones UBS Commodity Index
RElTs 0.0% 3.0% 8.0% 4.0% NAREIT Equity Index or Dow Jones Global Seled REIT
Inflation-linked Securities 0.0% 3.0% 8.0% 4.0% Barclays Capital U.S. TIPS Index
Emerging Market Fixed
Income 0.0% 3.0% 8.0% 3.0% JP Morgan Emerging Markets Bond Index
U.S. Fixed Income 20.3% 29.0% 37.7% 21.0% Barclay's Capital Intermediate GovtlCredit Bond Index
U.S. High Yield Fixed
Income 0.00% 4.00% 9.00% 5.00% Barclay's Capital U.S. Corporate High Yield Index
Hedge Funds 0.00% 6.00% 9.00% 5.00% HFRI Conservative Index or Hedge Fund of Funds Index
Managed Futures 0.00% 4.00% 7.00% 4.00% Barclay's CTA Index
Cash &Equivalents 0.0% 5.0% 10.0% 1.0% Citigroup U.S. 9O-Day Treasury Bills
Performance and compliance reports are submitted to the Investment Committee quarterly. The
Florida Bar employs an investment consultant who provides performance and compliance
reporting at both the portfolio level and by individual investment manager.
- 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
Equities
Managed Futures
Hedge Funds
Total investments
2011
$ 2,969,136
1,868,073
597,718
3,140,379
13,524,632
4,075,142
16,374,713
1,334,948
2,045,647
$ 45,930,388
$
$
2010
3,117,964
2,339,271
1,112,604
4,518,691
8,177,376
3,217,164
14,600,936
37,084,006
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 that such 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, 2011 of which $250,000 may
be 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
Stanley of $1 billion with no per-client limit for securities and a $1.9 million per-client limit for the
cash portion of any remaining shortfall. Investments in PIMCO mutual funds are held by a third
party trust company.
-17-
..
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 4 - INVESTMENTS (CONTINUED)
Interest Rate Risk
Interest 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
investments 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
duration of the fixed income portfolio to average between plus or minus 200/0 of the duration of
the representative benchmark for the investment. As of June 30, 2011, The Florida Bar's debt
investments had the following maturities:
Investment Maturities (In Years)
Less than 1
June 3D, Fair Value Year 1 5 Years 5 10 Years Over 10 Years
US Treasuries $ 2,969,136 $
-
$ 922,212 $ 1,574,716 $ 472,208
Federal Agencies 1,868,073 133,927 1,652,591 81,555
Municipal Bonds 597,718 24,998 572,720
Corporate Bonds &Other Fixed
Income 3,140,379 260,659 2,354,000 525,720
Total investments $ 8,575,306 $ 419,584 $ 5,501,523 $ 2,181,991 $ 472,208
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, 2011, the weighted average life
reported by the mutual fund managers for the mutual funds invested in debt instruments was 2.7
to 6.8 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 M 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)
As of June 30, 2011, The Florida Bar holds three corporate debt securities with a total market
value of $54,709 in the long term portfolio that have been downgraded below the investment
grade rating. The Investment Committee has approved continuing to hold these securities.
The Florida Bar's debt investments by rating at June 30, 2011 are presented below:
Corporate Mutual Funds -
U.S. Federal Municipal Bonds & Debt
Quality Rating Treasuries Agencies Bonds Other Securities Total
U.S. Government
Agencies $ - $ 1,868,073 $ - $ 728,295 $ - $ 2,596,368
Aaa 2,969,136 208,886 905,970 4,083,992
Aa1 80,563 80,563
Aa2 182,401 43,749 226,150
Aa3 175,783 175,783
A1 67,229 37,629 104,858
A2 58,639 486,228 544,867
A3 320,563 320,563
Baa1 131,553 131,553
Baa2 243,501 243,501
Baa3 12,399 12,399
Below Investment
Grade 54,709 54,709
Unrated 13,524,632 13,524,632
Total investments
$ 2,969,136 $ 1,868,073 $ 597,718 $ 3,140,379 $ 13,524,632 $ 22,099,938
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-
investment grade securities. Investments in mutual funds are with the understanding that the
investment policies stated in the mutual fund's prospectus supersedes the guidelines
established by The Florida Bar.
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 SEC-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. dollars and, thus, are not exposed to foreign currency risk. Investments in
foreign 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)
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
in 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 50/0 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 150/0 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 100/0 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, 2011, 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
The following is a summary of accounts receivable, net:
June 3D, 2011 2010
Accounts receivable $ 519,744 $ 703,005
Allowance for doubtful accounts (24,900) (24,900)
Accounts receivable, net $ 494,844 $ 678,105
- 20-
toO
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 6 - CAPITAL ASSETS, NET
Capital assets not being depreciated:
Land
Software development in progress
Construction in progress
July 1, 2010
$ 1,306,690
142,237
60,763
Additions
$ -
725,084
14,683
Deletions June 30, 2011
$ - $ 1,306,690
(49,629) 817,692
(60,763) 14,683
Total capital assets not depreciated 1,509,690 739,767 (110,392) 2,139,065
Capital assets being depreciated:
Buildings and improvements
Landscaping and parking
Equipment and furnishings
Software
Total capital assets being depreciated
9,615,208
120,318
4,562,368
1,231,757
15,529,651
1,113,365
788,999
448,816
2,351,180
(667,332)
(667,332)
10,728,573
120,318
4,684,035
1,680,573
17,213,499
Less accumulated depreciation for:
Buildings and improvements
Landscaping and parking
Equipment and 'furnishings
Software
(5,439,833)
(120,318)
(3,492,021 )
(422,580)
(344,702)
(428,280)
(158,578)
609,154
(5,784,535)
(120,318)
(3,311,147)
(581,158)
Total accumulated depreciation (9,474,752) (931,560) 609,154 (9,797,158)
Total capital assets being depreciated, net 6,054,899 1,419,620 (58,178) 7,416,341
Total capital assets, net $ 7,564,589 $ 2,159,387 $ (168,570) $ 9,555,406
Depreciation expense for the years ended June 30, 2011 and 2010 was $931,560 and
$864,894, respectively.
NOTE 7 - LONG-TERM LIABILITIES
Compensated Absences Payable
Compensated absences payable consisted of the following:
June 30, 2011 2010
Accrued vacation $ 1,333,310 $ 1,447,838
Accrued sick leave 984,228 967,355
Total compensated absences $ 2,317,538 $ 2,415,193
- 21 -
....
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 7 - LONG-TERM LIABILITIES (CONTINUED)
Changes in Long-Term Liabilities
Additions
Changes in long-term liabilities are summarized as follows:
Balance
July 1,2010 Reductions
Balance
June 30, 2011
Accrued vacation $ 1,447,838 $ 1,003,820 $ (1,118,348) $ 1,333,310
Accrued sick leave 967,355 643,235 (626,362) 984,228
Deferred revenue for CSF recovery 1,692,991 (1,692,991 )
Total long-term liabilities $4,108,184 $ 1,647,055 $ (3,437,701) $ 2,317,538
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
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 Certi'fication.
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.
- 22-
0.
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 8 - REVENUE AND EXPENSE CLASSIFICATION (CONTINUED)
Communication with Members and the Public
Includes the expenses of the Public Information Department and The Florida Bar Journal and
News.
Administration
Includes 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
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
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, 2011 and 2010,
respectively, and 4.30/0 on covered compensation exceeding 80% of the Social Security wage
base. The employer contributions are allocated to separate participant accounts and invested
by 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 laYJ5. The
pension contribution made equaled the contribution required during the years ended June 30,
2011 and 2010 for the Plan years ended December 31, 2010 and 2009 and was $2,236,636
and $2,133,962, 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-
-.
TheFloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE10- 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 atearly retirement, disability orfull retirement. The Florida Bar
has the authority to establish and amend benefit provisions ofTFBRHP. TFBRHP issues a
stand-alonefinancial reportthatincludesthefinancial statementsandrequireddisclosures.
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
contribution requirements are established and maybe amended byThe Florida Bar. Currently,
there are no required contributions by active orretired employees. The required contribution
fromtheFlorida Barisbasedonanactuariallydeterminedpercentageoftotalactivepayroll. For
fiscalyearsendedJune30, 2011 and2010,TheFloridaBarcontributed$85,511 and $268,980,
respectively, totheplan.
Annual OPES Cost and Net OPES Obligation. The Florida Bar'sannualotherpostemployment
benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the
employer (ARC), anamountactuariallydeterminedinaccordancewiththeparametersofGASB
Statement 45. The ARC represents a level offunding 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% ofactive payroll payable for the calendar years 2010
through 2011. The following table shows the components ofThe Florida Bar's annual OPEB
costfortheyear, theamountactuallycontributedtothe plan, and changes in The Florida Bar's
netOPEBobligationtoTFBRHP:
Annual required contribution $ 85,511
Intereston netOPESobligation
Adjustmentstoannualrequired contribution
AnnualOPEScost(expense) $ 85,511
NetOPESobligation- July1, 2010 $
Annual OPEScost(expense)for2011 85,511
Contributionsmadeduring FY2011 (85,511)
NetOPESobligation- June30, 2011 $
- 24-
..
The FloridaBarandSubsidiaries
NotestoConsolidatedFinancialStatements
NOTE10- RETIREEPOSTEMPLOYMENTHEALTHBENEFITS(CONTINUED)
The Florida Bar's annual OPEB cost, the percentage ofannual OPEB cost contributed to'the
plan, andthenetOPEBobligationfor2011 andtheprecedingthreeyearswereasfollows:
Annual PercentageofAnnualOPEBCost NetOPEB
FiscalYearEnded OPEBCost Contribtued Obligation
6/30/2009 58,733 90
0
k
6/30/2010 268,980 100
0
k
6/30/2011 85,511 100%
Funded Status and Funding Progress. As of January 1, 2010, the most recent actuarial
valuation date, the plan was 82% funded. The actuarial accrued liability for benefits was
calculatedto be$1,584,797andtheactuarialvalueoftheassetswas$1,293,906, resulting ina
fundingdeficitof$290,891. Thecovered payroll(annual payrollofactiveemployeescovered by
the plan) was $14,557,008, and the ratio ofthe unfunded actuarial accrued liability(UAAL) to
thecoveredpayrollwas2.00%.
Actuarial valuationsofan ongoing plan involveestimatesofthevalue ofreported amountsand
assumptionsaboutthe probabilityofoccurrenceofeventsfarintothefuture. Examplesinclude
assumptions about future employment, mortality, and the healthcare cost trend. Amounts
determinedregarding thefunded statusoftheplanandtheannualrequired contributionsofthe
employeraresubjecttocontinualrevisionasactualresultsarecomparedwithpastexpectations
andnewestimatesaremadeaboutthefuture.
Actuarial Methods and Assumptions. Projectionsofbenefitsforfinancial reporting purposesare
based onthesubstantiveplan(theplanasunderstoodbytheemployerandtheplanmembers)
andincludethetypesofbenefitsprovidedatthetimeofeachvaluationandthehistoricalpattern
ofsharingofbenefitcostsbetweentheemployerand plan memberstothatpoint. Theactuarial
methods and assumptions used include techniques thatare designed to reduce the effects of
short-term volatility in actuarial accrued liabilities and the actuarial value ofassets, consistent
withthelong-termperspectiveofthecalculations.
The projected unit credit actuarial cost method was used for the January 1, 2010 actuarial
valuation. The actuarial assumptions included a 7.50% investment rate ofreturn, which is the
rateoftheexpectedlong-terminvestmentreturnsonplanassetsandanannual healthcarecost
trendrateof10
%
initially, reducedbydecrementstoanultimaterateof5% intheyear2016and
beyond. Both rates included a 3% in'flation assumption. TFBRI-IP holds plan assets in trust
solelyto provide benefitsto retirees andtheirbeneficiaries. The UAALisbeing amortized asa
level percentage ofprojected payroll on an open basis. The remaining amortization period at
January1,2010was30years.
- 25-
-.
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 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 9.300/0
1/1/08 1,288,476 1,216,209 (72,267) 105.94% 14,296,752 -0.510/0
1/1/10 1,293,906 1,584,797 290,891 81.64% 14,557,008 2.000/0
NOTE 11 - 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 also 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 to unrelated entities are as follows:
Years ending June 30, Amount
2012 $ 692,742
2013 714,702
2014 737,079
2015 760,227
2016 711,048
Thereafter 821,147
Total minimum future rental payments $ 4,436,945
Total rental expense for the fiscal year ended June 30, 2011 and 2010 was $721,505 and
$794, 110, 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, 2011 and 2010 was
$279,790 and $272,966, respectively.
- 26-
0 ..
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 11 - LEASES (CONTINUED)
Future minimum rental receipts are as follows:
Years ending June 30,
2012
2013
2014
$
Amount
286,784
293,818
73,894
Total minimum future rental receipts $ 654,496
NOTE 12 - 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.
NOTE 13 - COMMITMENTS
The Florida Bar has contracted with various hotels or convention centers to reserve facilities,
rooms, and food and beverage services for various meetings and seminars to be held through
fiscal year 2015. 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
graduated based on the time between cancellation and the scheduled arrival date of the
meeting and are calculated based on a percentage of anticipated revenues by the particular
hotel or convention center.
The following is a schedule of estimated liquidating damages that The Florida Bar would incur
should they cancel all the contracts as of June 30, 2011:
Estimated
liquidating
Event damages
Annual Meeting $ 718,855
Board of Governors Meetings 77,966
General Meeting 125,491
Section Meetings 694,000
Continuing Legal Education Seminars 101,019
Total commitment $ 1,717,331
- 27-
..
The Florida Bar and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 14 - DESIGNATED FUND BALANCES
The Florida Bar has designated certain net assets to be used for specific program purposes. As
of June 30, 2011 and 2010, the designated net assets were $15,009,718 and $12,645,267,
respectively.
NOTE 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 Assets
June 30, 2011
General
Fund
Bar Center
Fund
Clients'
Security
Fund
Certification
Fund
Sections
Fund
Eliminating
Entries
Total
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
$ 14,058,181
45,930,388
534,672
-
617,369
61,140,610
$ 444,181
-
-
5,808,730
703
6,253,614
$ -
-
-
6,662,500
-
6,662,500
$ -
-
-
803,503
-
803,503
$ -
-
-
5,104,031
-
5,104,031
$
..
-
(39,828)
(18,378,764)
(25,117)
(18,443,709)
$ 14,502,362
45,930,388
494,844
592,955
61,520,549
Capital assets, net
Land
Buildings and improvements
Landscaping and parking
Equipment and furnishings
Software
Software development in process
Construction in progress
Accumulated depreciation
Total capital assets, net
-
-
-
-
1,680,573
817,692
-
(581,158)
1,917,107
1,306,690
10,728,573
120,318
4,684,035
-
-
14,683
(9,216,000)
7,638,299
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,306,690
10,728,573
120,318
4,684,035
1,680,573
817,692
14,683
(9,797,158)
9,555,406
Restricted assets
Investment in The Florida Bar
Building Corporation
Total restricted assets
1,611,647
1,611,647
..
-
-
-
-
-
-
-
(1,611,647)
(1,611,647)
Total assets $ 64,669,364 $ 13,891,913 $ 6,662,500 $ 803,503 $ 5,104,031 $ (20,055,356) $ 71,075,955
See Independent Auditors' Report.
.. 29 ..
The Florida Bar and Subsidiaries
Consolidating Statement of Net Assets
(Continued)
Clients'
General Bar Center Security Certification Sections Eliminating Total
June 3D, 2011 Fund Fund Fund Fund Fund Entries All Funds
Liabilities and Net Assets
Current liabilities
Accounts payable $ 1,729,932 $ 54,969 $ $ $ $ (39,828) $ 1,745,073
Client security fund claims payable 2,568,189 2,568,189
Accrued expenses 1,286,399 (48,917) 1,237,482
Due to other funds 18,329,847 (18,329,847)
Deferred revenues 11,375,450 11,375,450
Security deposits - J4,033 -=- _ - - _ j25,117) 48,916
Total current liabilities 32,721,628 129,002 2,568,189 - - (18,443,709) 16,975,110
Non-current liabilities
Compensated absences payable 2,317,538 2,317,538
Total non-current liablities 2,317,538 2,317,538
Total liabilities 35,039,166 129,002 2,568,189 (18,443,709) 19,292,648
Net assets
Invested in capital assets, net of related debt 1,917,107 7,638,299 9,555,406
Restricted for scholarships 45,921 45,921
Unrestricted
Designated 494,908 4,512,965 4,094,311 803,503 5,104,031 15,009,718
Undesignated 27,172,262 27,172,262
Contributed capital - 1,61J ~ - - ~ _ (L611,64J)
Total net assets 29,630,198 13,762,911 4,094,311 803,503 5,104,031 (1,611,647) 51,783,307
Total liabilities and net assets $ 64,669,364 $ 13,891,913 $ 6,662,500 $ 803,503 $ 5,104,031 $ (20,055,356) $ 71,075,955
See Independent Auditors' Report.
- 30-
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, 2011 Fund Fund Fund Fund Fund Entries All Funds
Operating revenues
Annual fees $ 23,094,112 $ $ $ $ $ $ 23,094,112
Other fees from members 3,740,158 1,254,491 1,259,056 6,253,705
Sales of products and services 7,015,157 4,065 2,493,446 9,512,668
Advertising 1,730,692 1,730,692
Young lawyers 903,972 903,972
Grants and other 403,263 1,073,817 382,775 - - (877,190) 982,665
Total operating revenues 36,887,354 1,073,817 382,775 1,258,556 3,752,502 (877,190) 42,4n,814
Operating expenses
RegUlation of the practice of law 15,609,699 1,303,981 (379,100) 16,534,580
Cost of products and services provided to members 6,862,981 3,522,508 (166,675) 10,218,814
Unauthorized practice of law 1,476,405 (35,856) 1,440,549
Public service programs 610,263 3,014,042 (14,821) 3,609,484
Communication 'lJith members and the pUblic 3,678,742 (89,343) 3,589,399
Administration 2.467,681 (59,930) 2,407,751
Legislation 738,676 (17,940) 720,736
Young lawyers 702,807 (17,068) 685,739
Depreciation and amortization 154,843 772,982 3,538 197 931,560
Other programs and costs 516,320 _424-, - - - (96,457) 843,970
Total operating expenses 32,818,417 __3,Q17,?80_ (877,190) 40,982,582
Operating Income (loss) 4,068,937 (1l3,212) _ 229,994 1,495,232
Non-operatlng revenues (expenses)
Investment earnings
Loss on disposal of capital assets
Total non-operating revenues
4,412,846
-
4,412,846
476,932
(58,178)
418,754
406,841
-
406,841
66,686
-
66,686
554,291
-
554,291
-
-
-
5,917,596
(58,178)
5,859,418
Change In net assets 8,481,783 295,482 (2,227,964) 21,064 784,285 7,354,650
Net assets. beginning of year 24,773,108 12,009,811 4,155,200 782,439 4,319,746 (1,611,647) 44,428,657
Transfers (to) from other funds (3,624,693) 1,457,618 2,167,075
Net assets. end of year $ 29,630,198 $ 13,762,911 $ 4,094,311 $ 803,503 $ 5,104,031 $ (1,611,647) $ 51,783,307
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 30,2011 Fund Fund Fund Fund Fund Entries All Funds
Cash flows from operating activities:
Receipts from members, customers and other sources $ 37,459,322 $ 249,861 $ 382,775 $ 1,258,556 $ 3,752,502 $ (4,762) $ 43,098,254
Payments to employees, suppliers and other vendors (32,380,674) (432,638) (789,616) (1,325,242) (4,306,793) 4,762 (39,230,201)
Net cash provided by (used in) operating activities 5,078,648 (182,717) (406,841) (66,686) (554,291) - 3,868,053
Cash flows from capital and related financing activities:
Acguisitionofcapitalassets
Net cash (used in) capital and related financing activi!ies _
(1,929,713) (1,047,107)

-
----=- _ _
-
-
-
-
-
-
(2,976,820)
(2,976,820)
Cash flows from investing activities:
Redemption of investments
Purchase of investments
Investment income, net
Net cash (used in) provided by investing activities
29,550,168 - -
(35,476,755) - -
1,493,051 476,932 406,841
_ _476,932 __
-
-
66,686
__
-
-
554,291
554,291
-
-
-
-
29,550,168
(35,476,755)
2,997,801
(2,928,786)
(Decrease) in cash and cash equivalents (1,284,601 ) (752,952) (2,037,553)
Cash and cash equivalents, beginning of year 15,342,782 1,197,133 16,539,915
Cash and cash equivalents, end of year $ 14,058,181 $ 444,181 $ $ $ $ $ 14,502,362
See Independent Auditors' Report.
- 32-
The Florida Bar and Subsidiaries
Consolidating Statement of Cash Flows
(Continued)
Year ended June 30, 2011
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 (used in) operating activities:
Operating income (loss) $ 4,068,937 $ (123,272)
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities
Depreciation and amortization 154,843 772,982
Transfers (to) from other funds (3,624,693) 1.457,618
(Increase) decrease in:
Accounts receivable, net 178.499
Due from other funds (2,281,574)
CSF recovery receivable
Prepaid expense and other assets (17,506) 884
Increase (decrease) in:
Accounts payable 574,002 (9.418)
Claims payable
Accrued expenses 100,018
Deferred revenues 393.469
Deferred revenues - CSF recovery
Security deposits - 3
Due to other funds 3,348,734 -
Compensated absences payable (97,655) -
$ (2,634,805) $ (45,622) $ 229,994 $ $ 1.495,232
3,538
2,167,075
197 931,560
(3,538)
(261,816)
1,692,991
(197)
(21,064) (784,285)
4,762
3,348,739
179,526
1,692,991
(16,622)
322,705
(1,692,991)
-
-
-
-
-
-
(5)
(4,762)
(3,348,734)
-
559,822
322,705
100,013
393.469
(1,692,991 )
3
(97,655)
Net cash provided by (used in) operating activities $ 5,078,648 $ (182,777) $ (406,841)_ $ (66,686) $ (554,291) $ - $ 3,868,053
Non-cash investing, capital and financing activities:
Change in the fair value of investments $ 2,294,078 $ $ $ $ $ $ 2,294,078
Loss on disposal of assets $ - $ 58,178 $ $ $ $ $ 58,178
See Independent Auditors' Report.
- 33-

l
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Year ended June 30, 2011 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)
$ 23,094,112
4,407,941
294,728
733,263
853,420
103,485
9,274
564,021
28,364
548,300
510,263
198,749
3,177,676
665,435
169,003
551,173
10,640
172,230
771,400
793,532
751,895
903,972
7,238
79,249
529,969
1,200,399
324
83,914
37,127
7,239
Total revenues - budgetary basis 41,258,335
$ 23,102,230 $ (8,118)
1,500,000 2,907,941
273,250 21,478
739,729 (6,466)
639,376 214,044
113,525 (10,040)
153 (153)
2,538 6,736
275 (275)
549,850 14,171
31,279 (2,915)
550,000 (1,700)
600,140 (89,877)
198,749
3,772,946 (595,270)
622,128 43,307
144,634 24,369
645,050 (93,877)
9,675 965
190,891 (18,661 )
682,362 89,038
737,800 55,732
795,131 (43,236)
813,650 90,322
10,000 (2,762)
128,263 (49,014)
585,820 (55,851)
1,104,943 95,456
324
68,900 15,014
5,000 32,127
1,000 6,239
38,420,538 2,837,797
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, 2011 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
General administration
Staff and office expense
Travel
Internal service and administration
Other operating expenses
856,227
52,976
4,164
28,387
Total general administration 941,754
Board and officer
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total board and officer
231,348
33,343
14,729
449,675
729,095
Legislation
Staff and office expense 134,025
Contract services 414,220
Travel 4,978
Internal service and administration 76,288
Other operating expenses (2,794)
Total legislation 626,717
Authorized house counsel
Staff and office expense 9,185
Internal service and administration 1,392
Other operating expenses 2,974
Total authorized house counsel 13,551
821,766
69,553
2,385
40,118
933,822
238,223
24,356
13,599
478,443
754,621
(34,461 )
16,577
(1,779)
11 ,731
(7,932)
6,875
(8,987)
(1,130)
28,768
25,526
116,944 (17,081 )
417,000 2,780
3,140 (1,838)
52,713 (23,575)
1,273 4,067
591,070 (35,647)
9,129 (56)
2,389 997
2,997 23
14,515 964
General counsel
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Total general counsel
Division director - legal
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total division director - legal
123,072
491,328
2,536
331
556
617,823
(13,292)
12,432
586
269
(5)
155,842 32,770
625,576 134,248
3,140 604
6,479 6,148
396 (160)
791,433 173,610
(19,416) (6,124)
18,864 6,432
1,568 982
500 231
1,516 1,521
See Independent Auditors' Report.
- 35-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2011 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
Attorney Consumer Assistance Program
Staff and office expense 1,232,466
Travel 4
Internal service and administration 149,414
Other operating expenses 43,456
Total lawyer regulation 1,425,340
Lawyer regulation
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
9,032,285
430
121,479
1,434,660
371,948
Total lawyer regulation 10,960,802
Professional enhancement program
Staff and office expense 29,893
Travel 4,709
Internal service and administration 4,277
Other operating expenses 2,745
Total professional enhancement program 41,624
Division director - ethics, UPL and professionalism
Staff and office expense
Travel
Less cost dist.
Internal service and administration
Other operating expenses
(34,770)
8,203
(39)
26,765
28
Total division director - ethics, UPL and professionalism 187
Unlicensed practice of law
Staff and office expense 1,219,773
Travel 30,385
Internal service and administration 222,546
Other operating expenses 31,123
Total unlicensed practice of law 1,503,827
Lawyer assistance program/substance abuse
Staff and office expense 1,319
Internal service and administration 53,519
Other operating expenses 466,000
Total lawyer assistance program/substance abuse 520,838
1,309,665 77,199
1,693 1,689
175,156 25,742
48,963 5,507
1,535,477 110,137
9,257,069 224,784
3,500 3,070
148,510 27,031
1,535,687 101,027
476,987 105,039
11,421,753 460,951
31,304 1,411
9,269 4,560
5,536 1,259
4,503 1,758
50,612 8,988
102,222 136,992
7,755 (448)
(121,730) (121,691 )
10,033 (16,732)
51 23
(1,669) (1,856)
1,260,918 41,145
48,375 17,990
229,263 6,717
49,901 18,778
1,588,457 84,630
7,500 6,181
58,153 4,634
466,000
531,653 10,815
See Independent Auditors' Report.
- 36-
-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Year ended June 30, 2011 Actual BUdgeted
Variance
Favorable
(Unfavorable)
Expenses - budgetary basis
Ethics
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total ethics
618,878
3,584
75,532
3,951
701 ,945
681,664
5,455
92,827
6,600
786,546
62,786
1,871
17,295
2,649
84,601
Lawyer advertising
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Total lawyer advertising
711,797
9,127
4,240
91,826
6,673
823,663
700,807
22,600
5,595
95,957
11 ,61 0
836,569
(10,990)
13,473
1,355
4,131
4,937
12,906
Records management
Staff and office expense
Travel
Internal service and administration
Total records management
234,144
3,003
27,199
264,346
151,862
3,424
19,071
174,357
(82,282)
421
(8,128)
(89,989)
Rules
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total rules
91,554
10,503
4
102,061
98,434
1,104
18,206
200
117,944
6,880
1,104
7,703
196
15,883
Ethics/advertising staff pool
Staff and office expense
Total ethics/advertsising pool
(2)
(2)
12,191
12,191
12,193
12,193
Professionalism
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Total professionalism
413,933
2,250
10,126
52,753
10,141
489,203
477,058
4,763
24,981
70,136
20,752
597,690
63,125
2,513
14,855
17,383
10,611
108,487
Multijurisdictional practice
Staff and office expense
Internal service and administration
Other operating expenses
Total multiiurisdictional practice
18,088
2,073
9
20,170
23,027
2,832
29
25,888
4,939
759
20
5,718
Florida Registered Paralegal
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total Florida Registered Paralegal
96,554
2,668
12,792
12,171
124,185
98,053
4,772
10,517
12,781
126,123
1,499
2,104
(2,275)
610
1,938
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, 2011 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
Shipping and receiving
Staff and office expense
Internal service and administration
Other operating expenses
Less cost distribution
136,128
(3,696)
35
(116,933)
Total shipping and receiving 15,534
Building and grounds
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Less cost distribution
1,715,900
1,527
3
(1,633,521 )
Total bUilding and grounds 83,909
Meetings and conventions
Staff and office expense 376,122
Contract services 2,703
Travel 15,622
Internal service and administration 167,384
Other operating expenses 312,590
Less cost distribution (55,951 )
Total meetings and conventions 818,470
Information systems
Staff and office expense 3,061,527
Contract services 481,351
Travel 3,277
Internal service and administration
Other operating expenses 75,115
Less cost distribution (3,625,490)
Total information systems (4,220)
Human resource management
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
Less cost distribution
Total human resource management
279,893
(9)
92,307
12,543
(384,734)
157,216 21,088
(5,000) (1,304)
58 23
(152,274) (35,341)
(15,534)
1,819,909 104,009
3,730 2,203
230 230
4 1
(1,754,973) (121,452)
68,900 (15,009)
372,478 (3,644)
2,528 (175)
22,430 6,808
200,397 33,013
443,093 130,503
(29,945) 26,006
1,010,981 192,511
3,529,429 467,902
715,000 233,649
25,176 21,899
23 23
87,753 12,638
(4,356,446) (730,956)
935 5,155
280,558 665
50,000 50,000
3,626 3,635
11,378 (80,929)
19,036 6,493
(356,501) 28,233
8,097 8,097
See Independent Auditors' Report.
- 38-
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
Year ended June 30, 2011
Expenses - budgetary basis
Division director - programs
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total division director - programs
Continuing legal education programs
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total continuing legal education programs
Continuing legal education rule
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total continuing legal education rule
Course approval center
Staff and office expense
Internal service and administration
Other operating expenses
Total course approval center
Legal education and specialization pool
Staff and office expense
Internal service and administration
Total legal education and specialization pool
Professional development pool
Staff and office expense
Internal service and administration
Other operating expenses
Total professional development pool
Public service programs
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total public service programs
Actual
(2,256)
1,606
539
121
10
839,129
49,452
717,903
1,212,405
2,818,889
229,736
297
44,301
20,635
294,969
141,841
26,069
1,095
169,005
6,706
(6,710)
(4)
(3,788)
2,722
1,059
(7)
351,896
2,143
67,329
195,312
616,680
(Continued)
Budgeted
Variance
Favorable
(Unfavorable)
33,600
3,449
(32,224)
175
5,000
35,856
1,843
(32,763)
54
4,990
812,713
94,539
1,072,454
1,523,513
3,503,219
(26,416)
45,087
354,551
311,108
684,330
278,404
1,698
52,944
26,061
359,107
48,668
1,401
8,643
5,426
64,138
126,384
20,848
2,655
149,887
(15,457)
(5,221 )
1,560
(19,118)
(6,706)
6,710
4
(17,610)
1,576
1,334
(14,700)
(13,822)
(1,146)
275
(14,693)
364,221
1,889
89,842
262,244
718,196
12,325
(254)
22,513
66,932
101,516
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, 2011 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
Foreign legal consultants
Staff and office expense
Internal service and administration
Other operating expenses
6,374
999
60
Total foreign legal consultants 7,433
5,150 (1,224)
710 (289)
258 198
6,118 (1,315)
Print shop
Staff and office expense 324,952 430,980 106,028
Other operating expenses 30,793 69,705 38,912
Less cost distribution (221,232) (518,685) (297,453)
Total print shop 134,513 (18,000) (152,513)
Law office management advisory services
Staff and office expense 225,800
Travel 38,597
Internal service and administration 35,671
Other operating expenses 26,039
Total law office management advisory services 326,107
Member benefits program
Staff and office expense 45,889
Internal service and administration 28,744
Other operating expenses 204,031
Total member benefits program 278,664
Legal publications
Staff and office expense 356,121
Travel 853
Internal service and administration 46,818
Other operating expenses 44,321
Total legal publications 448,113
Court rules
Staff and office expense 263,558
Travel 8,273
Internal service and administration 34,034
Other operating expenses 18,845
Total court rules 324,710
316,807
42,816
45,671
30,970
436,264
91,007
4,219
10,000
4,931
110,157
67,058
33,267
202,799
303,124
21,169
4,523
(1,232)
24,460
742,385
4,493
122,838
33,295
903,011
386,264
3,640
76,020
(11,026)
454,898
314,209
21,925
27,014
24,617
387,765
50,651
13,652
(7,020)
5,772
63,055
Section administration
Staff and office expense 610,262 662,394 52,132
Travel 802 4,924 4,122
Internal service and administration 476,710 542,726 66,016
Other operating expenses 6,281 6,052 (229)
. Total section administration 1,094,055 1,216,096 122,041
See Independent Auditors' Report.
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The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2011 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
Young lawyers division
Staff and office expense
Travel
Internal service and administration
Other operating expenses
63,499
10,555
93,167
704,251
50,874 (12,625)
11,109 554
76,477 (16,690)
578,353 (125,898)
716,813 (154,659)
83,857 (8,627)
7,824 1,859
33,967 8,802
109,102 26,007
234,750 28,041
Total young lawyers division
Committee
Staff and office expense
Travel
Internal service and administration
Other operating expenses
Total committee
Public information
Staff and office expense 708,587
Contract services 29,468
Travel 52,132
Internal service and administration 187,807
Other operating expenses 160,284
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
871,472
92,484
5,965
25,165
83,095
206,709
1,138,278
468,102
867
37
(469,003)
3
(6,651 )
2,504
309
3,850
780,541 71,954
33,206 3,738
60,788 8,656
321,637 133,830
229,337 69,053
1,425,509 287,231
526,976 58,874
1,050 183
147 110
(528,173) (59,170)
(3)
(19,779) (13,128)
3,141 637
12,698 12,389
3,940 90
Total "Journal" - "News" staff pool 12 (12)
"Journal"
Staff and office expense 264,984 297,917 32,933
Travel 1,319 1,738 419
Internal service and administration 88,238 111,355 23,117
Other operating expenses 494,738 573,806 79,068
Less cost distribution (6,700) (1,825) 4,875
Total "Journal" 842,579 982,991 140,412
See Independent Auditors' Report.
- 41 -
The Florida Bar and Subsidiaries
General Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2011 Actual Budgeted (Unfavorable)
Expenses - budgetary basis
"News"
Staff and office expense 493,324 546,710 53,386
Travel 6,873 11,405 4,532
Internal service and administration 178,685 207,032 28,347
Other operating expenses 1,250,668 1,288,734 38,066
Less cost distribution (191,831 ) (187,594) 4,237
Total "News" 1,737,719 1,866,287 128,568
Directory
Staff and office expense 2,071 2,200 129
Internal service and administration 335 (335)
Other operating expenses 856 (856)
Total Directory 3,262 2,200 (1,062)
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
1,941,628
93,574
7,197
214,563
324,419
(1,442,853)
1,138,528
171,877
10,000
3,916
2,032
8,309
Total research, planning and evaluation 196,134
Division director - administration
Staff and office expense 176.822
Travel
Internal service and administration 2,553
Other operating expenses 319
Less cost distribution (179,694)
1,944,334 2,706
134,380 40,806
9,828 2,631
286,533 71,970
346,429 22,010
(1,718,889) (276,036)
1,002,615 (135,913)
175,923 4,046
12,303 2,303
6,286 2,370
4,094 2,062
11,081 2,772
209,687 13,553
130,986 (45,836)
100 100
5,268 2,715
310 (9)
(132,927) 46,767
Total division directors - administration 3,737 3,737
G. Kirk Haas Fund (restricted fund)
Total expenses
Excess of revenues over expenses - budgetary basis
33,468,650
$ 7,789,685 $
2,500
36,381,657
2,038,881 $
2,500
2,913,007
5,750,804
See Independent Auditors' Report.
- 42-
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, 2011 Revenues Expenses Expenses
Totals on budgetary basis $ 41,258,335 $ 33,468,650 $ 7,789,685
Add:
Subsidiary operations
Florida Lawyers Association for the Maintenance of
Excellence, Inc.
The Florida Attorneys Charitable Trust
150,681
51,186
118,189
840
32,492
50,346
Less:
Adjustments for financial statement presentation purposes
Net change in the fair value of investments (4,412,846) (4,412,846)
Budgeted items treated as interfund transfers for basic
financial statement purposes
Depreciation
Contributions (160,002)
(609,260)
(160,002)
609,260
Total operating revenues, expenses and income per Consolidating
Schedule of Statement of Revenues, Expenses and Changes in
Net Assets $ 36,887,354 $ 32,818,417 $ 4,068,937
See Independent Auditors' Report.
- 43-
The Florida Bar and Subsidiaries
Clients' Security Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Year ended June 30, 2011 Actual Budget (Unfavorable)
Operatingrevenues
Annualcontribution* $ 2,167,075 $ 2,167,075 $
Recoveries 382,775 418,750 (35,975)
Totaloperatingrevenues 2,549,850 2,585,825 (35,975)
Operatingexpenses
Staffandofficeexpense 165,869 284,432 118,563
Travel 4,907 7,499 2,592
Internalserviceand administration 112,961 106,412 (6,549)
Claimspaid 2,730,119 2,792,575 62,456
Otheroperatingexpenses 3,724 (2,148) (5,872)
Totaloperatingexpenses 3,017,580 3,188,770 171,190
Operatingincome(loss) (467,730) (602,945) 135,215
Non-operatingrevenues
Investmentearnings 406,841 200,000 206,841
Totalnon-operatingrevenues 406,841 200,000 206,841
Changein netassets $ (60,889) $ (402,945) $ 342,056
* Theannualcontributionfromthegeneralfund istreatedasabudgeted revenueitemonthis
statement. However,itistreatedasaninterfundtransferinthebasicfinancial statementssection
ofthisreport. Thedifferencebetweenthebudgetbasisstatementandthebasicfinancial statement
isreconciledasfollows:
Changein netassets- budgetarybasis $ (60,889)
Less: annualcontributiontreatedasaninterfund
transferonthebasicfinancialstatements (2,167,075)
ChangeinnetassetsperConsolidatingScheduleof
StatementofRevenues, Expensesand Changesin
NetAssets $ (2,227,964)
SeeIndependentAuditors'Report.
- 44-
The Florida Bar and Subsidiaries
Certification Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Year ended June 30, 2011 Actual Budget (Unfavorable)
Operating revenues
Member Fees $ 1,254,491
Sales 4,065
Total operating revenues 1,258,556
Operating expenses
Staff and office expense
Contract services
Travel
Internal service and administration
Other operating expenses
876,270
47,025
49,522
166,268
165,093
Total operating expenses 1,304,178
Operating income (loss) (45,622)
Non-operating revenues
Investment earnings 66,686
Total non-operating revenues 66,686
$ 1,240,613
8,100
1,248,713
$ 13,878
(4,035)
9,843
1,007,265
50,000
67,103
167,198
209,693
1,501,259
130,995
2,975
17,581
930
44,600
197,081
(252,546) 206,924
50,000
50,000
16,686
16,686
Change in net assets per Consolidating Schedule of
Statement of Revenues, Expenses and Changes in
Net Assets $ 21,064 $ (202,546) $ 223,610
See Independent Auditors' Report.
- 45-
'}
The Florida Bar and Subsidiaries
Sections Fund Schedule of Budgeted and Actual Revenues and Expenses
Variance
Favorable
Year ended June 30, 2011 Actual Budgeted (Unfavorable)
Revenues - budgetary basis
Administrative law
Alternative dispute resolution
Appellate practice and advocacy
Business law
City, county, and local government
Council of sections
Criminal law
Elder law
Entertainment, arts and sports law
Environmental and land use law
Equal opportunity law
Family law
General practice
Government lawyers
Health law
International law
Labor and employment law
Out-of-state practice
Public interest law
Real property, probate and trust law
Tax law
Trial lawyers
Workers' compensation
$ 38,684 $
8,168
90,963
516,739
96,180
6,972
96,599
105,901
26,840
74,916
4,101
652,165
83,425
28,507
47,756
76,301
108,461
22,227
9,274
1,327,902
323,140
483,661
77,911
30,141 $ 8,543
2,375 5,793
90,612 351
379,068 137,671
68,556 27,624
6,403 569
88,618 7,981
129,307 (23,406)
47,430 (20,590)
85,632 (10,716)
4,132 (31)
313,824 338,341
114,277 (30,852)
28,127 380
43,248 4,508
145,498 (69,197)
100,524 7,937
35,874 (13,647)
8,790 484
1,240,585 87,317
318,421 4,719
356,530 127,131
83,921 (6,010)
Total revenues - bUdgetary basis 4,306,793 3,721,893 584,900
See Independent Auditors' Report.
- 46-
The Florida Bar and Subsidiaries
Sections Fund Schedule of Budgeted and Actual Revenues and Expenses
(Continued)
Variance
Favorable
Year ended June 30, 2011 Actual Budgeted (Unfavorable)
Operating expenses - budgetary basis
Administrative law 18,946 37,633 18,687
Alternative dispute resolution 1,801 2,375 574
Appellate practice and advocacy 38,191 50,114 11,923
Business law 412,263 419,040 6,777
City, county, and local government 48,564 69,858 21,294
Council of sections 1,931 4,983 3,052
Criminal law 58,690 78,448 19,758
Elder law 136,839 132,019 (4,820)
Entertainment, arts and sports law 23,728 39,960 16,232
Environmental and land use law 85,404 115,958 30,554
Equal opportunity law 2,135 4,094 1,959
Family law 397,261 410,004 12,743
General practice 107,582 119,179 11,597
Government lawyers 34,614 29,805 (4,809)
Health law 28,186 57,023 28,837
International law 80,621 154,050 73,429
Labor and employment law 92,965 119,376 26,411
Out-of-state practice 26,468 28,521 2,053
Public interest law 2,078 5,424 3,346
Real property, probate and trust law 1,281,207 1,341,363 60,156
Tax law 193,480 266,433 72,953
Trial lawyers 367,296 295,100 (72,196)
Workers' compensation 82,258 94,219 11,961
Total expenses - budgetary basis 3,522,508 3,874,979 352,471
Change in net assets per the Consolidating Schedule of
Statement of Revenues, Expenses and Changes in Net
Assets $ 784,285 $ (153,086) $ 937,371
See Independent Auditors' Report.
- 47-
Other Reports
CRI
CARR Ca", Riggs a Ingram. llC
RIGGS & 1713 Mahan Dnve
INGRAM
Tallahassee, Fl32308
(850)878-8777
~ 8 5 878-2344lfaxl
wwwcocpa.com
REPORTONINTERNALCONTROLOVERFINANCIALREPORTINGANDON
COMPLIANCEANDOTHERMAITERSBASEDONANAUDITOFFINANCIAL
STATEMENTSPERFORMEDINACCORDANCEWITH
GOVERNMENTAUDITING STANDARDS
BoardofGovernors
TheFloridaBar
Tallahassee,Florida
We have audited the basic financial statements ofThe Florida Barand Subsidiaries asof
andfortheyearendedJune30, 2011, and haveissuedourreportthereondated November
9, 2011. Weconducted ourauditinaccordancewithauditing standardsgenerallyaccepted
inthe UnitedStatesofAmericaandthestandardsapplicabletofinancial auditscontained in
Government Auditing Standards, issuedbytheComptrollerGeneraloftheUnitedStates.
InternalControlOverFinancialReporting
In planning and performing our audit, we considered The Florida Bar and Subsidiaries'
internal control overfinancial reporting asa basisfordesigning ourauditing proceduresfor
thepurposeofexpressingouropinionsonthefinancialstatements,butnotforthepurposeof
expressing an opinion on the effectiveness of The Florida Bar and Subsidiaries' internal
control over financial reporting. Accordingly, we do not express an opinion on the
effectivenessofTheFloridaBarandSubsidiaries'internalcontroloverfinancialreporting.
Adeficiencyininternalcontrolexistswhenthedesignoroperationofacontroldoesnotallow
managementoremployees, in the normal courseofperforming theirassigned functions, to
prevent, ordetect and correct misstatements on a timely basis. A material weakness is a
deficiency,oracombinationofdeficiencies, in internalcontrolsuchthatthereisareasonable
possibility that a material misstatement of the entity's financial statements will not be
prevented,ordetectedandcorrectedonatimelybasis.
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all
deficiencies in internal control overfinancial reporting that might be deficiencies, significant
deficiencies, ormaterialweaknesses. Wedid notidentifyanydeficiencies in internalcontrol
overfinancialreportingthatweconsidertobematerialweaknesses,asdefinedabove.
- 48-
Board of Governors
The Florida Bar
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.
~ ~ r ~ t...L. C.
November 9, 2011
- 49-