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APA continues to face fiscal constraints that will have an impact on operations now and in the future, Budget Committee Chair Donald Scherl, M.D., told the Board of Trustees at its meeting in Washington, D.C., last month as they voted to approve in principle the outlines of APA's $28.2 million budget for 1997.
While the budget will be revised prior to final deliberation in December, it represents the broad trends and priorities of the Association. Only two budgetary actions that directly affect members' pocketbooks were approved by the Board—a freeze in membership dues for Fiscal 1997, and an increase in the per diem staff and component travel allowances for meals and automotive mileage to equal that allowed for federal employees.
The Board had to act on the dues rate immediately to meet the deadline for the next membership dues billing. The per diem increase is expected to cost APA about $100,000 in 1997, while holding dues steady is projected to result in lost revenues amounting to approximately $250,000, according to documents provided by the Budget Committee.
Trustees debated raising annual meeting registration fees for full-time, nonmember registrants but decided to postpone considering the issue until a scheduled October Board meeting.
The Board also debated at length whether the rules for officer compensation and travel should be revised, but decided not to act pending further discussion at its next meeting, in October.
For APA simply to keep pace with inflation and do the same basic work done in 1996 would require that the Association spend almost $1 million more in 1997, explained Scherl. Responding to changing practice patterns, technological innovations, and member priorities imposes significant new budgetary demands on the Association above inflation, he noted.
APA's total revenue base is not growing sufficiently to meet the demand for increased spending, and projected 1997 revenue is not adequate even to offset inflation, according to Scherl. A combination of a projected declining membership and slower dues paying by members is having a severe impact on the Association's fiscal outlook. Only periodicals and APA book sales are expected to show revenue increases for Fiscal 1997, said Scherl.
As part of the normal budget process, APA Budget Committee Chair Scherl, Chief Operating Officer Robert Trachtenberg, and the finance staff reviewed several budget scenarios this summer to produce a "consensus budget" for presentation to the Budget Committee and the Board of Trustees.
Supporting information that Scherl provided to the Board notes that under the proposed budget most, but not all, departments and components would undergo a 2 percent cut. The revenue projections submitted by departments and components were increased by $251,693. Together the proposed cuts and projected revenue increases lead to a projected surplus of $86,841, which will be needed as the Board goes through what is called the "fine-tuning process" between now and final budget approval in December. This allows for late requests, correction of errors, and revised revenue estimates.
The Association's chief sources of revenue are membership dues, projected at $9.1 million; the annual meeting, projected at $4.3 million; and Psychiatric News, projected at $3.7 million.
The DSM-IV fund will contribute $2.4 million for Fiscal 1997. As of September 10, the fund had a total balance of $10.7 million.
Approximately $2.2 million in revenue comes under the category "special financial income." This includes items such as interest income on APA investments at $1.1 million and the general APPI contribution, also about $1.1 million.
The largest projected expenditures include $5.8 million for general administration, $5.6 million for product management, and $3.8 million for the annual meeting.
General administration includes items such as the electronic communications project, employee benefits, running the medical director's office, and information systems. Product management involves all expenses related to APA publications and items such as the Psychiatric Placement Service.
In addition to taking actions reported elsewhere in this issue, the Board voted to
The Board also voted against ratifying an executive action taken by the president, speaker of the Assembly, and medical director to accept an invitation from the Institute for Behavioral Healthcare to serve as a participating organization and disapproved APA participation with the IBH in all future conferences.
(Psychiatric News, October 18, 1996)