Chief Financial Officer's Report on Fiscal Year 2011

As we “survive” these tough economic times, I am taking this opportunity to do something that has never been done before and that is give you insight into some of the inner financial workings of our Chapter that you need to know.

In case you’ve ever wondered about the financial stability of the PMIWDC Chapter, rest assured that we are on a solid foundation as we continue to increase value and opportunities for you as our stakeholders.

Fortunately, the Board of Directors decided to operate our Chapter as a business a couple of years before the economic downturn. This included maintaining sufficient liquidity for Chapter activities while following Generally Accepted Accounting Principles and PMI guidelines.

We aligned budgets, expenses and revenue streams with the respective operational Vice Presidents, including our current budget of $1.1M for 2012. VPs conduct budget review meetings monthly to keep an eye on expenses while prudently balancing your needs, risks and revenue streams.

PMIWDC has five primary revenue sources: Sponsorships, advertising, PMP Prep classes, seminars and dues. Dues accounted for $354,000, about 30% of our total revenue for 2011.

On the expense side of the ledger, PMIWDC’s primary expenses on behalf of our members were: Business services; networking (dinners, luncheons, etc.); and professional development (classes, seminars, scholarships).

In 2011, PMIWDC provided almost $10,000 in scholarships for under- and post- graduate studies in Project Management. We also funded a $75,000 endowment with the Project Management Institute Education Foundation to provide perpetual scholarships.

PMIWDC uses the services of an independent audit firm to annually review the Chapter’s operations, financial processes, internal controls and governance activities.

Following is a summary of our last two audits

“The governance and financial process audit disclosed that the financials and budget processes in effect are thorough and no material weaknesses or deficiencies in internal controls or risk management were identified.”

In addition, they found that

“The Chapter’s portfolio is invested entirely in Certificates of Deposit. In addition, there are high cash balances in the principal bank account that could be used to improve investment income. Fiduciary responsibility requires an “informed prudent investor” approach that assumes a need to maintain some risk to earn a return growth higher than inflation.”

The Board approved an Investment Policy last fall and established an Investment Committee who is considering low risk funds that provide the opportunity for real growth over the long-term. Liquidity remains paramount in the form of cash reserves to cover 18 months of non-revenue generating expenses or $200,000, whichever is greater.

The Chapter is chartered by the Project Management Institute, Inc. and separately incorporated in Virginia as a non-profit, tax-exempt organization under Internal Revenue Code 501(c) 6. As such, we file Form 990 annually.

Bottom-line, PMIWDC is financially sound to continue serving your educational and networking needs while growing the profession!