Division Operates in Background To Support APA’s Mission

Under the leadership of Terri Swetnam, chief financial officer for APA and its subsidiaries, the Finance, Contracts, and Administrative Services departments provide financial, procurement, and infrastructure support to the five, but separate, entities that make up the APA central office:

• The American Psychiatric Association handles all membership activities.

• American Psychiatric Publishing Inc. (APPI) carries out the scientific, educational, and publishing activities of the affiliated group.

• The American Psychiatric Institute for Research and Education (APIRE) conducts all research work funded by government and private agencies.

• The American Psychiatric Foundation (APF) conducts fund-raising and grant-making activities.

• APAPAC (APA’s political action committee), established in 2001, raises donations and makes contributions to federal candidates and committees.

The Finance Department has 17 staff members, with an annual budget of $1.9 million. Three accountants are responsible for the accounting operations of each of the entities, ensuring compliance with federal tax requirements and government grant-reporting requirements, and supporting the year-end audit. They ensure that all transactions are properly coded to the correct entity, that intercompany transfers are documented and approved, and that the information in the general ledger system—which is used to prepare financial statements for the Board, finance oversight committees, and auditors—matches information in the subsystems.

The Association has four major components of its financial system—the general ledger system, from which the statements are prepared; the publishing subsystem, in which detailed information about each book transaction is maintained; the advertising subsystem; and the membership system. Each month the accounting staff ensures the information in the general ledger, or finance system, matches the information in the subsystems—a complex task to say the least!

Five staff handle disbursements—including payroll, vendor invoices, and travel reimbursements. Each year, staff prepare more than 6,500 payroll transactions and 11,000 other disbursements. Requests for vendor checks and travel reimbursements are prepared and approved within the department. They are then sent to the disbursements staff, who verify that the request is consistent with the Association’s policies. The department is committed to mailing out checks within 15 calendar days from receipt of the request.

Three staff are responsible for the budget, cash, and investment-management activities of all five entities. The budget process starts in March with the first Finance and Budget Committee meeting. A budget call goes out to staff in May or June, with information regarding budgetary limitations, inflationary factors, and so on. Budgets are submitted by the departments in July, and the budget staff analyzes and prepares several perspectives for the executive staff. Inevitably, there is a gap between the revenue forecasts and the spending requests for the coming year. The budget staff, working with the budget coordinators in each division, work toward a proposed and balanced budget for the executive team’s review. Once approved by the medical director, the budget goes to the Finance and Budget Committee at its fall meeting.

In addition to the budget, staff monitor the Association’s investment portfolio, working closely with our investment advisors and the Investment Oversight Committee to ensure a balance between protecting the principal of the portfolio and experiencing a positive return.

Finally, the budget team is responsible for monitoring the cash balance of the Association. This involves knowing how much is in each of the 11 checking accounts daily, forecasting what checks will clear the accounts that day, and transferring funds between accounts as is appropriate to ensure that no accounts are overdrawn.

The finance department has six staff who oversee cash receipts—three of these staff are integrated into the Membership Department and are responsible for ensuring that dues for 28,000 members are allocated to the correct member and for responding to member billing inquiries; three support the cash receipts for all other areas (publishing, annual meetings, advertising revenue, and mailing-list sales).

Payments for advertising, annual meeting registrations, and member dues are sent to a post-office box—which is a “lockbox” managed by our bank. Funds are deposited into one of the Association’s 11 checking accounts, and staff are responsible for ensuring the detailed information from the bank matches the bank statements and is properly recorded into the financial system.

The finance department, in conjunction with staff members of the subsidiaries, is responsible for ensuring that the financial information is well documented, controlled, and accessible for the external auditors each year. The auditors perform a consolidated audit of APA, with individual audits for APPI, APIRE, APF, and APAPAC. In addition, staff support the audit required by the government for its awards audits of the employee benefit plans and prepares tax returns for all entities. In 1999 the auditor’s letter to management contained 44 “findings” (instances of internal-control weaknesses); in 2002 there were no internal-control weaknesses and only two unresolved recommendations and one new recommendation.