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Treasurer’s Report

Bonnie Markham, PhD, PsyD

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In 2016, APA implemented the integrated budget model, a vastly revised approach developed in 2015 to more clearly define APA’s sources of income and expense. The new model revealed that if APA continued to do business as usual, there would be increasing and eventually devastating deficits. Acting CEO Cynthia Belar, PhD, and the Board of Directors, in partnership with the Finance Committee, developed and approved an austere budget with cost savings in both governance and programs. APA’s largest expense is personnel. Staffing reorganizations and, in some cases, staffing reductions, were necessary to increase efficiency.

APA’s significant publishing business, two buildings and valuable long-term investment portfolio continue to provide the resources needed for operations and are being managed creatively to assure the revenue growth needed for APA’s success. Attention to membership declines and decreases in print journal sales as well as careful review of both new and ongoing programs will strengthen annual operating revenues and expenses and maintain stability of the balance sheet and public credit rating.


Total revenues remained strong, with growth of 3.8 percent in 2016. The two largest contributors to this growth were electronic licensing revenues, increasing 4.6 percent from 2015, and publication sales, increasing by 17.1 percent from 2015. This growth in publication sales was related to a rebound in sales of the APA Publication Manual. Member dues and print journal subscription revenues continued to experience declines: 7 percent and 4 percent, respectively.


Expenses in 2016 were relatively comparable to those of 2015, with a very small increase of 0.7 percent and no significant changes in any specific expense category. The majority of those savings were reflected in consulting (10.3 percent decline) and office expenses (16.5 percent decline), where staff were able to make reductions.

Nonoperating Activity

These activities, which include the long-term investment portfolio, real estate, income tax expense, and other nonoperating revenue and expenses, had a net gain of $14 million in 2016 (see Table 1 in Financial Highlights section). Investment gains, less investment management fees, were $6.9 million; gains from real estate activities were $7.5 million; and income tax expense was $0.8 million. Other miscellaneous revenue and expenses netted $0.4 million.

Balance Sheet

During 2016, APA’s net assets increased $7.8 million (see Tables 2 and 3). Net assets are crucial for meeting debt covenants, supporting overall financial health, establishing credit agency ratings and maintaining flexibility in addressing our mission. This net asset increase was the result of $14 million in gains from nonoperating activity, a $6.4 million loss from APA operations, and a $0.13 million gain from the Practice Organization. The gains from nonoperating activity were the result of gains from APA’s long-term investment portfolio and interest rate swaps associated with the building loans (an interest rate swap agreement is designed to exchange a variable interest rate for a fixed rate for a term loan) and gains from real estate activity. The value of the long-term investment portfolio decreased 2 percent, to end the year with a market value of $55.8 million (see Table 4).

APA’s Public Credit Rating

In August 2016, Standard and Poor’s (S&P) affirmed APA’s BBB+ rating but revised the outlook from stable to negative. In their view, our operations have been weakened by increases in strategic spending, operating deficits and nonoperating legal costs. Other factors include declines in membership dues, decreasing demand for print products, a decrease in financial resources combined with a high long-term debt load, and significant turnover in senior management. S&P believes there is a one-in-three chance that sustained pressures could result in a downgrade of APA’s BBB+ rating.


APA owns two buildings near Capitol Hill in Washington, D.C. The 750 First Street building has 351,000 square feet of leasable space, approximately 55 percent of which APA occupies and 10 percent of which the National Association of Social Workers occupies. The 10 G Street building has 254,000 square feet of leasable space; over two thirds of that space is occupied by Amtrak and the World Resources Institute. Our property management team successfully renegotiated several leases with smaller tenants in both buildings in 2016 (and early 2017), resulting in the maintenance of an occupancy rate in excess of 90 percent.

These properties generated a combined total of $7.4 million of net income after distributing $5.5 million to APA in 2016.

The 750 First Street and the 10 G Street buildings have been certified as LEED Gold and LEED Platinum, respectively, by the U.S. Green Building Council, reflecting many years of APA’s continuing commitment as an environmentally responsible owner.


I would like to acknowledge the extraordinary commitment made by the members of the Finance Committee. Implementing the integrated budget took many hours of analysis, assessment and thorough review of proposed budgets and solutions to projected deficits. The role of the Finance Committee as an oversight group was vastly expanded in 2016 to assure that its primary mission of providing checks and balances was fulfilled. This involved ongoing collaboration with the Interim CEO, APA management, Finance staff and governance members. Decisions crucial to APA’s effective financial management were made in 2016 concerning the budget and the delegation of certain financial duties to the Board of Directors.

The Finance Committee carefully analyzed the information needed and provided several webinars to the Council of Representatives to support their work. The committee, with the active participation of its outside expert advisors in the investment and audit areas and with the increased involvement of liaisons from a number of governance groups, assured transparency in the process and offered opportunities for discussion and debate.

The members of the 2016 Finance Committee, the Audit Committee and the Investment Committee are listed here. We are especially grateful to Robert McGrath, PhD, and Jean Carter, PhD, who ably led most of the webinars offered to council, Additionally, Jean Carter’s contributions as vice chair of the Finance Committee have been substantial.

2016 Finance Committee


Bonnie Markham, PhD, PsyD (Chair)
Jean A. Carter, PhD (Vice Chair)
Rosie Philips Bingham, PhD
Y. Barry Chung, PhD
Lisa R. Grossman, JD, PhD
Robert E. McGrath, PhD
Beth N. Rom-Rymer, PhD

Investment Subcommittee

Stephen C. Howell
John J. McCormack Jr.
Peter M. Ramsey
Sheila T. Roberts

Audit Subcommittee

Stephen C. Howell
Gregory L. Mitchell
Steven F. Stanton