WEBVTT 00:00:04.660 --> 00:00:07.590 position:50% align:middle Hello, my friends, colleagues, and fellow regulators. 00:00:07.590 --> 00:00:10.800 position:50% align:middle Thank you for attending this 44th delegate assembly. 00:00:10.800 --> 00:00:15.710 position:50% align:middle My name is Adrian Guerrero, and I'm honored to serve as your NCSBN treasurer. 00:00:15.710 --> 00:00:19.280 position:50% align:middle Thank you for permitting me a few short minutes to update you on the financial progress that we've made 00:00:19.280 --> 00:00:20.830 position:50% align:middle over the past year. 00:00:20.830 --> 00:00:25.270 position:50% align:middle And I'll ask that you turn to the report to the finance committee in the NCSBN Business Book, 00:00:25.270 --> 00:00:29.830 position:50% align:middle where you will find the FY-22 highlights and accomplishments of the committee, 00:00:29.830 --> 00:00:34.190 position:50% align:middle the independent auditor reports, the statements of financial position, 00:00:34.190 --> 00:00:37.500 position:50% align:middle as well as other detailed information about the organization's finances. 00:00:37.500 --> 00:00:42.388 position:50% align:middle And I think it starts on page 145. 00:00:42.388 --> 00:00:46.646 position:50% align:middle Overseeing the finances of a large organization like ours is not a one-person show, 00:00:46.646 --> 00:00:51.518 position:50% align:middle so I'd like to take this time to recognize your dedicated and hardworking NCSBN finance committee 00:00:51.518 --> 00:00:55.040 position:50% align:middle members who have done a tremendous amount of work throughout the year. 00:00:55.040 --> 00:00:58.820 position:50% align:middle And if you're in attendance, if you would please arise when I call your name. 00:00:58.820 --> 00:01:10.060 position:50% align:middle Russ Barron from Idaho, John Etherington from Oregon, Tony Graham from North Carolina, 00:01:10.060 --> 00:01:16.990 position:50% align:middle Sue Painter from West Virginia RN, David Saucedo from Texas, 00:01:16.990 --> 00:01:20.870 position:50% align:middle and Diana Waterman from Manitoba RN. 00:01:20.870 --> 00:01:25.500 position:50% align:middle Please join me in recognizing all the NCSBN finance committee members for their commitment and dedication 00:01:25.500 --> 00:01:27.012 position:50% align:middle to the mission of NCSBN. 00:01:34.560 --> 00:01:39.260 position:50% align:middle I'd also like to recognize two additional individuals that work with us on the finance committee and the 00:01:39.260 --> 00:01:42.330 position:50% align:middle finances of our organization are in very good hands. 00:01:42.330 --> 00:01:46.234 position:50% align:middle Our Chief Financial Off\icer, Mr. Bob Clayborne, and our Director of Finance, 00:01:46.234 --> 00:01:49.379 position:50% align:middle Ms. Gloria Evans-Melton continued to do an amazing job. 00:01:49.379 --> 00:01:53.200 position:50% align:middle For the past few years, they rose to the challenge and evolved our financial 00:01:53.200 --> 00:01:58.940 position:50% align:middle operations during COVID-19 pandemic all while continuing to manage our organization's sizable 00:01:58.940 --> 00:02:00.610 position:50% align:middle finances with dedication and skill. 00:02:00.610 --> 00:02:04.440 position:50% align:middle We extend our sincere and heartfelt. 00:02:04.440 --> 00:02:09.710 position:50% align:middle Thank you to Rob and Gloria and the entire NCSBN finance team for all they do for our organization. 00:02:09.710 --> 00:02:11.429 position:50% align:middle And please a round applause for them as well. 00:02:19.490 --> 00:02:23.920 position:50% align:middle Our committee charge and charter to maintain a strong financial position that allows the organization 00:02:23.920 --> 00:02:30.336 position:50% align:middle to enhance quality, introduce new program elements, and grow without compromising or jeopardizing core 00:02:30.336 --> 00:02:35.390 position:50% align:middle program delivery to nursing regulatory bodies. 00:02:35.390 --> 00:02:38.680 position:50% align:middle And as part of that charge, we advise the Board on the overall direction and 00:02:38.680 --> 00:02:40.520 position:50% align:middle control of the finances of the organization. 00:02:40.520 --> 00:02:44.920 position:50% align:middle The committee reviews the recommendations and the budget and recommends the budget to the 00:02:44.920 --> 00:02:46.170 position:50% align:middle Board every year. 00:02:46.170 --> 00:02:50.580 position:50% align:middle In our August meeting, we reviewed the budget, and will be presented to the Board of directors 00:02:50.580 --> 00:02:52.042 position:50% align:middle at their September meeting. 00:02:52.042 --> 00:02:57.600 position:50% align:middle The committee monitors income and expenditures and program activities against projections and presents 00:02:57.600 --> 00:03:00.099 position:50% align:middle quarterly financial statements to the Board. 00:03:00.099 --> 00:03:03.910 position:50% align:middle Prior to every Board meeting, the finance committee goes over those reports and then 00:03:03.910 --> 00:03:06.228 position:50% align:middle forwards them on and recommends them to the Board of directors. 00:03:06.228 --> 00:03:12.240 position:50% align:middle The committee oversees the financial reporting processes, the systems of internal accounting and 00:03:12.240 --> 00:03:17.580 position:50% align:middle financial controls, and the performance of the independence of the auditors. 00:03:17.580 --> 00:03:20.200 position:50% align:middle The committee recommends to the Board, the appointment of firms to serve 00:03:20.200 --> 00:03:22.970 position:50% align:middle as independent auditors, and the finances of the organization are 00:03:22.970 --> 00:03:24.920 position:50% align:middle audited every year. 00:03:24.920 --> 00:03:29.270 position:50% align:middle Our transparent reports are conducted yearly and we've always had good audit reports. 00:03:29.270 --> 00:03:33.740 position:50% align:middle And lastly, the finance committee makes recommendations to the Board with respect to the investment policy and 00:03:33.740 --> 00:03:40.170 position:50% align:middle assures the organization maintains adequate insurance coverage. 00:03:40.170 --> 00:03:44.670 position:50% align:middle And the desired impact of the committee work is to provide adequate financial resources to fund the 00:03:44.670 --> 00:03:50.810 position:50% align:middle tactical plans necessary to execute NCSBN strategic initiatives over the long-term, 00:03:50.810 --> 00:03:55.550 position:50% align:middle and that supports the public protection mission of the organization. 00:03:55.550 --> 00:04:01.120 position:50% align:middle To establish a benchmark for the operating reserves to help ensure financial stability and by policy, 00:04:01.120 --> 00:04:06.750 position:50% align:middle we are required to keep at least 25% of the annual operating budget in the operating reserves. 00:04:06.750 --> 00:04:10.740 position:50% align:middle We established a capital reserve amount that provides the flexibility for the organization 00:04:10.740 --> 00:04:16.070 position:50% align:middle to enhance quality, introduce new program elements, and grow without compromising or jeopardizing core 00:04:16.070 --> 00:04:19.110 position:50% align:middle program delivery to nursing regulatory bodies. 00:04:19.110 --> 00:04:20.597 position:50% align:middle And that total's $25 million. 00:04:20.597 --> 00:04:25.670 position:50% align:middle We like to keep both the operating and capital reserves at high levels. 00:04:25.670 --> 00:04:30.172 position:50% align:middle And lastly, we established a long-term Board-designated fund to supplement the program revenue, 00:04:30.172 --> 00:04:36.390 position:50% align:middle and the NCSBN investment portfolio has returned $166 million over the last 10-year period 00:04:36.390 --> 00:04:41.888 position:50% align:middle through FY-21. 00:04:41.888 --> 00:04:47.232 position:50% align:middle And so, for our source of funds, a total of 66% of the total revenue comes from NCLEX 00:04:47.232 --> 00:04:49.750 position:50% align:middle for licensure in the U.S. 00:04:49.750 --> 00:04:55.573 position:50% align:middle We receive 6% from NCLEX in Canada, 6% for nurses' license verification fees, 00:04:55.573 --> 00:04:58.670 position:50% align:middle and 2% for the learning extension. 00:04:58.670 --> 00:05:05.260 position:50% align:middle A total of 11% of the revenue budgeted for FY-22 comes from the accumulated earnings on investments. 00:05:05.260 --> 00:05:10.390 position:50% align:middle And NCSBN budgets and amount equal to the long-run average annual expected return on the investment 00:05:10.390 --> 00:05:13.974 position:50% align:middle portfolio to supplement program operating revenues. 00:05:13.974 --> 00:05:18.750 position:50% align:middle And this amount will vary from the actual return in any given year because actual investment returns are 00:05:18.750 --> 00:05:21.510 position:50% align:middle dependent upon the changing conditions in the financial market. 00:05:21.510 --> 00:05:25.850 position:50% align:middle And as we all know, those have been very significantly from year to year. 00:05:25.850 --> 00:05:30.646 position:50% align:middle All other sources of operating revenue combined total less than 1% of NCSBN's income budget. 00:05:30.646 --> 00:05:35.530 position:50% align:middle And the other income includes, meeting registration fees, associate member fees, 00:05:35.530 --> 00:05:39.590 position:50% align:middle CE course revenue, and publication sales revenue. 00:05:39.590 --> 00:05:44.820 position:50% align:middle In addition to the program revenues and investment earnings, 11% of FY-22 support was planned to come 00:05:44.820 --> 00:05:46.850 position:50% align:middle from the financial reserves. 00:05:46.850 --> 00:05:52.008 position:50% align:middle And that's a broad overview of our revenue sources. 00:05:52.008 --> 00:05:55.280 position:50% align:middle And how we use those funds is depicted in this graph. 00:05:55.280 --> 00:06:01.151 position:50% align:middle NCLEX is also our largest expenditure at 61 cents of every dollar spent goes to directly support exams. 00:06:01.151 --> 00:06:06.750 position:50% align:middle And the exams department also receives substantial support from the other 39 cents for occupancy, 00:06:06.750 --> 00:06:13.050 position:50% align:middle administrative services, information, technology, communications, they all provide support to exams. 00:06:13.050 --> 00:06:17.670 position:50% align:middle Combined expenditures on other program activities to assist the Board, including committees, meetings, 00:06:17.670 --> 00:06:22.788 position:50% align:middle research, NLC legislative support, and online offerings for members comprises 15% 00:06:22.788 --> 00:06:24.649 position:50% align:middle of the total budget. 00:06:24.649 --> 00:06:28.270 position:50% align:middle Nursys, including ORBS and e-Notify, is 4%. 00:06:28.270 --> 00:06:32.203 position:50% align:middle And the IT infrastructure is equal to 9%. 00:06:32.203 --> 00:06:38.096 position:50% align:middle And a combined total expenditures on the supporting services, which includes governance for the Board and 00:06:38.096 --> 00:06:43.190 position:50% align:middle executive management, communications, finances, and HR equals 9%. 00:06:43.190 --> 00:06:49.180 position:50% align:middle And the occupancy, which is primarily our office spaces is 2%. 00:06:49.180 --> 00:06:57.620 position:50% align:middle So, that's a broad overview of how we use our funds at national council. 00:06:57.620 --> 00:06:59.900 position:50% align:middle Now, on this slide, we're going to talk about the fund balance. 00:06:59.900 --> 00:07:05.430 position:50% align:middle In looking to the projected value of the fund balance from FY-23, through FY-26, 00:07:05.430 --> 00:07:08.668 position:50% align:middle you can see that the fund in this chart is about $273 million. 00:07:08.668 --> 00:07:09.630 position:50% align:middle Thank you. 00:07:09.630 --> 00:07:16.000 position:50% align:middle Eleven percent of FY-22 operating will come from the financial reserves as shown in the source 00:07:16.000 --> 00:07:17.750 position:50% align:middle of fund slide. 00:07:17.750 --> 00:07:21.980 position:50% align:middle We will project that we will need to continue to use some of those reserve funds to support operations 00:07:21.980 --> 00:07:24.050 position:50% align:middle resulting in a decline in the reserve balance. 00:07:24.050 --> 00:07:29.417 position:50% align:middle And you will see a slight decline in this graph, but that does not cause for immediate concern. 00:07:29.417 --> 00:07:34.980 position:50% align:middle We will still have a very healthy investment balance even with having to use some of those operating or fund 00:07:34.980 --> 00:07:37.470 position:50% align:middle balances to provide support to our projects. 00:07:37.470 --> 00:07:42.010 position:50% align:middle And while this will not jeopardize NCSBN's financial stability in the short term, 00:07:42.010 --> 00:07:49.200 position:50% align:middle the finance committee reviews and consider a strategy to balance the budget over the longer term. 00:07:49.200 --> 00:07:53.750 position:50% align:middle The committee recommended to the Board to consider increasing annual operating revenue to a level that 00:07:53.750 --> 00:07:56.620 position:50% align:middle could sustain operations over the long term. 00:07:56.620 --> 00:08:01.206 position:50% align:middle However, the U.S. equities rose to all-time highs during the third quarter of FY-21, 00:08:01.206 --> 00:08:04.567 position:50% align:middle and the investment portfolio increased significantly in value. 00:08:04.567 --> 00:08:09.250 position:50% align:middle The current financial position has been partially obtained through the phenomenal returns 00:08:09.250 --> 00:08:11.058 position:50% align:middle in the financial markets. 00:08:11.058 --> 00:08:15.750 position:50% align:middle And although future returns are uncertain, and the gain seen over the past few years are unlikely 00:08:15.750 --> 00:08:20.740 position:50% align:middle to be sustained, but the Board determined that the impact of the investment returns on the reserve value 00:08:20.740 --> 00:08:27.280 position:50% align:middle along with the reduction in spending for meetings, travel, and other expenditures associated with COVID-19 00:08:27.280 --> 00:08:30.992 position:50% align:middle allowed for a longer timeline to address the forecast of the decline in the fund balance. 00:08:30.992 --> 00:08:34.720 position:50% align:middle And the Board determined that it would not propose a fee increase at this time, 00:08:34.720 --> 00:08:39.940 position:50% align:middle but may review the recommendations in the future should the fiscal conditions change. 00:08:39.940 --> 00:08:49.070 position:50% align:middle And we will continue to closely monitor the financial performance and update the forecast as required. 00:08:49.070 --> 00:08:54.010 position:50% align:middle So, in summary, some of the performance outcome measurements that the finance committee looks at is 00:08:54.010 --> 00:08:58.430 position:50% align:middle for a strong financial position that provides an internal source of funds that allows the financial 00:08:58.430 --> 00:09:04.330 position:50% align:middle flexibility so that we can expand our services to the members, and to provide a financial stability 00:09:04.330 --> 00:09:09.000 position:50% align:middle by planning operating budgets that we can support over the long-term, and preparing budgets that link 00:09:09.000 --> 00:09:13.555 position:50% align:middle financial resource allocation to the strategic initiatives and mission of the organization. 00:09:13.555 --> 00:09:18.960 position:50% align:middle And to have an investment policy and strategy in place that produces the desired return on the financial 00:09:18.960 --> 00:09:23.210 position:50% align:middle investments within our risk tolerances of NCSBN. 00:09:23.210 --> 00:09:27.780 position:50% align:middle We received an audit opinion from the independent auditors, and there are policies in place that guide 00:09:27.780 --> 00:09:29.665 position:50% align:middle good internal control practices. 00:09:29.665 --> 00:09:34.010 position:50% align:middle And we've engaged auditors in the past to conduct a fraud risk assessment, 00:09:34.010 --> 00:09:40.260 position:50% align:middle to ensure that all best practices for maintaining control are in place. 00:09:40.260 --> 00:09:42.440 position:50% align:middle And that completes your finance report this year. 00:09:42.440 --> 00:09:45.650 position:50% align:middle It's a true pleasure to serve as your NCSBN treasurer. 00:09:45.650 --> 00:09:51.080 position:50% align:middle I'm honored that you've permitted us time today to update you on the financial standings of NCSBN as we 00:09:51.080 --> 00:09:55.310 position:50% align:middle work today, tomorrow, and most importantly together to continue to lead and 00:09:55.310 --> 00:09:59.440 position:50% align:middle prepare our organization towards a strategically sound financial future. 00:09:59.440 --> 00:09:59.940 position:50% align:middle Thank you. 00:10:04.260 --> 00:10:07.000 position:50% align:middle [silence]