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The Board of Directors of the American Philological Association met via conference call on January 27, 2014. Those participating were Prof. Kathryn J. Gutzwiller, President, Dr. Adam D. Blistein, Profs. Mary C. English, Joseph Farrell, Sara Forsdyke, Bruce W. Frier, Mary-Kay Gamel, Michael Gagarin, Sarah Iles Johnston, John Marincola, Laura McClure, John F. Miller, David H. Porter, Matthew Roller, and Ralph M. Rosen. Also present by invitation was the Association’s auditor, Mr. Ronald Scaramuzza, of Briggs, Bunting & Dougherty. Those absent were Profs. Joy Connolly, Denis Feeney, and Ralph J. Hexter.

Prof. Gutzwiller called the meeting to order at 1:30 p.m. The only agenda item for the call was a discussion with the auditor of the Association’s financial statements for the fiscal year that had ended on June 30, 2013. In advance of the call the Directors had received copies of the statements as well as the Briggs firm’s “professional standards letter” outlining the scope of its responsibilities.

Mr. Scaramuzza began his presentation by stating that the firm’s report was unqualified which meant that the firm believe that the statements had no material misstatements. The Association’s total assets had increased by almost $600,000, and Mr. Scaramuzza described how this amount was spread across three different types of assets and what limitations – if any – existed on the use of each type. Unrestricted assets, which the Board could expend at its discretion, had increased by about $90,000 during the year, and the new total, just over $1,650,000, represented about 16 months of operating expenses at the APA’s current spending level.

The value of the Association’s investments had increased by about $773,000. Of this amount $460,000 consisted of new purchases and $313,000 from capital appreciation. Note 4 to the Statements described in detail the composition of the investments. The proportion devoted to equities had increased from the previous year, and the performance of the investments as measured by interest and dividend income and investment gains was better in 2013 than it had been in 2012.

Mr. Scaramuzza noted that the Association always recorded fellowships as expended when they were awarded and not when the fellows received the stipends. Because the Association’s two largest fellowships, the Thesaurus Linguae Latinae and Pearson Fellowships, were both regularly awarded in one year and taken in the next, the APA always showed an amount payable in this category. Liabilities also included deferred revenue, almost all of which consisted of dues. Because dues were paid on a calendar year basis, that income needed to be applied to two different fiscal years.

In 2012 the Association had shown a “refundable advance” of over $66,000. This sum consisted of challenge grant matching funds that the APA had received from the National Endowment for the Humanities but had not yet earned in full. Because of the successful conclusion of the Gateway Campaign in late 2012, that liability did not appear in the 2013 statements.

Mr. Scaramuzza discussed the Statements of Activities that showed income and expenditures over the last two fiscal years as well as how assets had changed both before and after the application of investment income. The Association always relied on income from its investments to fund its operations, but Mr. Scaramuzza noted that in 2013 the decrease in unrestricted assets before the application of investment income was much smaller than in previous years, in large part because of a reduction in fund-raising expenses. Overall, supporting services (membership services and general administration as well as fund-raising expenses) represented 10% of all expenditures, a decrease from 21% the year before.

The Statements of Activities showed how the Association divided its expenditures among its various programs or supporting services. The subsequent Statements of Functional Expenses broke down those outlays into types of expenditures. Salaries and benefits (including those for the American Office of L’Année philologique) represented 42% of all expenditures. The category entitled “Cosponsor share of joint revenue” showed the amounts paid to the Archaeological Institute of America as its share of registration and exhibit revenue from the annual meeting. Mr. Scaramuzza noted that overall the annual meeting operated at a small deficit once a portion of staff salaries was allocated to it. The amount spent on travel had increased in 2013 largely because of a greater number of meetings to organize the Digital Latin Library project. All of those expenses had been offset by grant revenue from the Andrew W. Mellon Foundation.

Mr. Scaramuzza then reviewed several of the notes to the financial statements. The Association had not changed any accounting policies during the year. Other notes described the terms of the APA’s lease for office space, its contribution to employee pensions, and its commitments to use hotels for future annual meetings.

Turning to the accompanying professional standards letter, Mr. Scaramuzza stressed that the financial statements belonged to the APA; the role of the auditor was to express an opinion as to their accuracy. The Briggs firm had made no significant adjustments to the statements provided by APA staff, and Mr. Scaramuzza said that his firm had received good cooperation from staff. He reminded the Board that he had reasonable (but not absolute) assurance that the statements were accurate; it was possible that errors had escaped notice. In addition, the Board should understand that many of the figures in the statements depended on estimates, particularly with reference to the amount of effort that staff devoted to different programs.

The Briggs firm had analyzed the Association’s financial operations and had not needed to issue an additional letter listing any problems in the control of those operations. Like many small organizations, the Association concentrated responsibility in one employee, but it offset problems that might arise from this situation by having Financial Trustees review monthly banking and investment statements. Mr. Scaramuzza noted that in hiring a successor for Dr. Blistein, the Board needed to consider both how it would replace the financial management he provided and what type of controls would be needed once that successor took office.

There being no further business, the call was concluded at 2:30 p.m.