TREASURER'S REPORT Mahadevappa Mahesh, PhD, Baltimore, MD

I would like to start the new year with pleasant news about the AAPM finances. It has been a year since I became the AAPM Treasurer. Throughout the past year, I have utilized this platform to keep you informed about the various fiscal issues and plan to continue with this practice in 2017. It has been quite exhilarating for me to learn a lot about financial topics including reviewing financial statements, audit reports, developing budgets, and tackling several budgetary items to ensure our association's finances are in a secure position.

The AAPM Finance Committee and Board of Directors met in Chicago in December, reviewing the Association's current financial position, as well as approving the budget for 2017. I am happy to report that 2016 was a successful financial year for our association.

Financial Position and Estimates for 2016

As of mid-December, I am pleased to report that AAPM will finish the year with a surplus from operations. While conservative reports provided to the Board in November indicated that we would complete the year with a modest surplus from operations, when factoring in a reduced spending pattern within the Councils and Committees through the end of the year and historical spending in the last two months of the year, it is now estimated that, due to recent market gains, the association will see a healthy surplus from operations as well as an increase in reserves.

The 2016 budget, as approved by the Board of Directors, was developed using a statistical model to project revenue and expenses based on historical spending trends. As you will see in the accompanying reports (as of October 31), revenue and expenses are estimated at $11.21 million and $11.19 million respectively, compared to approved budgeted revenue of $9.57 million and expenses of $10.95 million.

AAPM experienced a better-than-anticipated revenue gain from the Placement Services, the Annual Meeting, and the Medical Physical Journal, contributing to the better-than-anticipated revenue in 2016. On the expense side, while current expenses presented are pacing ahead of budget, it is expected that final expenses will come in below budget (partially due to historical underspending by the councils).

Currently, AAPM's investment portfolio saw substantial gains during 2016, recording more than $800,000 of unrealized gains in the first ten months of the year. Even after transferring out $1.2M to operations to replenish funds spent out of operations to acquire the Headquarters building, the reserve fund exceeds $12.3M as of October 31, 2016.

2017 Budget

I would once again like to thank the Council and Committee Chairs, along with their liaisons, who worked extremely hard in developing their budgets. As reported in my previous column (Nov–Dec 2016), in a change from previous years, the entire Finance Committee reviewed the 2017 budget with the Council Chairs while keeping the goals and objectives of AAPM's strategic plan in the forefront.

The 2017 budget summary is included with this report. Revenue projections total $9.5 million and expenses total $10.7 million, with a budgeted deficit of $1,201,961. The statistical model predicted a deficit of $1,010,347 which is based upon AAPM complying with the financial covenants established by TD Bank, the mortgage holder for the new HQ building. Given our normal under-spending patterns, the Finance Committee felt that the approved deficit would allow for AAPM to operate, still meet the bank covenants and operate at or near break-even from the operations' budget. AAPM's Finance Committee, Strategic Planning Committee, and the Board feel that this conservative budget allows for AAPM to achieve its strategic initiatives and yet meet its fiscal responsibilities to the bank at the same time.

Included you will find a graphical presentation of the 2017 budgeted revenues and expenses by category (including which programs are included in the various categories).

In closing, I would like to thank Robert McKoy for all his help during this past year, especially in making the budgeting process and the job of Treasurer manageable. Please feel free to reach out to me by email or call me at 410-955-5115 or tweet me at @mmahesh1 if you have any questions concerning this report.

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