AVMA News

Treasurer Goldman prepares to end his term, leaving behind a financially healthy Association

The Connecticut-based veterinarian explains AVMA’s budgeting process, gives advice to successor
December 01, 2022
Dr. Goldman
Dr. Arnold Goldman

With his sixth and final year as AVMA treasurer coming to a close, Dr. Arnold Goldman spoke with AVMA News about the financial health of the Association and how the treasurer works with AVMA leaders to ensure their fiduciary responsibilities are met. The following responses have been lightly edited for length and clarity.

Q: With a term that spans six years, what are the AVMA treasurer’s responsibilities?

A: The treasurer serves as a nonvoting member of the AVMA Board of Directors with a primary responsibility of oversight and reporting of financially relevant information, on all aspects of AVMA activity. The treasurer chairs the Budget and Finance Review Committee and also works collaboratively with the Strategy Management Committee and its chair. Together, these Board committees set priorities, weigh potential member value in proposed new programming, and then make recommendations to the Board. The treasurer is intimately involved with every step of this process and by extension with all AVMA activities. In carrying out these duties, the treasurer is charged with ensuring the Board follows established AVMA fiscal policies and processes in its decision making.

Finally and perhaps most significantly, the treasurer is charged with the delivery of clear and accurate communication on financial and strategic matters to the AVMA House of Delegates and to the membership. So, while on the surface it would seem to be a narrowly tailored role, in fact the treasurer’s role is expansive. The trust of members in the Board’s fiscal diligence is in the treasurer’s hands, and transparency and agile communication serve to assure our members that their funds are being responsibly used to further their professional interests.

Q: What do AVMA members need to know about the financial health of their association?

A: The AVMA is financially healthy. There are several reasons for this. We have and follow written financial policies that comply with industry standards for reserves, spending, and funding allocation. We have an established, written process for budgeting and matching operating revenue to operating expenses. We have a reserves policy that ensures both solvency as well as the breathing room necessary to implement strategic programming to serve members, despite any adverse impact from the larger economy. We maintain between 50% and 150% of operating expenses in reserve, which ensures continued operations in the face of downturns and, during favorable economic periods, funds strategic initiatives to serve members’ needs. The AVMA also employs highly competent financial staff to oversee day-to-day management of member funds. The AVMA Audit Committee, in concert with an independent, outside financial auditor, regularly reviews and certifies our financial statements as accurate and in keeping with generally accepted accounting principles.

Q: What process does the Board follow when deciding matters that affect the members’ funds?

A: The AVMA operating budget process is a clean-sheet endeavor that begins at the departmental level within AVMA. Beginning in the spring, each AVMA department evaluates its current responsibilities and proposes a departmental operating budget for the year. Once all departments report, the then unified-draft operating budget is evaluated by our CEO and Finance and Business Services Division, and adjustments are made in light of expected revenue and strategic priorities. Thereafter, the draft operating budget is shared with the Budget and Finance Review Committee, which is chaired by the treasurer. The BFRC then meets for its evaluation and makes further adjustments before sharing the draft operating budget with the Board with a recommendation regarding its approval. The Board meets each November to discuss, possibly alter, and vote on that draft. Once Board passage occurs, the draft operating budget becomes the final operating budget for the year.

An additional aspect of annual budgeting is allocating funds from reserves for the Strategic Operating Plan Fund. Each year, the Board funds this account at a fixed amount, based on existing economic conditions, expected investment revenue and the anticipated costs of new strategic programming directed toward member needs. This account enables use of investment earnings for new programming while allowing for flexibility in strategic spending to enhance member value.

Q: How well would you say the Board executed its fiscal responsibilities during your time as treasurer?

A: The financial policies that are in place and the budget process ensure that the Board executes its fiduciary duties responsibly, transparently, and professionally. The budget process, along with the safety valve of the Strategic Operating Plan Fund, as enabled by our reserves, facilitates the Board’s ability to operate diligently while also meeting members’ needs. Out-of-budget cycle funding requests are few and scrutinized not just for inherent value, but for the appropriateness of referral to the next budget cycle. There is a genuine and diligent desire by the Board to hew to process as a mark of responsible management. As treasurer, the appreciation by the Board of the necessity of adherence to policy and process means I am doing my job properly and maintaining member confidence.

Q: How is the AVMA investment portfolio overseen and managed?

A: The AVMA investment portfolio, which is also the vehicle through which our reserves are managed, is held in various accounts managed by an external investment banking and wealth management firm. The Board has established a written investment policy statement for the AVMA, which guides the investment parameters and decisions overseen by our investment managers. Several times each year, the Budget and Finance Review Committee and the Board of Directors review the IPS for currency relative to the AVMA’s needs and existing economic conditions. At each Board meeting and in between as necessary, my formal treasurer’s reports include an assessment of the state of our investments and any recommendations for change.

Q: What advice would you give your successor, Dr. Jon Pennell?

A: I could not be more pleased with the Board for having elected Dr. Jon Pennell to follow me as treasurer. When he takes office in July 2023, Dr. Pennell will become the 23rd treasurer of the AVMA. Until then and as treasurer-elect, Dr. Pennell will work closely with me in all aspects of my duties such that he will be fully ready to assume his duties on his first day as AVMA treasurer. Treasurer-elect mentorship is considered an essential part of the treasurer’s duties during the final year of the six-year term. It is my hope that this tradition will carry forward to the 24th treasurer and beyond—and in the decades to come.

With respect to advice, I have conveyed to Dr. Pennell that it will be his role to effectively communicate with the Board, to educate new Board members about and help the Board to comport with established AVMA policy and process, to communicate effectively with the House of Delegates, to work collaboratively with financial staff, and overall to help the Board make responsible and strategic financial decisions. He is highly knowledgeable, and I have no doubt he will be prepared and effective from the outset, and I wish him every success.

Q: Any parting thoughts?

A: My six-year term as the AVMA’s 22nd treasurer has been the high point of my professional career to date and an absolute joy. I have learned at least as much as I have contributed and, I hope, left the AVMA better than ever. The volunteer leaders I’ve worked with have been uniformly and unquestionably committed to the veterinary medical profession and to the AVMA’s role in it. While disagreement in debate regularly occurs, the respect and collegiality with which difference of opinion is expressed demonstrates the overriding passion every leader I’ve worked with holds for our profession and says a great deal about the commitment we all have to the profession we love. Further, many have also become treasured friends, a personal benefit that involvement in leadership regularly offers. The AVMA is in good hands, and I have no doubt our profession will, in due time, overcome today’s challenges as it evolves to meet the future.

To all our members, thank you for the opportunity to serve.

A version of this article appears in the January 2023 print issue of JAVMA.