2022/23 Audit Report

By James Hardenberg, CPA, CGMA, CAE, NJCPA Chief Learning Officer and Interim CFO – December 1, 2023
2022/23 Audit Report

The combined financial statements for the NJCPA and Affiliates (NJCPA Education Foundation and NJCPA Scholarship Fund) for the year ended May 31, 2023, have been published.

Fiscal 2023 began with a full-fledged resurrection of many in-person events after two years of mostly virtual events due to the lingering effects of the coronavirus pandemic. Compared to the latter part of fiscal 2022, when three NJCPA chapters began to bring members back for a total of seven in-person training sessions, fiscal 2023 included 40 chapter in-person educational events, in addition to social gatherings, along with the Annual Convention & Expo in June and the Atlantic City CPE Cluster in August.

On a combined basis, unrestricted revenues increased by 6.8% from the prior year, with much of the increase attributable to chapter, Convention and Cluster educational program fees, as well as a reduction in the market value decline for all investment portfolios combined. A material employee retention credit (ERC) refund was also received in May, which helped buoy the fiscal year-end results.

New Jersey Society of CPAs

For the Society, membership dues were slightly lower compared to fiscal 2022 due to a reduction in dues-paying members. Overall, membership declined by the end of May 2023. To help address this challenge, a Pipeline Task Force was formed with the goal to help stabilize and maintain membership market share in the future.

Peer review fees were flat compared to fiscal 2022, as a small increase in rates helped offset ongoing firm mergers, acquisitions and practitioner retirements. The ERC refund helped boost the year-end results and offset the market value decrease in the NJCPA investment portfolio. Total expenses increased by 11% as the pandemic continued to recede, with more printing and distribution activities, more travel and meetings, and the conclusion of the NJCPA CEO search.

NJCPA Education Foundation

The Foundation continued to operate and attack in a “virtual-first” mode but also began phasing back into in-person events. As mentioned earlier, NJCPA chapters began hosting events again, though at a reduced level compared to pre-pandemic times. The Convention and Atlantic City CPE Cluster were also brought back after a two-year hiatus. Educational program fee revenue increased by 36% compared to fiscal 2022, with a corresponding increase in the direct costs of education programs due to food, beverage, audio visual and other site-related charges that are not found with virtual programs. The Foundation ended the fiscal year with a negative change to net assets of $142,000, and though a negative result was expected for this second fiscal year of the 2021-2023 licensing cycle, it was better than budget.

NJCPA Scholarship Fund

With NJCPA chapters only beginning to phase back into in-person events after a soft relaunch in fiscal 2022, chapter contributions to the Fund were again held back for a third year in a row. However, the Fund still managed to provide $309,000 in scholarships during the fiscal year. The Fund’s investment portfolio also experienced a similar decline as the Society and the Foundation, with the overall results being a $203,000 negative change to net assets, which was also better than budget.