2006-2005 June 30 The Florida Bar Financial Statements

7/27/2019 2006-2005 June 30 The Florida Bar Financial Statements

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The Florida Bar and SubsidiariesFinancial Statements andSupplemental Information

June 30, 2006 and 2005

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The Florida Bar and SubsidiariesTable of ContentsJune 30, 2006 and 2005

Independent Auditors' Report 1 - 2Management's Discussion and Analysis 3-7Financial Statements

Consolidated Statements of Net Assets 8Consolidated Statements of Revenues, Expenses, and Changes in Net Assets 9Consolidated Statements of Cash Flows 10 - 11Notes to Consolidated Financial Statements 12 - 24

Supplementary InformationConsolidating Schedule of Statement of Net Assets as of June 30, 2006 25 - 26Consolidating Schedule of Statement of Revenues, Expense and Changesin Net Assets for the year ended June 30, 2006. 27Consolidating Schedule of Statement of Cash Flows for the year endedJune 30, 2006. 28 - 29General Fund Schedule of Budgeted and Actual Revenues and Expenses

for the year ended June 30, 2006. 30 - 38General Fund Reconciliation of Revenues and Expenses on a Budgetary Basis toTotals Per the Consolidating Schedule of Statement of Revenues, Expensesand Changes in Net Assets for the year ended June 30, 2006. 39Clients' Security Fund Schedule of Budgeted and Actual Revenues andExpenses fo r the year ended June 30, 2006. 40Certification Fund Schedule of Budgeted and Actual Revenues and Expensesfor the year ended June 30, 2006. 41Sections Fund Schedule of Budget and Actual Revenues and Expenses for theyear ended June 30, 2006. 42 - 43

Other ReportsReport on Internal Control Over Financial Reporting and On Compliance andOther Matters Based on an Audit of Financial Statements Performed inAccordance with Government Auditing Standards 44 -4 5


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INDEPENDENT AUDITORS' REPORT

Board of GovernorsThe Florida BarTallahassee, Florida

We have audited the accompanying consolidated statements of net assets of TheFlorida Bar and Subsidiaries as of June 30, 2006 and 2005, and the related consolidatedstatements of revenues, expenses and changes in net assets, and cash flows for theyears then ended. These consolidated financial statements are the responsibility of TheFlorida Bar's management. Our responsibili ty is to express an opinion on theseconsolidated financial statements based on our audits.We conducted our audits in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide a reasonable basis forour opinion.In our opinion, the consolidated financial statements referred to above present fairly, in allmaterial respects, the consolidated financial position of The Florida Bar and Subsidiaries asof June 30, 2006 and 2005, and the consolidated results of their operations and their cash'nows for the years then ended in conformity with accounting principles generally acceptedin the United States of America.


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Board of GovernorsThe Florida BarPage 2

Our audits were conducted for the purposes of forming an opinion on the consolidated financialstatements taken as a whole. Management's discussion and analysis as listed in the table ofcontents, is not a required part of the consolidated 'financial statements but is supplementaryinformation required by the Government Accounting Standards Board. We have applied certainlimited procedures. which consisted principally of inquiries of management regarding the methodsof measurement and presentation of the supplementary information. However, we did not audit theinformation and express no opinion on it.Our audits were performed for the purpose of forming an opinion on the basic consolidatedfinancial statements of the Florida Bar and Subsidiaries taken as a whole. The supplementaryinformation as listed in the table of contents, is presented for the purposes of additional analysisand is not a required part of the basic consolidated financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basic consolidated financialstatements and. in our opinion. is fairly stated in all material respects in relation to the basicconsolidated financial statements taken as a whole.

~ ~ ~ ~ ~ ~ L Tallahassee, FloridaAugust 18, 2006


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Management's Discussion and Analysis


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The Florida Bar and SubsidiariesManagement's Discussion and AnalysisThe Florida Bar is the statewide professional and regulatory organization for lawyers with morethan 79,000 members. Headquartered in Tallahassee, the Bar is a unified state bar by rule of theSupreme Court of Florida. Membership in the Florida Bar is a necessary component of SupremeCourt of Florida regulation of all lawyers licensed to practice law in Florida (Article IV, Section 15,Florida Constitution). The foundation for the organization is built on a philosophy of equity andethics. Through its programs and services, the Bar supports this philosophy with four pillars thatfunction as the mission of The Florida Bar: providing public service, protecting rights, promotingprofessionalism and pursuing justice.

Overview of the Financial StatementsThis annual report consists of three parts - management's discussion and analysis, the basicconsolidated financial statements, and an optional section that presents supplementaryinformation. The supplementary information includes consolidating statements and comparisons ofactual results to budgeted results. The basic consolidated financial statements present theconsolidated financial position, results of operations, and cash flows of the Florida Bar and itssubsidiaries. The Florida Bar performs one overall activity as the statewide professionalassociation of lawyers. Its activity is accounted for as a proprietary type enterprise fund because itcharges fees to provide its services similar to a business enterprise.The Statement of Net Assets includes all of The Florida Bar's assets and liabilities. The net assetsare the difference between The Florida Bar's assets and liabilities. The Statement of Revenues,Expenses, and Changes in Net Assets include all of The Florida Bar's revenues and expensesregardless of when the cash is received or paid. The change in net assets is one way- to measureThe Florida Bar's financial health or position. A Statement of Cash Flows provides additionalinformation regarding the change in The Florida Bar's cash position.

Summary of OperationsAt June 30, 2006 and 2005, The Florida Bar had $52,906,350 and $45, 133,643, respectively intotal assets. Of this amount $46,034,465 and $38,038,574 was held in cash and investments and$5,904,229 and $6,220,716 was invested in capital assets at June 30, 2006 and 2005,respectively. The primary liability at June 30, 2006 and 2005 was deferred revenue of $9,659,687and $7,605,414, respectively, resulting 'from advance collection of member fees and prepaymentsfor Continuing Legal Education registrations. Our net assets were $36,311,836 and $31,112,407at June 30, 2006 and 2005, respectively.These amounts are in line with the prior year's balances given the current changes in net assets.The original operating budgets for the General Fund for the years ended June 30, 2006 and 2005,approved by the Florida Supreme Court, planned on an increase in net assets of $482,000 and$454,000, respectively. After Board of Governor amendments, the planned increase became$726,000 and $105,000, respectively. General Fund actual operations resulted in an increase innet assets of $2,616,000 and $2,967,000, respectively. This improved performance resultedprimarily from better than planned investment returns, midyear implementation of the multijurisdictional practice rule in 2006, and efficiencies in operations of the various departments of TheFlorida Bar. Included in the supplemental information is an actual to budget comparison for eachdepartment.

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The Florida Bar and SubsidiariesManagement's Discussion and AnalysisFor the year ended June 30, 2006 and 2005, The Florida Bar's budget funded most departments ata continuation level. No significant increased activity was implemented or planned. However,detailed program reviews of the Lawyer Regulation and Lawyer Advertising Departments continuedduring the years.The final report of the Lawyer Advertising rule has been received and was filed with The SupremeCourt of Florida. No significant financial changes are expected to occur from these requested rulechanges. The review of the Lawyer Regulation Department was completed in late 2005-06. Itsrecommendation to centralize all complaint intake in Tallahassee will be implemented during the2006-07 fiscal year. The other recommendations have been referred to various committees.These committees are charged with reporting to the Board of Governors ways to implement thestudy commission recommendation or provide alternatives.

CONDENSED CONSOLIDATED FINANCIAL INFORMATIONCONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS

AssetsCurrent assetsCapital assets, net

Total assetsLiabilities

Current liabilitiesOther liabilities

Total liabilitiesNet assets

Invested in capital assets, net of related debtRestricted for scholarshipsUnrestricted

Total net assetsTotal liabilities and net assets

2006$ 47,002,121

5,904,229$ 52,906,350

$ 12,556,5354,037,979

16,594,514

3,854,68625,248

32,431,90236,311,836

$ 52,906,350

2005 Change$ 38,912,927

6,220,716$ 45, 133,643

$$

8,089,194(316,487)

7,772,707

$ 9,943,9754,077,261

14,021,236$ 2,612,560

(39,282)2,573,278

3,999,66025,792

27,086,95531,112,407

(144,974)(544)

5,344,9475,199,429

$ 45, 133,643 $ 7,772,707

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The Florida Bar and SubsidiariesManagement's Discussion and AnalysisCONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS

2005 2004 ChangeAssets

Current assets $ 38,912,927 $ 37,266,131 $ 1,646,796Capital assets, net 6,220,716 6,655,068 (434,352)

Total assets $ 45,133,643 $ 43,921,199 $ 1,212,444Liabilities

Current liabilities 9,943,975 $ 12,764,256 (2,820,281)$ $Other liabilities 4,077,261 4,089,167 (11,906)

Total liabilities 14,021,236 16,853,423 (2,832,187)Net assets

Invested in capital assets, net of related debt 3,999,660 4,274,760 (275,100)Restricted for scholarships 25,792 22,542 3,250Unrestricted 27,086,955 22,770,474 4,316,481

Total net assets 31,112,407 27,067,776 4,044,631Total liabilities and net assets $ 45,133,643 $ 43,921,199 $ 1,212,444For more detailed information, see the accompanying Consolidated Statements of Net Assets.

CONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSESAND CHANGES IN NET ASSETS

2006 2005 ChangeOperating revenues $ 36,834,025 $ 35,118,962 $ 1,715,063Operating expenses (33,968,523) (32,417,175) (1 ,551,348)

Net operating revenues 2,865,502 2,701,787 163,715Non-operating revenues 2,505,173 1,520,124 985,049Non-operating expenses (171,246) (177,280) 6,034

Net non-operating revenues 2,333,927 1,342,844 991,083Increase in net assets 5,199,429 4,044,631 1,154,798Net assets, beginning 31,112,407 27,067,776 4,044,631Net assets, ending $ 36,311,836 $ 31,112,407 $ 5,199,429

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The Florida Bar and SubsidiariesManagement's Discussion and AnalysisCONDENSED CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES

AND CHANGES IN NET ASSETS2005 2004 Change

Operating revenues $ 35,118,962 $ 33,184,744 $ 1,934,218Operating expenses (32,417,175) (30,980,283) (1 ,436,892)Net operating revenues 2,701,787 2,204,461 497,326

Non-operating revenues 1,520,124 2,287,232 (767,108)Non-operating expenses (177,280) (231,482) 54,202

Net non-operating revenues 1,342,844 2,055,750 (712,906)Increase in net assets 4,044,631 4,260,211 (215,580)Net assets, beginning 27,067,776 22,807,565 4,260,211Net assets, ending $ 31,112,407 $ 27,067,776 $ 4,044,631For more detailed information, see the accompanying Consolidated Statements of Revenues,Expenses, and Changes in Net Assets.

CAPITAL ASSETSThe Florida Bar had invested the following in Capital Assets:June 30, 2006 2005 ChangeLand $ 1,103,060 $ 1,103,060 $Building and improvements 7,902,973 7,877,915 25,058Lanscaping and parking 120,318 120,318Equipment and furnishings 4,456,519 4,651,072 (194,553)Total, prior to depreciation 13,582,870 13,752,365 (169,495)

Accumulated depreciation (7,678,641 ) (7,531,649) (146,992)Net capital assets $ 5,904,229 $ 6,220,716 $ (316,487)June 30, 2005 2004 ChangeLand $ 1,103,060 $ 1,103,060 $Building and improvements 7,877,915 7,873,249 4,666Lanscaping and parking 120,318 120,318Equipment and furnishings 4,651,072 4,398,353 252,719Total, prior to depreciation 13,752,365 13,494,980 257,385

Accumulated depreciation (7,531 ,649) (6,839,912) (691,737)Net capital assets $ 6,220,716 $ 6,655,068 $ (434,352)Presently The Florida Bar has no plans to significantly alter its investment in capital assets.

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The Florida Bar and SubsidiariesManagement's Discussion and AnalysisDEBT

At June 30, 2006 and 2005, The Florida Bar had $2,049,543 and $2,221,056, respectivelyoutstanding in a mortgage loan. The mortgage loan is scheduled to balloon on October 15,2009. Management is evaluating its options for when the mortgage loan balloons.Management will decide to either pay the loan or refinance the balloon.

Future Financial PlanThe Florida Bar was created by the Supreme Court of Florida to assist it in regulating thepractice of law in Florida. It is primarily funded through lawyer payments of their requiredannual fee, sale of continuing education programs to lawyers and other revenue from itsbusiness partners and affiliates. There is no plan to materially change these revenue streamsfor the next two years. Accordingly, there are no present plans to materially increase the scopeor nature of the services provided to the citizens of Florida and the lawyers authorized to servethem.

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Financial Statements


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The Florida Bar and SubsidiariesConsolidated Statements of Net Assets

June 30,AssetsCurrent assets

Cash and cash equivalentsShort-term investmentsAccounts receivable, netPrepaid expenses and other assets

Total current assetsCapital assets, net

LandBuildings and improvementsLandscaping and parkingEquipment and 'furnishingsAccumulated depreciationTotal capital assets, net

Total assetsLiabilities and Net AssetsCurrent liabilities

Current portion of long-term debtAccounts payableClaims payableAccrued expensesDeferred revenuesSecurity deposits

Total current liabilitiesNon-current liabilities

Long-term debt, less current portionCompensated absences payable

Total non-current liabilitiesTotal liabilities

Net assetsInvested in capital assets, net of related debtRestricted for scholarshipsUnrestricted

Total net assetsTotal liabilities and net assets

2006 2005

$ 13,917,754 $ 12,271,87432,116,711 25,766,700405,324 672,405562,332 201,948

47,002,121 38,912,927

1,103,060 1,103,0607,902,972 7,877,915120,318 120,318

4,456,519 4,651,072(7,678,640) (7,531,649)5,904,229 6,220,716

$ 52,906,350 $ 45,133,643

$ 184,718 $ 161,7601,413,949 1,302,959478,858 139,192773,537 690,219

9,659,687 7,605,41445,786 44,43112,556,535 9,943,975

1,864,825 2,059,2962,173,154 2,017,9654,037,979 4,077,261

16,594,514 14,021,236

3,854,686 3,999,66025,248 25,79232,431,902 27,086,95536,311,836 31,112,407

$ 52,906,350 $ 45,133,643

See accompanying notes to the consolidated financial statements.- 8


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The Florida Bar and SubsidiariesConsolidated Statements of Revenues, Expenses and Changes in Net Assets

Years ended June 30, 2006 2005Operating revenues

Annual fees $ 20,284,163 $ 19,708,324Other fees 'from members 5,356,003 4,923,961Sales of products and services 7,560,103 6,956,958Advertising 2,223,308 2,069,821Young lawyers 532,811 503,845Grants and other 877,637 956,053

Total operating revenues 36,834,025 35,118,962Operating expenses

Regulation of the practice of law 13,318,143 12,947,699Cost of products and services provided to members 9,338,041 8,755,709Unauthorized practice of law 1,248,161 1,301,659Public service programs 1,999,453 1,755,396Communications with members and the public 3,550,705 3,290,697Administration 2,399,971 1,937,906Legislation 417,473 688,306Young lawyers 426,265 457,308Depreciation and amortization 667,743 766,365Other programs and costs 602,568 516,130

Total operating expenses 33,968,523 32,417,175Operating income 2,865,502 2,701,787Non-operating revenues (expenses)

Investment earnings 2,505,173 1,520,124Interest expense (164,679) (177,099)Loss on disposal of capital assets (6,567) (181)

Total non-operating revenues (expenses) 2,333,927 1,342,844Change in net assets 5,199,429 4,044,631Total net assets, beginning of year 31,112,407 27,067,776Total net assets, end of year $ 36,311,836 $ 31,112,407



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The Florida Bar and SubsidiariesConsolidated Statements of Cash Flows

Years ended June 30,Cash flows from operating activities:

Receipts from members, customers and other sourcesPayments to employees, suppliers and other vendors

Net cash provided by operating activitiesCash flows from non-capital and related financing activities:

Reduction of debtInterest paid

Net cash (used in) non-capital and related financing activitiesCash flows from capital and related financing activities:

Acquisition of capital assetsNet cash (used in) capital and related financing activities

Cash flows from investing activities:Net change in repurchase agreementRedemption of investmentsPurchase of investments, net of decrease in fair valueInvestment income

Net cash (used in) provided by investing activitiesIncrease in cash and cash equivalents:

Cash and cash equivalents, beginning of yearCash and cash equivalents , end of year

2006 2005

$ 39,683,779 $ 32,672,668(33,499,046) (31,972,454)6,184,733 700,214

(171,513) (159,252)(164,679) (177,099)(336,192) (336,351)

(357,823) (332,194)(357,823) (332,194)

(52,760) 936,65811,850,573 12,681,278(18,147,824) (14,408,587)2,505,173 1,520,124(3,844,838) 729,4731,645,880 761,142

12,271,874 11,510,732$ 13,917,754 $12,271,874



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The Florida Bar and SubsidiariesConsolidated Statements of Cash Flows (Continued)

Years ended June 30, 2006 2005Reconciliation of operating income to net cash provided byoperating activities:Operating income $ 2,865,502 $ 2,701,787Adjustments to reconcile operating income to net cash

provided by operating activities:Depreciation and amortization 667,743 766,365(Increase) decrease in:

Accounts receivable, net 267,081 (150,765)Prepaid expenses and other assets (360,384) 55,762Increase (decrease) in:Accounts payable 110,990 (30,914)Claims payable 339,666 (17,612)Accrued expensesSecurity deposits 83,3181,355 (41,424)2,177Deferred revenues 2,054,273 (2,741,184)

Net cash provided by operating activitiesCompensated absenses payable

$155,189

6,184,733 156,022$ 700,214Non-cash investing, capital, and financing acitivities

Change in the fair value of investments $ 310,344 $ 113,680Loss on disposal of assets

Supplemental informationCash paid for interest

$

$

6,567

164,679

$

$

181

177,099

See accompanying notes to the consolidated financial statements.- 11 -


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The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 1 - NATURE OF BUSINESSThe Florida Bar and Subsidiaries (The Florida Bar) is the statewide professional organization oflawyers. It serves as an advocate and intermediary for attorneys, the court and the public. TheFlorida Bar was established as a unified state bar by rule of the Supreme Court of Florida. TheFlorida Bar regulates lawyers in Florida, investigates the unauthorized practice of law, offerscontinuing legal education, publishes law journals and offers other member services.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESReporting EntityThe Florida Bar is a uni'fied state bar organized as an arm of the Supreme Court of the State ofFlorida. It is considered a governmental entity because it was established by, and has thepotential to be dissolved by, the Supreme Court of Florida. Therefore, The Florida Bar adopted theprovisions of Statement No. 34 ("Statement No. 34") of the Governmental Accounting StandardsBoard IIBasic Financial Statements - and Management's Discussion and Analysis - for State andLocal Governments," as amended by Statement No. 37.In evaluating The Florida Bar as a reporting entity, management has considered all potentialcomponent units for which The Florida Bar may be financially accountable and if found to befinancially accountable, be required to be included in The Florida Bar's financial statements. TheFlorida Bar is financially accountable if it appoints a voting majority of an organization's governingboard and (1) it is able to impose its will on an organization or (2) there is a potential for anorganization to provide specific financial benefit to or impose specific financial burden on TheFlorida Bar. Additionally, the primary government is required to. consider other organizations forwhich the nature and significance of their relationship with the primary government are such thatexclusion would cause the reporting entity's financial statements to be misleading or incomplete.Management's analysis has disclosed no component units that should be included in The FloridaBar's financial statements.Basis ofPresentationThe Florida Bar is accounted for as a proprietary type enterprise fund. Enterprise funds are usedto account for activities that are financed and operated in a manner similar to private businessenterprises: (1) where the costs of providing goods and services to the general public on acontinuing basis are to be financed through user charges; or (2) where the periodic determinationof net income is considered appropriate. Proprietary funds distinguish operating revenues andexpenses from non-operating items. Operating revenues and expenses generally result fromproviding goods and services in connection with a proprietary fund's ongoing operations.Operating expenses for The Florida Bar include the costs of personnel, contractual services,supplies, utilities, repairs and maintenance, and depreciation on capital assets. All revenues andexpenses not meeting this definition are reported as non-operating revenues and expenses.

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The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Basis ofAccountingBasis of accounting refers to when revenues and expenses are recognized in the accounts andreported in the financial statements. The financial statements are prepared on the accrual basis ofaccounting in accordance with accounting principles generally accepted in the United States ofAmerica. Under this method, revenues are recognized when they are earned and expenses arerecognized when they are incurred. The measurement focus of proprietary fund types is on a flowof economic resources method, which emphasizes the determination of net income, financialposition, and cash flow. All fund assets and liabilities, current and non-current, are accounted for inthe Consolidated Statements of Net Assets.Cash and Cash EquivalentsAll demand deposit accounts, daily repurchase agreements and short-term highly liquidinvestments with original maturities of three months or less are reported as cash equivalents.InvestmentsInvestments are reported at fair value, which are based on quoted market prices. Thedetermination of realized gains and losses is independent of the determination of the net change inthe fair value of investments. Realized gains and losses on investments held in a previous fiscalyear and sold in the current period were used to compute the change in fair value for the previousyear and the current year.Capital AssetsCapital assets are stated at cost less accumulated depreciation. The cost of capital assets isdepreciated over the estimated useful lives of the related assets, ranging from 5 to 40 years, usingthe straight-line method. When capital assets are retired or otherwise disposed of, the costs andrelated accumulated depreciation are removed from the accounts and any resulting gain or loss isreflected in the Consolidated Statements of Revenues, Expenses and Changes in Net Assets, inthe period of disposal.Claims PayableThe Florida Bar created the Clients' Security Fund (the Fund) to compensate people who havesuffered financial losses due to misappropriation of funds by errant Florida Bar members. TheFund is financed by $20 of each Florida Bar member's annual fees. Claims payable representamounts payable from the Fund.Deferred RevenuesDeferred revenues consist primarily of membership fees collected in advance, prepaid advertisingand prepaid legal education courses.

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The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Allocation ofExpensesThe costs of providing the various programs, services, and other activities have been summarizedon a functional basis in the Consolidated Statement of Revenues, Expenses and Changes in NetAssets. Accordingly, certain costs have been allocated among the programs and supportingservices benefited.Principles ofConsolidationThe accompanying consolidated financial statements include the accounts of The Florida Bar andits wholly-owned subsidiary, The Florida Bar Building Corporation, and its other controlled entities,Florida Lawyers Association for the Maintenance of Excellence, Inc., and The Florida AttorneysCharitable Trust. All significant intercompany transactions and accounts have been eliminated inconsolidation.Income TaxesThe Florida Bar is an administrative agency of the Supreme Court and is not subject to federal orstate income tax. The Florida Bar Building Corporation, Florida Lawyers Association for theMaintenance of Excellence, Inc., and The Florida Attorneys Charitable Trust have been grantedexemption from federal and state income taxes except on unrelated business income underSections 501 (c)(25), 501 (c)(6), and 501 (c)(3), respectively, of the Internal Revenue Code.Accordingly, no liability for income taxes is reflected in these financial statements.EstimatesThe preparation of financial statements in conformity with accounting principles generally acceptedin the United States of America requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from those estimates.ConcentrationThe Florida Bar receives the majority of its revenue from lawyers licensed to practice in the State ofFlorida.Net AssetsNet assets are categorized as invested in capital assets, restricted for scholarships, andundesignated. Invested in capital assets is intended to reflect the portion of net assets that areassociated with non-liquid, capital assets. Restricted for scholarships consists of monies restrictedfor the annual G. Kirk Haas fund scholarships. Undesignated assets consist of all other assets notincluded in the previous categories.

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The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)Derivative Financial InstrumentsThe Florida Bar follows the provisions of Governmental Accounting Standards Board (GASB)Technical Bulletin No. 2003-1, Disclosure Requirements for Derivatives Not Reported at Fair Valueon the Statement of Net Assets, an amendment to GASB Technical Bulletin 94-1. GASB TechnicalBulletin No. 2003-1 provides an updated definition of derivatives and requires certain disclosuresregarding the government's objective for entering into derivative transactions and the derivative'sterms, fair value, and risk exposures.RecentAccounting PronouncementsIn March 2003, the Governmental Accounting Standards Board issued Statement No. 40 (GASB40), Deposit and Investment Risk Disclosure, an amendment of Statement No.3. GASB 40addresses common deposit and investment risks related to credit risk, concentration of credit risk,interest rate risk, and foreign currency risk. GASB 40 requires certain disclosures of investmentsthat have fair values that are highly sensitive to changes in interest rates. Deposit and investmentpolicies related to the risks identified are also required to be disclosed. The provisions of GASB 40are effective for financial statements for perio'ds beginning after June 15, 2004. The Florida Barimplemented the provisions of GASB 40 during the year ended June 30, 2005.ReclassificationsCertain immaterial 2005 amounts have been reclassified to conform to the 2006 presentation.

NOTE 3 - CASH AND CASH EQUIVALENTSCash and cash equivalents are subject to custodial risk. Custodial risk is the risk that in the eventof a bank or other counterparty failure, The Florida Bar's cash and cash equivalents may not bereturned. The Florida Bar's policy with respect to custodial risk is that The Florida Bar will onlymaintain demand deposit accounts with financial institutions in which management believes thatthe risk is limited because the financial institutions are large with strong financial positions.Cash and cash equivalents are held at two financial institutions. Operating cash is held at afinancial institution insured by the Federal Deposit Insurance Corporation up to $100,000 each forthe parent and subsidiary accounts. Operating cash balances were $2,021,114 and $1,176,200 atJune 30, 2006 and 2005, respectively. Additional cash and money market funds are held at afinancial institution insured by the Securities Investor Protection Corporation up to $100,000.Additional cash and money market funds were $11,896,640 and $11,095,674 at June 30,2006and 2005, respectively.

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The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 4 - INVESTMENTSInvestment Objectives and PoliciesInvestments will be made for the sole interest and exclusive purpose of providing investmentreturns for The Florida Bar. The Florida Bar's investment objectives and policies are achievedthrough a short-term account portfolio and a long-term account portfolio. The ultimateresponsibility for the proper supervision of The Florida Bar's investment portfolio rests with theBoard of Directors and the Investment Committee.The purpose of the short-term portfolio is to provide for The Florida Bar's short-term working capitalneeds. The short-term portfolio possesses a short-term time horizon (one to three years) andwithin this horizon, the primary objectives of the short-term portfolio are to preserve capital forshort-term cash flow needs, to provide liquidity, and to achieve attractive short-term yieldsconsistent with the preservation of capital.The purpose of the long-term investment portfolio is to provide for The Florida Bar's operatingneeds and to fund The Florida Bar's programs both today and into the future. The long-termportfolio possesses an intermediate to long-term horizon (five to seven years) and within thishorizon, the primary objectives of the long-term portfolio are to provide long-term growth ofcapital and income.The asset allocation guidelines with regard to acceptable asset classes, the overall target assetmix, and the representative indices of each asset class are as follows:Short-Term

Asset ClassesShort-Term Fixed IncomeCash and EquivalentsLong-Term

Asset ClassesLarge Cap EquityMid Cap EquitySmall Cap EqUityIntemational and Emerging

Market EquityFixed Income Mutual FundsCash and Equivalents

TargetMinimum Mix Maximum

35.0% 50.0% 65.00/035.00/0 50.0% 65.00/0

TargetMinimum Mix Maximum13.3% 19.0% 24.7%6.3% 9.0J'o 11.7%6.3J'o 9.0J'o 11.7%12.6% 18.0% 23.40/028.00/0 40.00/0 52.0%3.5% 5.00/0 6.5%

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RepresentativeIndex

Lehman Brothers 1-3 year Govt Bond IndexCitigroup U.S. gO-Day Treasury Bills

RepresentativeIndexStandard & Poor's 500 IndexRussell Mid Cap IndexRussell 2000 Index

MSCI EAFE Index & MSCI Emerging Markets Free IndexLehman Brothers Intermediate Govt I Corp Bond IndexCitigroup U.S. 90-Day Treasury Bills


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The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 4 - INVESTMENTS (CONTINUED)InvestmentsAt June 30, The Florida Bar's investment balances were as follows:

2006 2005June 30, Fair Value Maturity Rating Fair ValueRepurchase agreement $ 674,488 Daily N/A $ 621,728Mutual funds - debt securities (5T) * 9,548,510 2 year average ** B to Aaa 9,253,730Mutual funds - debt securities (LT) * 7,429,690 3 year average ** B to Aaa 5,288,041Mutual funds - equity securities 1,701,705 N/A N/A 1,261,058Stocks 12,762,318 N/A N/A 9,342,143Total investments $ 32,116,711 $ 25,766,700* The Florida Bar invests in mutual funds, which consist of debt securities (Le. fixed income securities). The FloridaBar-does not invest directly in fixed income debt securities. The Florida Bar is able to sell their interest in thesemutual funds at will (SUbject to potential redemption fees).** Represents the average maturity of debt securities held by mutual funds invested in by The Florida Bar.Credit RiskInvestments in fixed income debt securities through mutual funds must adhere to the policy ofmeeting an average quality rating of A or higher for the long-term portfolio and AA or higher forthe short-term portfolio by either Standards & Poor's, Moody's or Fitch Investors Service at thetime of purchase. Investments in corporate holdings must be rated investment grade or betterConcentration of Credit RiskInvestments in equity securities are subject to a maximum 5% commitment at cost and 10%weighting at market of the account's total market value for any individual security or singleissuer. Investment in fixed income securities are subject to no more than 5% of the account'smarket value invested in a single issue or 100k with a single issuer with the exception of theU.S. Government and its agencies so long as any such government or agency issue shall bebacked with the full faith and credit of the U.S. Government.Interest Rate RiskInterest rate risk arises from investments in debt instruments and is defined as the risk thatchanges in interest rates will adversely affect the fair value of an investment. The Florida Bar isnot directly subject to the interest rate risk of debt instruments as investments in debt securitiesare entered into through mutual funds and The Florida Bar is able to sell their interest in thesemutual funds at will (subject to potential redemption fees). Additionally, The Florida Bar haselected to participate in mutual funds with target durations of one to five years (low andmoderated funds). However, investments in mutual funds are with the understanding that theinvestment policies stated in the mutual fund's prospectus supersedes the guidelinesestablished by The Florida Bar.

- 17-


22/51

The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 4 - INVESTMENTS (CONTINUED)Custodial Credit RiskCustodial risk is the risk that in the event of bankruptcy of the custodial entity, The Florida Bar'sdeposits may not be returned to it. The Florida Bar's policy regarding custodial risk is thatdeposits subject to overnight repurchase agreements shall only be invested in securities backedby the United States government. Additionally, The Florida Bar will only hold investmentsecurities that are insured or registered and held by The Florida Bar, or its designated agent, inthe name of The Florida Bar. The repurchase agreement is exposed to uninsured anduncollateralized custodial credit risk with Bank of America. Investments held through MorganStanley have Securities Investor Protection Corporation coverage up to $500,000 per customerfor cash and securities and excess protection provided by the Customer Asset ProtectionCompany for up to the net equity value of cash and securities in Morgan Stanley's account.Investments held through PIMCO are held by a third party trust company.Foreign Currency RiskInvestments in international securities are limited to SEC-Registered, U.S. exchange listed, U.S.dollar-denominated securities of foreign domiciled issuers. Securities of foreign companiestraded on foreign stock exchanges may be purchased only with the written permission of theInvestment Committee. Additionally, the investment policy approves the use of mutual funds,which may include foreign securities, with the understanding that the investment policies statedin the mutual fund's prospectus supersede the guidelines set forth in The Florida Bar'sinvestment policy.Derivative InstrumentsThe Florida Bar's investment policy states that investments in options, derivatives and financialfutures are prohibited in separately managed accounts. Additionally, the investment policyapproves the use of mutual funds, which may include derivative instruments, with theunderstanding that the investment policies stated in the mutual fund's prospectus supersede theguidelines set forth in "The Florida Bar's investment policy.

NOTE 5 - ACCOUNTS RECEIVABLE, NETThe following is a summary of accounts receivable, net:June 3D, 2006 2005Accounts receivable $ 430,224 $ 697,305Allowance for doubtful accounts (24,900) (24,900)

Accounts receivable, net $ 405,324 $ 672,405

-1 8 -


23/51

The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 6 - CAPITAL ASSETS, NET

July 1,2005 Additions Deletions June 30, 2006Capital assets not being depreciated:

Land $ 1,103,060 $ - $ - $ 1,103,060Total capital assets not depreciated $ 1,103,060 $ - $ - $ 1,103,060Capital assets being depreciated:

Buildings and improvements $ 7,877,915 $ 25,057 $ - $ 7,902,972Landscaping and parking 120,318 120,318Equipment and furnishings 4,651,072 332,766 (527,319) 4,456,519

Total capital assets being depreciated 12,649,305 357,823 (527,319) 12,479,809Less accumulated depreciation for:

Buildings and improvements (3,973,957) (295,993) (4,269,950)Landscaping and parking (120,318) (120,318)Equipment and furnishings (3,437,374) (371,750) 520,752 (3,288,372)

Total accumulated depreciation (7,531,649) (667,743) 520,752 (7,678,640)Total capital assets being depreciated, net $ 5,117,656 $ (309,920) $ (6,567) $ 4,801,169Total capital assets, net $ 6,220,716 $ (309,920) $ (6,567) $ 5,904,229Depreciation expense for the year ended June 30, 2006 and 2005 was $667,743 and $766,365,respectively.NOTE 7 - LONG-TERM LIABILITIESLong-Term DebtThe following is a summary of long-term debt:June 30, 2006 2005Renewal mortgage note payable to Bank of America in the amountof $2,986,384 due on October 15, 2009. Monthly payments ofprincipal began on November 15, 1999 at $9,383 with annualincreases of $723 per month each November 15th based on a 15year amortization with a balloon payment of $1,396,760 at maturity.Interest is payable monthly based on a contract rate equal to theLondon Interbank Offering Rate (LIBOR) (6.7k at June 30, 2006)plus 47 basis points. However, the interest rate was swapped in ahedge transaction. See Note 8 below. The mortgage iscollateralized by real estate owned by The Florida Bar BuildingCorporation and guaranteed by The Florida Bar.

Current portion$ 2,049,543 $ 2,221,056

(184,718) (161,760)Long-term debt, less current portion $ 1,864,825 $ 2,059,296

- 19


24/51

The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 7 - LONG-TERM LIABILITIES (CONTINUED)Long-Term Debt (Continued)The following are maturities ,of long-term debt:Years ended June 30,

Total

2007200820092010

Amount$ 184,718198,939214,2551,451,631$ 2,049,543

Compensated Absences Payable

Total compensated absencesAccrued vacationAccrued sick leave

Compensated absences payable consisted of the following:June 30, 2006

$1,289,710883,444

$ 2,173,154

2005$ 1,203,980

813,985$ 2,017,965

Changes in Long-Term LiabilitiesChanges in long-term liabilities are summarized as follows:

Balance BalanceLong-term debtCompensated absences

July 1,2005$ 2,221,056

2,017,965Additions

$ -.1,628,896

Reductions$ (171,513)

(1,473,707)June 30,2006$ 2,049,543

2,173,154Total long-term liabilities $ 4,239,021 $ 1,628,896 $ (1 ,645,220) $ 4,222,697

NOTE 8 - DERIVATIVE DISCLOSURE -INTEREST RATE SWAPObjective of the interest rate swap. In October 1999, The Florida Bar refinanced an 81/2%fixed rate mortgage to a variable rate mortgage based on the LIBOR rate plus .47%. Tomanage its interest rate exposure under the variable rate renewal mortgage note payable toBank of America, The Florida Bar entered into a hedge transaction on October 13, 1999 to swapits floating rate for a fixed rate through a 120 month interest rate swap provided by Bank ofAmerica.

- 20


25/51

The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 8 - DERIVATIVE DISCLOSURE -INTEREST RATE SWAP (CONTINUED)Terms. The swap was for the notional amount of $2,986,384 which was equal to the principalamount of the underlying variable rate debt. The notional amount declines each year as theprincipal amount of the associated debt declines. At June 30, 2006 and 2005, the notionalamount was $2,049,543 and $2,221,056, respectively. The swap was entered into at the sametime that the debt was refinanced (October 1999). Under the swap, The Florida Bar pays theBank of America a contracted interest rate of LIBOR plus .47A, and receives a payment fromBank of America based on the coupon rate of the swap which is 6.97A,. The net effect of thetwo contractual rates is an effective fixed rate of 7.44A,. The swap matures on October 15,2009.Fair value. Due to the difference between the two rates, the swap had a negative fair value of$80,999 and $233,202 as of June 30, 2006 and 2005, respectively. The fair value wasestimated by the Bank of America as identified in the Schedule to the International SwapDealers Association Master Agreement (ISDA) using the mid-market level method. This methodis in accordance with market conventions, which take into consideration estimates aboutrelevant present and future market conditions, as well as size and liquidity of the position andrelated actual or potential hedging transactions.Basis risk. The swap exposes The Florida Bar to basis risk should the LIBOR rates decreasesignificantly. If a change occurs that results in a significant decrease in LIBOR rates, theexpected cost savings may not be realized.Termination risk. The Florida Bar or the Bank of America may terminate the swap if the otherparty fails to perform under terms of the agreement. If at the time of termination the swap has anegative fair value, The Florida Bar would be liable to the Bank of America fo r a payment equalto the swap's fair value.Swap payments and associated debt. Using rates as of June 30, 2006, debt servicerequirements of the renewal mortgage note payable and the swap payments, assuming currentinterest rates remain the same for thei r term, were as follows. As rates vary, the variable-rateinterest payments and swap payments will vary.

Year endingJune 30 Principal

2007 $ 184,718 $2008 198,9392009 214,2552010 1,451,631

Total $ 2,049,543 $

Interest rate Net debtInterest Total140,990127,286112,52825,693

$ 325,708326,225326,7831,477,324

$

406,497 $ 2,456,040 $

- 21

swap, net service(3,933)(3,551)(3,139)

(717)(11,340)

$

$

321,775322,674323,644

1,476,6072,444,700


26/51

The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 9 - REVENUE AND EXPENSE CLASSIFICATIONThe significant revenue and expense accounts presented in the consolidated financialstatements are described as follows:Other Fees from MembersIncludes revenues from members other than annual dues such as advertising approval fees,certification fees and section dues.Sales ofProducts and ServicesIncludes revenues from sources such as Continuing Legal Education (CLE) registrations, salesof publications and meeting revenues.Grants and OtherIncludes grants received from The Florida Bar Foundation, cost recoveries from disciplinecases, rents received in The Bar Center Building Fund and other sources of revenue.Regulation of the Practice of LawIncludes expenses incurred for Lawyer Regulation, Lawyer Advertising, Ethics, Continuing LegalEducation Rules (CLER), Membership Records and Certification.Cost ofProducts and Services Provided to MembersIncludes expenses such as the cost of CLE courses and publications, Legal Office ManagementAdvisory Services (LOMAS), voluntary member assistance programs, meetings, committeeactivity and section activity.Communication with Members and the PublicIncludes the expenses of the Public Information Department and The Florida Bar Journal andNews.AdministrationIncludes board and officer expenses, the cost of the Executive Director's office, GeneralCounsel, Research, Planning and Evaluation, and liability and property insurance.

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27/51

The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 10 - RETIREMENT PLANSThe Florida Bar sponsors a defined contribution pension plan, The Florida Bar Employees'Pension Plan (the Plan), which is available to all salaried personnel having completed sixmonths of service. The Plan is administered by The Florida Bar Retirement Committee. ThePlan may be amended at any time by The Florida Bar. Employer contributions are discretionaryand are currently made for all eligible employees based on a formula which was 11 0A of coveredcompensation and 4.3% on covered compensation exceeding 80% of the Social Security wagebase for the years ended June 30, 2006 and 2005. The employer contributions are allocated toseparate participant accounts and invested by the Trustee in the funds selected by theemployee from those offered by the Plan Administrator. Participant accounts vest based on thefollowing schedule:

< 3 years 0%3 - 4 years 40%4 - 5 years 600k5 - 6 years 800k> 6 years 100%

Forfeited contributions are held in a separate account and can be used to reduce futureemployer contributions. The plan has been amended to comply with all applicable Federal taxlaws. The pension contribution made equaled the contribution required during the years endedJune 30, 2006 and 2005 for the Plan years ended December 31, 2005 and 2004 and was$1,275,351 and $1,314,625, respectively.The Florida Bar also has a deferred com.pensation plan. The plan is for the benefit of all eligibleemployees who elect to participate.

NOTE 11 - LEASESThe Florida Bar is the lessee of office space under operating leases expiring in various yearsthrough the year 2010, with escalation clauses.The Florida Bar leases office space from its wholly-owned subsidiary, The Florida Bar BuildingCorporation. The intercompany rental income and rental expense have been eliminated inconsolidation.Future minimum rental payments are as follows:Years ending June 30, Amount2007 $ 682,9152008 488,8202009 442,6312010 327,082

Total rental expense for the fiscal year ended June 30, 2006 and 2005 was$732,146, respectively.

Total minimum future rental payments$757,530 and$ 1,941,448

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The Florida Bar and SubsidiariesNotes to Consolidated Financial StatementsNOTE 11 - LEASES (CONTINUED)The Florida Bar is also the lessor of certain office space in a building owned by The Florida Bar.The space is rented to unrelated entities under operating leases expiring in various yearsthrough the year 2009. Rental income for the fiscal years ended June 30, 2006 and 2005 were$499,561 and $485,011, respectively.Future minimum rental receipts are as follows:Years ending June 30, Amount2007 $ 258,2442008 265,9912009 66,986Total minimum future rental payments $ 591,221

NOTE 12 - CONTINGENCIESThe Florida Bar is involved in several actions as defendant and/or co-defendant. The majorityof the actions are expected to be settled with little or no financial impact to The Florida Bar. Anaccurate assessment of any sig,ni'ficant liabili ty is not determinable although management of TheFlorida Bar believes that the possibility of any significant liability arising from current litigation isextremely remote.

NOTE 13 - DESIGNATED FUND BALANCESThe Florida Bar has designated certain net assets to be used for specific program purposes. Asof June 30, 2006 and 2005, the designated net assets were $12,073,656 and $9,455,921,respectively.

NOTE 14 - RISK MANAGEMENT PROGRAMSThe Florida Bar is exposed to various risks of loss related to torts; theft of, damage to, anddestruction of assets; errors and omissions; injuries to employees; and natural disasters.Workers' compensation, property, and general liability coverage are provided throughcommercial insurance carriers. Management continuously reviews the limits of coverage andbelieves that current coverage is adequate. There were no significant reductions in insurancecoverage from the previous year.

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29/51

Supplementary Information


30/51

he Florida Bar and SubsidiariesConsolidating Schedule of Statement of Net Assets

June 30, 2006GeneralFund Bar CenterFund

Clients'SecurityFund CertificationFund SectionsFund EliminatingEntries TotalAll Funds

AssetsCurrent assets

Cash and cash equivalentsShort-term investmentsAccounts receivable. netDue from other fundsPrepaid expenses and other assets

Total current assets

$ 13,098,37532,116,711

373,012-587.449

46,175,547

$ 819,379--5.360,424-6,179,803

$ ---4,195,220-4,195,220

$- ---597.479-597,479

$ ---2,973,995-2,973,995

$ --32,312(13,127,118)

(25.117)(13,119,923)

$ 13,917,75432,116.711

405,324562,332

47,002,121Restricted assets

Investment in The Florida BarBuilding Corporation

Total restricted assets1,611,6471,611,647 -- -- -- -- (1,611,647)(1.611,647)

Capital assets, netLandBuildings and improvementsLandscaping and parkingEquipment and furnishingsAccumulated depreciation

Total capital assets, net

------

1.103.0607.902.972

120.3184.456.519

(7,678,640)5.904,229

------

------

------

------

1,103,0607,902,972

120,3184,456,519

(7.678,640)5,904,229

Total assets $ 47,787,194 12.084,032 $ 4,195,220 $ 597,479 $ 2,973.995 $ (14,731,570) $ 52,906,350

See Independent Auditors' Report.- 25-


31/51

- - - - - - - - - - - - - - - - -he Florida Bar and SubsidiariesConsolidating Schedule of Statement of Net Assets(Continued)June 30, 2006

GeneralFund Bar CenterFundClients'SecurityFund CertificationFund SectionsFund EliminatingEntries TotalAll Funds

Liabilities and Net AssetsCurrent liabilities

Current portion of long-term debtAccounts payableClaims payableAccrued expensesDue to other fundsDeferred revenuesSecurity deposits

Total current liabilities

$ -2,626,560-773,537

11,843,0099,659,687-

24,902,793

$ 184,71839,186----70,903

294,807

$ --478,858----478,858

$ --------

$ --------

$ -(1,251,797)--(11,843,009)-(25,117)

(13,119,923)

$ 184,7181,413,949

478,858773,537

9,659,68745,786

12,556,535Non-current liabilities

Long-term debt, less current portionCompensated absences payable

Total non-current liablities-2,173,154

2,173,1541,864,825-1,864,825

------

------

1,864,8252,173,1544,037,979

Total liabilities 27,075,947 2,159,632 478,858 - - (13,119,923) 16,594,514Net assets

Invested in capital assets, net of related debtRestricted for scholarshipsUnrestricted

DesignatedUndesignated

Contributed capitalTotal net assets

-25,248

512,06420,173,935-20,711,247

3,854,686-4,458,067-1,611,6479,924,400

--3,716,362--3,716,362

--597,479--597,479

--2,973,995--2,973,995

----(1,611,647)

(1,611,647)

3,854,68625,248

12,257,96720,173,93536,311,836

Total liabilities and net assets $ 47,787,194 $ 12,084,032 $ 4,195,220 $ 597,479 $ 2,973,995 $ (14,731 ,570) $ 52,906,350

See Independent Auditors' Report.- 26 -


32/51

- - - - - - - - - - - - - - - - -he Florida Bar and SubsidiariesConsolidating Schedule of Statement of Revenues, Expenses and Changes in Net AssetsClients'General Bar Center Security Certification Sections Eliminating Total

Year ended June 30, 2006 Fund Fund Fund Fund Fund Entries All FundsOperating revenues

Annual fees $ 20,284,163 $ - $ - $ - $ - $ - $ 20,284,163Other fees from members 3,228,745 - - 943,597 1,183,661 - 5,356,003Sales of products and services 5,817,128 - - 6,784 1,736,191 - 7,560,103Advertising 2.223,308 - - - - - 2,223,308Young lawyers 532,811 - - - - - 532,811Grants and other 429,885 957,813 18,339 - - (528,400) 877.637Total operating revenues 32,516,040 957,813 18,339 950,381 2,919,852 (528,400) 36,834,025

Operating expensesRegulation of the practice of law 12,645,082 - - 872,694 - (199,633) 13,318,143Cost of products and services provided to member s 6,934,437 - - - 2,512,596 (108,992) 9,338,041Unauthorized practice of law 1,268,066 - - - - (19,905) 1,248,161Public service programs 911,883 - 1,101,860 - - (14,290) 1,999,453Communication with members and the public 3,607,261 - - - - (56,556) 3,550.705Administration 2,438,273 - - - - (38,302) 2,399,971Legislation 424,111 - - - - (6,638) 417,473Young lawyers 433,043 - - - - (6,778) 426,265Depreciation and amortization - 667,743 - - - - 667,743Other programs and costs 212,561 467,313 - - - (77,306) 602,568Total operating expenses 28,874,717 1,135,056 1,101,860 872,694 2,512,596 (528.400) 33,968.523

Operating income (loss) _ ~ 6 4 1 , 3 2 ~ ( 1 7 7 ! 2 4 ~ ) (1,083,-521) 77,687 407,256 - 2,865,502Non-operating revenues (expenses)Investment earnings 1,779,324 294,170 221,768 22,653 187,258 - 2,505,173Interest expense - (164,679) - - - - (164.679)Loss on disposal of capital assets - (6,567) - - - - (6,567)Total non-operating revenues (expenses) 1,779,324 122,924 221,768 22,653 187,258 - 2,333,927Change in net assets 5,420,647 (54,319) (861,753) 100,340 594,514 - 5,199,429Net assets, beginning of year 18,211,352 8,556,587 3,079,495 497,139 2,379,481 (1,611,647) 31.112.407Transfers (to) from other funds (2,920,752) 1,422,132 1,498,620Net assets, end of year $ 20,711,247 $ 9,924,400 $ 3,716,362 $ 597,479 $ 2,973,995 $ (1,611,647) $ 36,311,836



33/51

- - - - - - - - - - -- - - - - _ The Florida Bar and SubsidiariesConsolidating Schedule of Statement of Cash FlowsClients'General Bar Center Security Certification Sections Eliminating Total

Year ended June 30,2006 Fund Fund Fund Fund Fund Entries All FundsCash flows from operating activities:Receipts from members, customers and other sources $ 34,826,387 $ 957,813 $ 18,339 $ 950,381 $ 2,919,852 $ 11,007 $ 39,683,779Payments to e l ! 1 p l o ~ , suppliers and other vendors (28,901,727) (266,061) (240,107) (973,034) (3,107,110) (11,007) (33,499,046)Net cash provided by (used in) operating activities _ 5,924,660 691,752 (221,768) (22,653) (187,258) 6,184,733Cash flows from non-capital and related financing activities:

Reduction of debt (171,513) (171,513)Interest paid (164,679) (164,679}Net cash (used in) non-capital and related financing

activities (336,192) {336,192)Cash flows from capital and related financing activities:

Acquisition of capital assets - (357,823) - - - - (357,823)Net cash (used in) capital and related financing activities - (357,823) - - - - (357,823)Cash flows from Investing activities:

Net change in repurchase agreement (52,760) (52,760)Redemption of investments 11,850,573 11,850,573Purchase of investments, net of change in fair value (18,147,824) (18,147,824)Investment income 1,779,324 294,170 221,768 22,653 187,258 2,505,173

Net cash provided by investing activities (4,570,687) 294,170 221,768 22,653 187,258 (3,844,838)Increase (decrease) In cash and cash equivalents 1,353,973 291,907 1,645,880Cash and cash equivalents, beginning of year 11,744,402 527,472 12,271,874Cash and cash equivalents, end of year $ 13,098,375 $ 819,379 $ - $ - $ - $ $13,917,754



34/51

- - - - - - - - - - - - - - - - -he Florida Bar and SubsidiariesConsolidating Schedule of Statement of Cash Flows(Continued)Clients'General Bar Center Security Certification Sections Eliminating Total

Year ended June 30, 2006 Fund Fund Fund Fund Fund Entries All FundsReconciliation of operating Income to net cash providedby (used In) operating activities:Operating income (loss) $ 3,641,323 $ (177,243) $ (1,083,521) $ 77,687 $ 407,256 $ - $ 2,865,502Adjustments to reconcile operating income (loss) to

net cash provided by (used in) operating activitiesDepreciation and amortization - 667,743 - - - - 667,743Transfers (to) from other funds (2,920,752) 1,422,132 1,498,620(Increase) decrease in:

Accounts receivable, net 256,074 - - - - 11,007 267,081Due from other funds - (1,255,119) (976,533) (100,340) (594,514) 2,926,506Prepaid expense and other assets (360,384) - - - - - (360,384)Increase (decrease) in:Accounts payable 149,609 32,884 - - - (71,503) 110,990Claims payable - - 339,666 - - - 339,666Accrued expenses 238,507 - - - - - 238,507Security deposits - 1,355 - - - - 1,355Due to other funds 2,866,010 - - - - (2,866,010)Deferred revenues 2,054,273 - - - - - 2,054,273Net cash provided by (used in) operating activities $ 5,924,660 $ 691,752 $ (221,768) $ (22,653) $ (187,258) $ - $ 6,184,733

Non-cash Investing, capital and financing activities:Change in the fair value of investments $ 310,344 $ $ $ $ $ $ 310,344Loss on disposal of assets $ - $ $ $ $ $ $

Supplemental Information:Cash paid for interest $ $ 164,679 $ $ $ $ $ 164,679



35/51

The Florida Bar and SubsidiariesGeneral Fund Schedule of Budgeted and Actual Revenues and ExpensesVarianceFavorable

Year ended June 30, 2006 Actual Budgeted (Unfavorable)Revenues - budgetary basis

Annual fees $ 20,284,163 $InvestmentsAuthorized house counsel 1,763,633256,902Lawyer regulation 704,410Professional enhancement programUnlicensed practice of law 78,4464,951EthicsLawyer advertisingProfessionalism 321,67678,018Multijurisdictional practice 156,250Meetings and conventionsAddressing services 506,408226,437Continuing legal education program 3,386,947Continuing legal education ruleCourse approval center 514,96580,874Public service programsForeign legal consultantsLaw office management advisory services

746,7424,140

147,271Member benefits programLegal publicationsSection administration592,378946,243599,036

Young lawyers divisionCommitttee expensesPublic information

532,8113,185

70,480JournalNewsDirectory

446,6801,549,133

227,495Research, planning and evaluationBuilding and grounds 34645,941Other revenue (6,411)G. Kirk Haas Fund (restricted revenue)

Total revenues - bUdgetary basis4,456

34,274,006


20,007,328 $ 276,835550,000 1,213,633188,150 68,752539,550 164,860

88,500 (10,054)6,045 (1,094)

50 (50)255,220 66,456

61,352 16,666250,000 (93,750)450,964 55,444200,000 26,437

3,442,040 (55,093)394,132 120,833

90,117 (9,243)986,850 (240,108)

13,075 (8,935)188,995 (41,724)586,211 6,167

1,094,400 (148,157)780,400 (181,364)571,302 (38,491)

7,562 (4,377)107,289 (36,809)409,910 36,770

1,222,854 326,279247,755 (20,260)

34647,250 (1,309)10,000 (16,411)

4,45632,797,301 1,476,705


36/51

The Florida Bar and SubsidiariesGeneral Fund Schedule of Budgeted and Actual Revenues and Expenses

(Continued)VarianceFavorable

Year ended June 30, 2006 Actual Budgeted (Unfavorable)Expenses - budgetary basisGeneral administrationStaff and office expense 556,361 745,398 189,037

Travel 60,821 56,452 (4,369)Internal service and administration 6,768 4,409 (2,359)Member service project 15,000 15,000Other operating expenses 6,804 16,656 9,852Total general administration 630,754 837,915 207,161Board and officerStaff and office expense 267,827 308,817 40,990

Travel 30,501 23,421 (7,080)Internal service and administration 22,111 9,231 (12,880)Other operating expenses 383,792 380,523 (3,269)Total board and officer 704,231 721,992 17,761

LegislationStaff and office expense 124,521 117,914 (6,607)Contract services 249,060 308,500 59,440Travel 4,908 4,611 (297)Internal service and administration 42,906 47,620 4,714Other operating expenses 2,716 8,881 6,165Total legislation 424,111 487,526 63,415

Authorized house counselStaff and office expense 9,011 9,878 867Internal service and administration 41,861 33,981 (7,880)Other operating expenses 1,255 620 (635)Total authorized house counsel 52,127 44,479 (7,648)

General counselStaff and office expense 169,573 188,106 18,533Contract services 715,183 160,515 (554,668)Travel 3,306 4,099 793Internal service and administration 33,086 14,736 (18,350)Other operating expenses 849 1,527 678Total general counsel 921 ,997 368,983 (553,014)

Division director - legalStaff and office expense (23,365) (29,259) (5,894)Travel 14,910 20,888 5,978Internal service and administrat ion 8,460 8,324 (136)Other operating expenses 47 47Total division director - legal 5 (5)

See Independent Auditors' Report.- 31


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Year ended June 30, 2006 Actual Budgeted (U nfavorable)Expenses - budgetary basisLawyer regulation

Staff and office expense 8,209,587 8,558,047 348,460Travel 113,794 144,145 30,351Internal service and administration 1,143,989 1,264,997 121,008Other operating expenses 353,395 361,718 8,323

Total lawyer regulation 9,820,765 10,328,907 508,142Professional enhancement program

Staff and office expense 25,849 47,291 21,442Travel 4,278 12,000 7,722Internal service and administration 2,517 6,279 3,762Other operating expenses 1,754 5,458 3,704

Total professional enhancement program 34,398 71,028 36,630Division director - ethics, UPL and professionalism

Staff and office expense (8,364) (5,495) 2,869Travel 8,368 5,470 (2,898)Internal service and administration 25 25

Total division director - ethics, UPL and professionalismUnlicensed practice of law

4 (4)

Staff and office expenseTravelInternal service and administration

1,105,33533,99792,363

1,159,59539,579

158,09254,2605,582

65,729Other operating expenses 39,998 53,788 13,790Total unlicensed practice of law 1,271,693 1,411,054 139,361

Lawyer assistance program/substance abuseStaff and office expense 8,529 3,100 (5,429)Internal service and administration 30,128 35,317 5,189Other operating expenses 375,000 375,000

Total lawyer assistance program/substance abuse 413,657 413,417 (240)Advertising task force

Staff and office expense 23,659Travel 202Internal service and administration 1,950Other operating expenses 661

21,957

2,102544

(1,702)(202)(117)

Total advertising task force 26,472 24,603 (1,869)


152


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Year ended June 30, 2006 Actual Budgeted (Unfavorable)Expenses - budgetary basisEthicsStaff and office expense 549,466 573,830 24,364Travel 4,289 3,673 (616)Internal service and administration 44,265 54,745 10,480Other operating expenses 5,005 6,095 1,090

Total ethics 603,025 638,343 35,318Lawyer advertising

Staff and office expense 528,991 500,608 (28,383)Travel 4,619 7,459 2,840Internal service and administration 44,655 48,291 3,636Other operating expenses 10,568 8,399 (2,169)

Total lawyer advertising 588,833 564,757 (24,076)Ethics/advertising staff pool

Staff and office expense (27,588) (31,691) (4,103)Travel 27,580 31,691 4,111

Total ethics/advertsising pool (8) 8Professionalism

Staff and office expense 382,818 415,185 32,367Contract services 3,600 3,670 70Travel 18,956 18,731 (225)Internal service and administration 46,860 54,920 8,060Other operating expenses 67,510 71,476 3,966

Total professionalism 519,744 563,982 44,238Multijurisdictional practice

Staff and office expense 9,854 23,520 13,666Internal service and administration 37,467 2,277 (35,190)Other operating expenses 1 855 854

Total multijurisdictional practice 47,322 26,652 (20,670)Shipping and receiving

Staff and office expense 134,016 184,795 50,779Internal service and administration 1,596 (1,596)Other operating expenses 46 34 (12)Less cost distribution (135,658) (184,829) (49.171)Total shipping and receiving

Building and groundsStaff and office expense 1,128,686 1,137,650 8,964Travel 2,710 2,400 (310)Internal service and administration 838 449 (389)Other operating expenses 1 2 1Less cost distribution (1 ,086,293) (1 ,093,251) (6,958)Total building and grounds 45,942 47,250 1,308



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Year ended June 30, 2006 Actual Budgeted (Unfavorable)Expenses - budgetary basisMeetings and conventionsStaff and office expense 330,062 305,847 (24,215)

Contract services 600 600Travel 19,050 24.402 5,352Internal service and administration 115,992 127,479 11,487Other operating expenses 325,541 349,637 24,096Less cost distribution (20,453) (25,045) (4,592)

Total meetings and conventions 770,192 782,920 12,728Information systems

Staff and office expense 2,787,370 2,908,694 121,324Contract services 224,811 194,000 (30,811)Travel 9,057 18.970 9,913Internal service and administration 254,076 273,022 18,946Other operating expenses 1,240 5,817 4,577Less cost distribution (3.276,556) (3,400,503) (123,947)

Total information systems (2) 2Human resource management

Staff and office expense 185,845 184.214 (1,631 )Contract services 23,291 23,291Travel 35 719 684Internal service and administration 34,116 38,211 4,095Other operating expenses 26,204 17,427 (8,777)Less cost distribution (269.491) (263,862) 5,629

Total human resource managementDivision director - programs

Staff and office expense (4,646) (7,767) (3,121)Travel 2,945 6.070 3,125Internal service and administration 1,671 1,456 (215)Other operating expenses 30 241 211

Total division director - programsContinuing legal education programs

Staff and office expense 836,445 759,788 (76,657)Travel 49,789 49.138 (651)Internal service and administration 893,030 812,763 (80,267)Other operating expenses 1,312,296 1.133,413 (178,883)

Total continuing legal education programs 3,091,560 2,755,102 (336,458)Continuing legal education rule

Staff and office expense 201,452 268,072 66,620Travel 443 1.678 1,235Internal service and administration 23,100 35,827 12,727Other operating expenses 35,153 48,057 12,904Total continuing legal education rule 260,148 353,634 93,486



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Year ended June 30, 2006 Actual Budgeted (Unfavorable)Expenses - budgetary basisCourse approval centerStaff and office expense 71,766 71,433 (333)Internal service and administration 5,919 7,467 1,548Other operating expenses 3,189 14,060 10,871Total course approval center 80,874 92,960 12,086Legal education and specialization poolStaff and office expense (62,949) (142,947) (79,998)Internal service and administration 62,716 64,840 2,124Other operating expenses 238 5 (233)Total legal education and specialization pool 5 (78,102) (78,107)Professional development poolStaff and office expense (42,076) (32,289) 9,787Internal service and administration 41,368 31,205 (10,163)Other operating expenses 708 1,084 376Total professional development poolPublic service programsStaff and office expense 440,798 468,577 27,779Contract services 175 2,840 2,665Travel 4,647 4,375 (272)Internal service and administration 180,961 244,782 63,821Other operating expenses 286,383 319,338 32,955Total public service programs 912,964 1,039,912 126,948Foreign legal consultantsStaff and office expense 3,354 461 (2,893)Internal service and administration 302 78 (224)Other operating expenses 6 374 368Total foreign legal consultants 3,662 913 (2,749)Print shopStaff and office expense 403,031 428,088 25,057Travel 1 (1 )Internal service and administration 25 35 10Other operating expenses 72,637 71,717 (920)Less cost distribution (475,697) (499,840) (24,143)Total print shop (3) 3Law office management advisory servicesStaff and office expense 290,006 321,915 31,909Travel 40,681 25,070 (15,611)Internal service and administration 32,091 36,294 4,203Other operating expenses 12,942 17,831 4,889Total law office management advisory services 375,720 401,110 25,390



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Year ended June 30, 2006 Actual Budgeted (Unfavorable)Expenses - budgetary basisMember benefits program

Staff and office expense 63,060 50,796 (12,264)'nternal service and administration 18,328 20,459 2,131Other operating expenses 168,640 167,551 (1,089)

Total member bene'fits program 250,028 238,806 (11,222)Legal publications

Staff and office expense 949,225 999,242 50,017Travel 12,848 16,230 3,382Internal service and administration 96,249 117,726 21,477Other operating expenses 63,848 87,467 23,619

Total legal pUblications 1,122,170 1,220,665 98,495Section administration

Staff and office expense 104,136 3,430 (100,706)TravelInternal service and administrationSections internal service

1,963281,960707,559

994347,646775,853

(969)65,68668,294

Other operating expenses 446 4,994 4,548Total section administration 1,096,064 1,132,917 36,853

Young lawyers divisionStaff and office expenseTravelInternal service and administration

50,4837,214

(8,732)37,2856,066

(45,811)(13,198)

(1,148)(37,079)

Other operating expenses 384,078 350,397 (33,681)Total young lawyers division 433,043 347,937 (85,106)

CommitteeStaff and office expenseTravelInternal service and administration

68,6799,325

55,16755,8676,912

47,729(12,812)

(2,413)(7,438)

Other operating expensesTotal committee

42,827175,998

51,666162,174

8,839(13,824)

Public informationStaff and office expenseContract servicesTravel

614,67922,96036,697

644,33424,66838,709

29,6551,7082,012

Internal service and administrationOther operating expenses

Total public information388,707118,262

1,181,305311,324150,067

1,169,102(77,383)31,805

(12,203)



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Year ended June 30, 2006 Actual Budgeted (Unfavorable)Expenses - budgetary basisOffice systems

Staff and office expense 412,189 453,122 40,933Internal service and administration 38,251 29,335 (8,916)Other operating expenses 253 147 (106)Less cost distribution (450,095) (482,604) (32,509)

Total office systems 598 (598)"Journal" - "News" staff pool

Staff and office expense (96,337) (119,908) (23,571)Travel 2,157 3,062 905Internal service and administration 77,818 102,221 24,403Other operating expenses 16,359 14,495 (1,864)

Total "Journal" - "News" staff pool (3) (130) (127)"Journal"

Staff and office expense 248,119 277,374 29,255Travel 845 2,759 1,914Internal service and administration 54,767 67,329 12,562Other operating expenses 456,156 443,145 (13,011)Less cost distribution (11,694) (4,250) 7,444

Total "Journal" 748,193 786,357 38,164"News"

Staff and office expense 468,523 481,150 12,627Travel 9,964 10,221 257Internal service and administration 99,101 114,800 15,699Other operating expenses 961,879 920,363 (41,516)Less cost distribution (186,468) (182,983) 3,485

Total "News" 1,352,999 1,343,551 (9,448)Directory

Staff and office expense 63,448 64,734 1,286Internal service and administration 24,304 28,755 4,451Other operating expenses 244,173 241,752 (2,421)Less cost distribution (1,095) (3,825) (2,730)

Total Directory 330,830 331,416 586

Finance and recordsStaff and office expense 1,314,558 1,391,140 76,582Contract services 28,775 59,500 30,725Travel 5,506 8,017 2,511Internal service and administration 1,010,349 1,005,878 (4,471)Other operating expenses 184,197 193,310 9,113Less cost distribution (1,740,927) (1,818,634) (77,707)

Total finance and records 802,458 839,211 36,753



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Year ended June 30, 2006 Actual Budgeted (Unfavorable)Expenses - budgetary basisResearch, planning and evaluation

Staff and office expense 123,804 126,207 2,403Contract services 8,188 9,745 1,557Travel 3,630 3,641 11Internal service and administration 927 1,151 224Other operating expenses 7,605 10,780 3,175

Total research, planning and evaluation 144,154 151,524 7,370Division directors - administration

Staff and office expense 141,590 176,050 34,460Travel 759 519 (240)Internal service and administration 2,090 1,843 (247)Other operating expenses 471 144 (327)Less cost distribution (144,910) (178,556) (33,646)

Total division directors - administrationG. Kirk Haas Fund (restricted fund) 5,000 2,000 (3,000)

Total expenses 29,243,029 29,624,867 381,838Excess of revenues over expenses - budgetary basis $ 5,030,977 $ 3,172,434 $ 1,858,543



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Year ended June 30, 2006

The Florida Bar and SubsidiariesGeneral Fund Reconciliation of Revenues and Expenses on aBUdgetary Basis to Totals Per the Consolidating ScheduleofStatement of Revenues, Expenses and Changes in Net Assets

Excess ofRevenues

Operating Over(Under)Revenues Expenses Expenses

Totals on budgetary basisAdd:

Subsidiary operationsFlorida Lawyers Association for the Maintenance of

Excellence, Inc.The Florida Attorneys Charitable Trust

Less:Adjustments for financial statement presentation purposes

Net change in the fair value of investments

Budgeted items treated as interfund transfers for basicfinancial statement purposesDepreciation

$ 34,274,006 $ 29,243,029 $ 5,030,977

15,691 100,831 (85,140)5,667 2,989 2,678

(1,779,324) (1,779,324)

(472,132) 472,132Total operating revenues, expenses and income per Consolidating

Schedule of Statement of Revenues, Expenses and Changes inNet Assets $ 32,516,040 $ 28,874,717 $ 3,641,323



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The Florida Bar and SubsidiariesClients' Security Fund Schedule of Budgeted and Actual Revenues and Expenses

Year ended June 30, 2006Operating revenuesAnnual contribution 11

RecoveriesTotal operating revenuesOperating expensesStaff and office expense

Contract servicesTravelInternal service and administrationClaims paidOther operating expenses

Total operating expensesOperating income (loss)Non-operating revenuesInvestment earnings

Total non-operating revenuesChange in net assets

Actual BudgetVarianceFavorable

(Unfavorable)

$ 1,498,62018,3391,516,959

$ 1,498,62055,2451,553,865

$(36,906)(36,906)

104,78794,6062,35340,110857,292

2,7121,101,860

114,5876,59367,345

1,498,6203,727

1,690,872

9,800(94,606)4,24027,235641,3281,015

589,012415,099 (137,007) 552,106

221,768221,768

168,000168,000

53,76853,768

$ 636,867 $ 30,993 $ 605,874

11 The annual contribution from the general fund is treated as a bUdgeted revenue itemon thisstatement. However, it is treated as an interfund transfer in the basic financial statements sectionof this report. The difference between the budget basis statement and the basic financial statementis reconciled as follows:Change in net assets - budgetary basis $ 636,867

Less: annual contribution treated as an interfundtransfer on the basic financial statements (1,498,620)

Change in net assets per Consolidating Schedule ofStatement of Revenues, Expenses and Changes inNet Assets $ (861,753)

See Independent Auditors' Report.-4 0 -


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The Florida Bar and SubsidiariesCertification Fund Schedule of Budgeted and Actual Revenues and Expenses

VarianceFavorable

Year ended June 30, 2006 Actual Budget (Unfavorable)Operating revenuesMember Fees $ 943,597 $ 932,201 $ 11,396Sales 6,784 11,750 (4,966)Total operating revenues 950,381 943,951 6,430Operating expensesStaff and office expenseContract servicesTravelInternal service and administrationOther operating expenses

583,78012,21336,42983,952156,320Total operating expenses 872,694Operating income (loss) 77,687

642,644 58,86418,306 6,09331,870 (4,559)128,257 44,305176,118 19,798997,195 124,501(53,244) 130,931

Non-operating revenuesInvestment earningsTotal non-operating revenues 22,65322,653 31,50031,500 (8,847)(8,847)Change in net assets per Consolidating Schedule ofStatement of Revenues, Expenses and Changes inNet Assets $ 100,340 $ (21,744) $ 122,084

See Independent Auditors' Report.- 41


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The Florida Bar and SubsidiariesSections Fund Schedule of Budgeted and Actual Revenues and Expenses

VarianceFavorable

Year ended June 3D, 2006 Actual Budgeted (Unfavorable)Revenues - budgetary basis

Real property, probate and trust law $ 1,055,727 $ 793,852 $ 261,875Trial lawyers 258,999 298,037 (39,038)Business law 247,625 216,595 31,030General practice 85,821 80,500 5,321Family law 264,472 184,177 80,295City, county, and local government 48,526 60,758 (12,232)Workers' compensation 88,730 103,640 (14,910)Tax law 439,808 259,694 180,114Criminal law 62,663 66,409 (3,746)Administrative law 32,235 40,038 (7,803)Environmental and land use law 114,104 87,246 26,858Practice management and technology 16,820 18,473 (1,653)Labor and employment law 51,911 71,787 (19,876)International law 94,119 116,013 (21,894)Entertainment, arts and sports law 13,082 40,402 (27,320)Health law 45,770 40,478 5,292Public interest law 8,134 8,416 (282)Government lawyers 17,914 24,840 (6,926)Elder law 78,835 112,153 (33,318)Out-of-state practice 24,082 35,957 (11,875)Appellate practice and advocacy 40,994 44,077 (3,083)Equal opportunity law 9,677 21,026 (11,349)Council of sections 7,062 6,524 538

Total revenues - budgetary basis 3,107,110 2,731,092 376,018



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The Florida Bar and SubsidiariesSections Fund Schedule of Budgeted and Actual Revenues and Expenses


Year ended June 30,2006 Actual Budgeted (Unfavorable)Operating expenses - budgetary basis

Real property, probate and trust law $ 867,970 $ 798,433 $ (69,537)Trial lawyers 134,531 187,714 53,183Business law 181,394 230,475 49,081General practice 70,728 96,566 25,838Family law 272,167 184,376 (87,791)City, county, and local government 52,355 90,796 38,441Workers' compensation 92,236 123,151 30,915Tax law 334,421 292,249 (42,172)Criminal law 42,188 74,762 32,574Administrative law 11,682 54,607 42,925Environmental and land use law 70,742 124,852 54,110Practice management and technology 9,873 21,145 11,272Labor and employment law 42,395 113,429 71,034International law 56,736 168,346 111,610Entertainment, arts and sports law 24,258 57,785 33,527Health law 34,301 60,552 26,251Public interest law 8,662 13,001 4,339Government lawyers 13,890 22,272 8,382Elder law 84,088 94,285 10,197Out-ot-state practice 30,009 33,198 3,189Appellate practice and advocacy 64,094 65,780 1,686Equal opportunity law 9,216 19,578 10,362Council of sections 4,660 . 5,182 522

Total expenses - bUdgetary basis 2,512,596 2,932,534 419,938

Change in net assets per the Consolidating Schedule of Statement ot Revenues, Expenses and Changes in NetAssets $ 594,514 $ (201,442) $ (43,920)



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Other Reports

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, RIGGS & INGRAM, LLC1713 Mahan Drive

Tallahassee, FL 32308

p I 850 878 8777F18508782344www.cricpa.com

American Institute ofPublic Accountants

Alabama Society ofPublic Accountants

Florida Institute ofPublic Accountants

Georgia Society ofCertified Public Accountants

Mississippi Society ofPublic Accountants

Alliance for CPA Firms

Center for PublicCompany Audit Firms

RIGGS &INGRAM

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIALSTATEMENTS PERFORMED IN ACCORDANCE WITHGOVERNMENTAUDITING STANDARDS

Board of DirectorsThe Florida BarTallahassee, Florida

We have audited the consolidated financial statements of The Florida Bar and Subsidiariesas of and for the year ended June 30, 2006, and have issued our report thereon datedAugust 18, 2006. We conducted our audit in accordance with auditing standards generallyaccepted in the United States of America and the standards applicable to financial auditscontained in Government Auditing Standards, issued by the Comptroller General of theUnited States.Internal Control Over Financial ReportingIn planning and performing our audit, we considered The Florida Bar and Subsidiaries'internal control over financial reporting in order to determine our auditing procedures for thepurpose of expressing our opinion on the financial statements and not to provide an opinionon the internal control over financial reporting. Our consideration of the internal control overfinancial reporting would not necessarily disclose all matters in the internal control thatmight be material weaknesses. A material weakness is a reportable condition in which thedesign or operation of one or more of the internal control components does not reduce to arelatively low level the risk that misstatements caused by error or fraud in amounts thatwould be material in relation to the financial statements being audited may occur and not bedetected within a timely period by employees in the normal course of performing theirassigned functions. We noted no matters involving the internal control over financialreporting and its operation that we consider to be material weaknesses.Compliance and Other MattersAs part of obtaining reasonable assurance about whether The Florida Bar and Subsidiaries'consolidated financial statements are free of material misstatement, we performed tests ofits compliance with certain provisions of laws, regulations, contracts and grant agreements,noncompliance with which could have a dire

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2006-2005 June 30 The Florida Bar Financial Statements

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