Bar News - January 20, 2016
NH Bar Association Gets Strong Audit and Efficiency Results
The NH Bar Association Board of Governors recently received word that the NHBA and its subsidiary, NHBA Insurance Agency, had received a “clean” audit and well above-average efficiency rating from external auditors Nathan Wechsler & Company.
A clean audit means that the financial statements for both organizations conformed to all generally accepted accounting principles. Nathan Wechsler’s team of certified public accountants performed the audit in September 2015 for the fiscal year ended May 31, 2015.
The audit strategy includes consideration of:
- Inherent risk within the NHBA – i.e., the susceptibility of the financial statements to material error or fraud, due to ineffective controls.
- The control environment and the possibility that the control systems and procedures may fail to prevent or detect a material error or fraud.
- Information about systems and the computer environment in which financial records and related systems operate.
- Recent results of operations and significant events.
As part of the audit, Nathan Wechsler compared financial results with similar organizations. Of note is the program efficiency rating, which is considered the most important non-financial metric for a nonprofit and is frequently an indicator of how committed an organization is to its programs.
NHBA received a 96 percent program efficiency rating (percent of total organization expenses utilized for programs and services), much higher than the benchmark (70 percent) and “real time” rating (82 percent) compiled from data accessed by the audit group (see accompanying graph). NHBA’s rating is compared to other state bar associations and foundations, as well as other types of professional societies/associations, based on a revenue range of $1 - $10 million, throughout the United States.
The benchmark is set by Sageworks, national financial analysts, according to where a healthy business in the industry would perform. In addition to information from the Sageworks database, the benchmark includes external research and is a target point for organizations to strive toward.
The “real time” measurement reflects the actual performance, in real time, within the industry and is derived from the database, which is built by users who submit their clients’ financial results. Thirty-seven clients reported real time measurements, which were compared against the NHBA program efficiency rating.