NATIONAL EDUCATION ASSOCIATION CHARGEABLE AND NONCHARGEABLE AUDITED EXPENDITURES FOR THE FISCAL YEAR I. PROGRAMMATIC ACTIVITIES

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1 th St., N.W. Washington, DC Phone: (202) Lily Eskelsen García President Rebecca S. Pringle Vice President Princess Moss Secretary-Treasurer John Stocks Executive Director July 23, 2015 Maryland NATIONAL EDUCATION ASSOCIATION CHARGEABLE AND NONCHARGEABLE AUDITED EXPENDITURES FOR THE FISCAL YEAR CHARGEABLE & NONCHARGEABLE AUDITED EXPENDITURES BY CORE FUNCTION AREA AND STRATEGIC GOAL CATEGORY I. PROGRAMMATIC ACTIVITIES The National Education Association s (NEA) programmatic activities are organized into nineteen Strategic Goal and Core Function Categories. STRONG AFFILIATES FOR GREAT PUBLIC SCHOOLS Category 1 Partner with affiliates to build capacity and promote strategies designed to enhance public education and support member rights by providing financial support, technical assistance, field support, member engagement support, communications support, and facilitating the sharing of best practices throughout the Association: Recommended and implemented processes that enable a more seamless flow of data between the NEA and affiliates, while ensuring security and data integrity. Reviewed national, state, and local policies that affect data exchanges. Developed strategies and enterprise infrastructure to create a customer relations management system (CRM) that aligns and manages member interactions across the association, increases the quality of member engagement, limits duplicative communication with members, and increases the depth of relationships among NEA and its members. Enhanced the financial and economic knowledge and skills of NEA and Affiliate staff, management and leaders through regional and/or affinity group training. Collected existing employee benefit plan data from state affiliates to enable analysis and recommend changes that improve the effectiveness, efficiency and sustainability of employee contracts. Enhanced web presence and streamlined new-member experiences through establishment of policies and technical infrastructure to enable a single nationwide, self- enrollment web site. Created, cultivated and maintained strategic partnerships with non-traditional allies, third party validators, key legislators and committees. Developed and executed a strategic operations system that tracks threat assessments, opposition monitoring and opportunities for pushback. Recruited, engaged

2 and prepared members to take political, legislative, and legal action, moving them along a continuum of activism that lives beyond any single campaign, and engaged and partnered with ESP, retired, student, higher education and K-12 members on issues and values that resonate in their lives and profession. Built capacity and empowered targeted state affiliates with appropriate research and technical assistance to fend off attacks on the rights of educators and their students with offensive strategies for equitable tax, economic development, and education funding (TEF) policies. Inventoried, identified needs, and used research and data to develop a strategy for managing the Association s member interactions at all levels of the organization, employs a customer relations management system to aggregate information, and allows for the refinement of our engagement strategy. $117,183 $46,451,410 $46,568,593 UNITING THE NATION FOR GREAT PUBLIC SCHOOLS Category 1 Create the next generation of success in priority schools by developing initiatives to build the capacity of local affiliates, improve the skills, knowledge, linguistic and cultural competence of educators, and improve the conditions of teaching and learning; and create partnerships with ethnic minority organizations, parents, and other community groups to support students and families in priority schools: Analyzed local resources and data relevant to the GPS (Great Public Schools) Indicators. Supported members in accessing English Language Learner HCR (ELL) training. Utilized the ELL Culture and Equity advocacy and HCR organizing module to support NEA affiliates' membership growth and support their capacity to advocate for English learner-supportive policies. Introduced Keys to Excellence for Your Schools (KEYS) and conduct KEYS training and workshops for local and school leaders in Priority Schools to collectively voice organizational issues that need improvement and to assume leadership roles essential to bring about school change. Developed a network within and across NEA s targeted priority schools designed to build local capacity to design, implement, and assess teacher-led, high quality professional development activities and systems to improve instructional practice. $1,458,279 $547,908 $2,006,187 Category 2 Create the next generation of student success, education professionals, and professional practice: Provided technical assistance and advocacy strategy assistance to our Priority Schools effort by analyzing and creating sample memorandum of understanding. Collaborated with existing partners, family and community stakeholders and institutions of higher education to advance sound policies, programs and leadership practices for English learners. Designed and implemented formative and summative procedures for measuring the process and outcomes of the Center's work related to creating the next generation of student success. Provided advocacy tools for local affiliates such as sample contract language, school board policies, or sample municipal petitions that -2-

3 help achieve the GPS criteria. Built support and protected job security for education support professionals in a quality public education workforce by promoting professionalism and enhancing the relevance of ESP professions. Developed foundation of knowledge by producing research briefs (such as Mythbusters), secondary analyses and meetings with experts which highlight the Center's work related to creating the next generation of professionals; disseminate research information via Inside NEA/Research Info. Implemented state level partnerships in at least 10 states to engage state affiliates, higher education, and licensing authorities in the development, implementation, and assessment of classroom-based teacher performance assessments. Worked with partners such as the U.S. Department of Education and Educational Testing Service to convene a national forum on teacher recruitment and diversity. Designed multiple options for Career Path Compensation System and create a Compensation Systems toolkit for use by state and local affiliates to advance alternative compensation models. Provided support for the professionalization of teaching through research that enhances teacher knowledge, professional development, collaboration and evaluation. Developed a training system targeted to Peer Coaches and Peer Reviewers to prepare classroom teachers to serve in new Peer Assistance and Review programs. $1,838,156 $743,474 $2,581,630 Category 3 Create the next generation of union leadership: Worked in coordination with the Center for Great Public Schools in helping to define new roles for union leadership for our members. Expanded leadership effectiveness in leading ESP professions through the delivery of the NEA Leaders for Tomorrow (LFT) program and supporting the development of state-based leadership development programs. Trained members via the to be leaders and organizers in communities to benefit our intensive support sites in our Priority Schools effort and/or equip members to organize around our Leading the Professions effort. Created leadership strategies to engage and support local leaders in developing and implementing programs and activities that engage members in professional issues. Developed an initiative to expand the scope of the NEA Foundation s Institute for Innovation in Teaching and Learning and create a network of at least 75 partnerships. Piloted a teacher leadership practicum or fellowship focused on instructional, policy, and union leadership and targeted to teachers in NCUEA (National Council of Urban Education Associations) or TURN (Teacher Union Reform Network) locals and teachers in Priority Schools. $2,189,219 $8,902,424 $11,091,643 Category 4 Create the next generation of communication strategies to unite the nation for great public schools: Increased understanding and support by key policymakers and other critical external audiences of the successes of NEA s Priority Schools Campaign, highlighting best practices, partnerships and other supports, and the successes of other NEA affiliate-led work to improve schools, promoting policies and programs that advance Great Public Schools. Developed message frames to promote to target audiences NEA s -3-

4 Leadership initiatives in the Raise Your Hand initiatives, including: student success, accomplished professionals, dynamic leadership and collaboration. Increased NEA members and target audiences understanding of the focus, progress, promising practices of NEA s school improvement programs, including Priority Schools and Raise Your Hand, and Teacher Leadership initiatives. Provided message and media training and communication materials for capacity building efforts and message discipline/resourcing to develop Association leaders, NCSEA, NCUEA, state affiliates and NEA spokespersons abilities to effectively communicate NEA s mission, vision, as well as examples of union-led education reform and leadership. Designed and implemented formative and summative procedures for measuring the process and outcomes of the Center's work related to creating the next generation of communication strategies to Unite the Nation for Great Public Schools by reviewing the literature on knowledge utilization and crafting measures of coverage in the education press, magazines, and journals. $9,998 $2,183,402 $2,193,400 RESEARCH, POLICY, AND PRACTICE Category 1 Research that supports Association efforts to advocate for enhanced student learning and workforce quality through good policies and practices: Analyzed federal legislation and regulations to advance federal public education policy. Worked with state affiliates to provide technical assistance on federal legislation and regulations. Developed and circulated information that highlights the contributions of ESP work resulting in positive educational outcomes and informs ESP members around pro-public education initiatives. $66,014 $1,323,203 $1,389,217 Category 2 Provide resources, technical assistance, and training to affiliates to support their initiatives designed to achievements in teaching and learning: Developed and disseminated resources, materials, and information to support integrated issue campaigns related to teaching and learning issues. Coordinated the activities of the Early Childhood Education Leadership Cohort (ECELC) to provide early language, mathematics, and science literacy and early childhood policy trainings to state affiliates. Provided online resources to enhance the effectiveness of ESP advocates through the ESP Virtual Career Center for ESP members and Virtual Library for NEA leaders and staff. Developed and provided specialized training to enhance ESP effectiveness in furthering school support and wraparound services. Sustained, grew, and institutionalized comprehensive online tools devoted to education policy, research and practice focused on the criteria and indicators for Great Public Schools that can be assessed and rated as useful and relevant. $1,030,731 $807,485 $1,838,216-4-

5 Category 3 Partner with affiliates and others to support workforce quality and advance NEA s criteria for great public schools and workforce quality: Coordinated symposia to engage stakeholders in public policies important to public education. Collaborated with national partners to influence public policy related to ESP Quality and NEA s workforce quality agenda. Developed strategic engagement with selected education research think tanks and academic forums focused on public school reform and closing the achievement gaps. Built and maintained partnerships and relationships with educational, social, and community organizations that will meaningfully and measurably advance NEA's Great Public Schools criteria and local, state, and federal policy agenda. Provided staff support to the National Council for Accreditation of Teacher Education (NCATE) and the National Board for Professional Teaching Standards (NBPTS) and other governance functions. $348,088 $1,522,932 $1,871,020 Category 4 Provide support, research, and information to staff, members and affiliates to support efforts to improve teaching and learning: Provided technical assistance, policy analysis, materials and information to state affiliates. Researched, drafted, and published policy briefs and other documents, as well as host webcasts and meetings and participate in NEA and affiliate meetings to gather and share information. Developed and provided training, technical assistance, and resources to promote understanding ESP job families and demonstrate the positive ESP impact on quality learning. Enhanced KEYS components including incorporating online access to current school improvement resources into the KEYS data reports, redesigning and testing the KEYS data reports for the recently modified KEYS Family and Community surveys and the newly developed KEYS Student survey, as well as to develop strategies for capturing online KEYS user feedback to evaluate implementation effectiveness, learn what works well and disseminate best practices. Constructed, refined and maintained Research Info site in order to house and disseminate research information and data. Provided employment and compensation information on K- 12 public education employees. Provided information on the opinions, priorities, and concerns of public education employees, parents, and the public. Provided research on ESP labor force and members to elevate the professions. Provided research to advance Higher Education through collective action. Continued the ongoing collecting, transferring, and cataloguing of records, documents, and related materials for permanent housing in the NEA Archives at George Washington University's Gelman Library, and oversee the development of user aids for researchers and the general public. Responded to content-related requests from other NEA departments and state and local affiliates. $2,093,629 $2,030,729 $4,124,358-5-

6 ORGANIZING Category 1 Partner with state affiliates to engage members as a collective by supporting affiliates to activate our vast network in pursuit of the Association s vision and provide leadership development: Used values-based organizing to build member engagement/empowerment and association capacity by providing teams of lead organizers working in close partnership with targeted affiliates. Tested the next generation of professional practice in selected sites to establish efficacy and relevance to members. Implemented and assessed strategies to create the next generation of student success by securing community support for teaching and learning initiatives. Developed and tested organizing models for new and non- traditional membership types through strategic investment in affiliation of independents, outside organizations, and new markets. Researched value stream of young members and design effective methods to recruit and retain them, including Student NEA. Engaged young people in joint national campaigns on issues meaningful to them, such as social justice, student loans, and job creation. Investigated and experimented with alternative dues structures for potential members entering the professions. Developed and implemented 21st century models, programs, and initiatives to cultivate an organizing culture among affiliate staff and leaders; with a special emphasis on UniServ staff, UniServ Managers, and local leaders. Used leadership conferences and shared staffing to provide training and field experience in targeted sites. Provided selected affiliate-based training that builds staff, leader and association capacity. Used data collected internally and externally to target innovation sites and provide ongoing data for more strategic planning and implementation. Enhanced NEA/state affiliate relationships through ongoing two-way communications and coordination of NEA resources designed to meet state needs. Administered policies and guidelines and disbursed the funds for the Small States Foundation Program, UniServ Program, Local President Time Release Program and the Unified State Executive Director Program (USEDP). $49,084,885 * $52,895,380 $101,980,265 ADVOCACY AND OUTREACH Category 1 Supports the Association s efforts to achieve great public schools through federal and state legislation: Prevented anti-working family legislation from passing at the federal level, including threats to retirement security, collective bargaining, and secure funding for public K-12 and higher education. Advanced and passed pro-public education legislation at the federal level that maintains a federal focus on disadvantaged groups of students (i.e. high poverty, special education, ELL) and promotes the creation of a Great Public School for every student. Provided direct resources and assistance to affiliates in working with their state legislators and other elected officials to enact pro-public education and working family legislation. Established, built, and reinforced relationships with intergovernmental organizations to help raise awareness of state legislative battles and to leverage support for federal initiatives, including addressing regulations and legal remedies to ensure a secure funding system at the state and local level for public education. -6-

7 $3,723,410 $3,723,410 Category 2 Provides leadership, policy development and analysis, and advocacy tools to affiliates seeking to mobilize to protect members rights and strategies to improve educational outcomes: Provided Diversity, Social Justice, LGBTQ, and Bullying and Sexual Harassment training to assist state and local leaders in identifying, organizing, and mobilizing diverse people within their communities, and their Association to fend off attacks on public education. Helped educators to organize actions that advance NEA s reform agenda by providing support and resources in struggling schools through professional development. Provided assistance and support to affiliates through advocacy language, policy briefs, analysis and messaging on critical Social Justice and Civil Rights issues. Maintained and updated tools used to track collective bargaining developments and assist affiliates in achieving bargaining goals, including the contract databases, the collective bargaining laws database, and state legislative tracking on selected collective bargaining issues. Developed and provided proactive approaches to protecting and defending public pensions and public educator retirement security; share best practices across the country. Worked with state affiliates and other appropriate NEA operations to develop alternative vehicles for delivery of information designed to minimize the exposure of members to liability situations. Researched, prepared and provided specialized documents such as benefit comparisons, legislative or regulatory comments on professional liability provisions in response by another NEA unit or a state affiliate in recruitment, maintenance or advocacy for members. $12,843,659 $26,158,244 $39,001,903 Category 3 Partnerships with parents, families, communities, and other stakeholders who are essential to quality public education. Collaborate with outside organizations about social justice, civil rights issues, members rights, particularly in ethnic minority communities: Partnered with LGBTQ, Anti-bullying, Women's, Minority, and Social Justice Organizations to position NEA as a leader in social justice and human and civil rights. Participated in, represented NEA at, and ensured NEA policy goals are furthered with external partners in the health care arena. Assisted NEA affiliates with outreach, engagement, and organizing of communities and partners, particularly ethnic minority communities, in an effort to better support NEA Priority Schools sites. Assisted state and local affiliates enhancement of their own partnerships and minority community outreach and engagement, including assessing gaps in affiliates' partnerships and outreach efforts, as well as supporting and enhancing MLTP graduates and other NEA members to organize in communities. Developed and executed a strategic, measureable, and robust system of communication and outreach to outside organizations, entities, and individuals about the work of the NEA and its affiliates' to improve public education, fight for economic and social justice, and fulfill the NEA mission, vision, and core values. Identified new and potentially impactful organizations and entities, as well as identify trends in outside organizations' advocacy, organizing, civic engagement, communications, or research strategies that may impact NEA's work. -7-

8 Developed and implemented detailed processes and procedures for making, monitoring, and evaluating annual financial and in-kind contributions to partner organizations to ensure sufficient and impactful returns on investment, monitored progress towards NEA's strategic goals, and overall outreach outcomes assessed. $14,773 $11,973,598 $11,988,371 Category 4 Leadership and advocacy training to NEA activists and NEA s education reform agenda: Provided leadership and advocacy development in state and local affiliates to mobilize and organize members to fend off attacks to member's rights and promote strategies to enhance public education. Conducted the NEA Joint Conference on Concerns of Minorities and Women and the Ethnic Leaders Meeting with a continued increased focus on developing activists in the organization to be leaders in and out of the association. Conducted NEA Board Observances and engaged Observance speakers in supporting and advancing the mission of the NEA. $395,262 $825,739 $1,221,001 COMMUNICATION Category 1 Produce and distribute reliable, well-crafted state-of-the-art communications that inform and engage NEA members and other target audiences of the Association s activities to advance public education, counter the efforts of opponents of public education and public employee advocacy and strengthen the NEA brand: Leveraged communications vehicles to advance public education policies and champions in support of NEA endorsed or supported issues, policies or candidates at the federal level. Provided strategic counsel and crisis counsel and personnel to assist state affiliates with earned media, social media and other communication defensive campaigns. $146,372 $146,372 Category 2 Design and execute rapid response and strategic communication campaigns that advance Association messaging and strengthens the NEA brand via components developed through the use of up-to-date research, planning and evaluation data: Designed, engineered and maintained a platform of the GPS Network. Planned and implemented special events. Leveraged communication resources to demonstrate NEA leadership within the Raise Your Hand initiatives in the areas of student success, accomplished professionals, dynamic collaboration and leadership. $942,212 $942,212-8-

9 Category 3 Design and execute strategic communication campaigns, special projects and events, that advance the Association s vision, mission, and values, and effectively communicate the Association s key messages, strengthen the NEA brand and reputation, and engage members in positive, proactive communication and outreach with internal and external audiences: Planned and implemented strategic communication campaigns, special projects, and events. Planned and implemented special projects/events related to NEAsponsored programs such as Back to School, American Education Week, National Teacher Day, ESP Day, and additional Association co-sponsored programs. Implemented nationwide Read Across America program. $1,442,972 $1,442,972 Category 5 Develop and execute media strategies in support of the Association s efforts targeting national, state and regional media: Developed, conceived and executed comprehensive media across all platforms: traditional media, print, TV, radio, and other forms of media. Designed robust research and mapping program targeting multiple levels of Opinion Makers, using qualitative and quantitative research. Executed audit of digital engagement capabilities, products and protocols. Planned, developed and executed technical training with NEA ITS to reinforce existing and expand Communications Center website publishing and IT operations capabilities. Planned, developed, produced and performed performance assessment of member engagement and advocacy digital products. Developed and disseminated creative and strategic guidelines, templates, stock photography of NEA members, motion graphics, info-graphics and other related materials on NEAs revised branding standards and overall brand management strategies to assure a consistent identity with affiliates, members, partners and the public. Informed NEA s affiliates, leaders, members, and agency feepayers about NEA policies, programs, and accomplishments through an internal network of printed publications, including NEA TODAY and specialized constituency periodicals. Executed strategic communication programs at NEA s Representative Assembly. $1,155,436 $25,394,433 $26,549,869 BUSINESS OPERATIONS Category 1 Provide ongoing support for NEA and affiliates through the deployment of Association business systems and software applications: Maintained the financial and management software applications at a level to meet the evolving business needs of NEA and its affiliates. Assisted NEA and affiliates by providing financial and membership analysis and advice; financial management reporting and training; and newsletters and other communications including updates on specific regulatory issues. Assisted NEA and affiliates in the accurate and timely processing and reporting of financial and membership business transactions including the Annual Meeting. Managed and projected the Association s finances by monitoring revenues and expenditures and analyzing factors that affect revenue streams and cause expenditure variances. Developed sound risk -9-

10 management practices pertaining to business continuity, crisis management, safety, security, and insurance programs. Implemented a comprehensive business continuity program and conducted a training for at least 75 percent of headquarters staff on safety procedures. Provide legal and policy support to governance (e.g., Executive Committee, Board, Constitution, Bylaws, Resolutions, etc.) at the national and state levels. $5,000 $5,000 $10,000 PROGRAMMATIC ACTIVITY SUMMARY Total Programmatic Activity Chargeable Audited Expenditures..$72,650,312 Total Programmatic Activity Nonchargeable Audited Expenditures $188,020,327 Total Programmatic Activity Expenditures $260,670,639 Programmatic Activity Chargeable Percentage 27.88% Programmatic Activity Nonchargeable Percentage % II. SUPPORT/OVERHEAD NEA S Support and Overhead Activities are organized in 17 Core Function Categories. STRONG AFFILIATES FOR GREAT PUBLIC SCHOOLS Category 1 (Tactics ): Partnered with affiliates to integrate, collect, and manage data to identify threats and opportunities and to connect and activate our members. Delivered timely crisis management strategies, jointly developed for NEA and affiliates, for transitioning affiliates to alternative revenue collection methods. Planned and supported campaigns with metrics and mobilization strategies that meet association goals, and test and strengthen association capacity and membership engagement beyond a single campaign effort. Inventoried, identified needs, and used research and data to develop a strategy for managing the Association s member interactions at all levels of the organization, employs a customer relations management system to aggregate information, and allows for the refinement of our engagement strategy. $288,932 $281,778 $570,

11 RESEARCH, POLICY, AND PRACTICE Category 1 (Tactic 4.1): Continued the ongoing collecting, transferring, and cataloguing of RES records, documents, and related materials for permanent housing in the NEA Archives, and oversee the development of user aids for researchers and the general public. $ 847 $2,191 $3,038 COMMUNICATIONS Category 1 (Tactics ): Leveraged the full suite of communications vehicles to advance public education policies and champions in support of NEA endorsed or supported issues, policies or candidates at the federal level. Provided strategic counsel and crisis counsel and personnel to assist state affiliates with earned media, social media and other communication defensive campaigns. $237,211 $237,211 Category 4 (Tactics 4.1): Assessed communication capabilities and capacity. Developed and implemented strategy, tactics and training. $238,715 $238,715 Category 5 (Tactics 5.4., 5.6): Planned, developed, produced and performed assessment of Nea.org digital products. Developed and disseminated creative and strategic guidelines, templates, stock photography of NEA members, motion graphics, info-graphics and other related materials on NEAs revised branding standards and overall brand management strategies to assure a consistent identity with affiliates, members, partners and the public. $ 979,011 $2,758,372 $3,737,383 BUSINESS OPERATIONS Category 1 (Tactics ): Maintained financial and management software applications at a level to meet the evolving business needs of NEA and its affiliates. Promoted NEA and affiliate fiscal health through training and advisory services for staff and governance that enhances their ability to conduct Association business and meet regulatory requirements. Managed and projected the Association s finances by monitoring -11-

12 revenues and expenditures and analyzing factors that affect revenue streams and cause expenditure variances. Reduced loss and increased efficiency by executing a comprehensive risk management program that includes audits, compliance monitoring, and information security. Provided legal advice, counseling, agency fee support and support for the NEA Fund for Children and Public Education and Federal Election Commission matters. $4,144,356 $10,111,191 $14,255,547 Category 2 (Tactics ): Managed position control, classification costs, and all other workforce HR costs and their effect on the personnel line. Developed NEA s workplace culture to foster a workforce inspired to achieve NEA's vision and strategy. Led, directed, and aligned NEA s programs and services by engaging staff and managing resources to effectively advance the Association's strategic goals and core functions. $4,857,972 $2,323,337 $7,181,309 Category 3 (Tactics ): Led, directed, and aligned NEA s programs and services by engaging staff and managing resources to effectively advance the Association's strategic goals and core functions. Aligned and leveraged Association strategies and resources to promote innovation, adaptability, and operational efficiencies and effectiveness. $6,179,586 $14,012,802 $20,192,388 Category 4 (Tactic 4.1): Facilitated the development of NEA strategy and align both strategy and operations. $814,995 $814,995 Category 5 (Tactic ): Ensured that the Association s applications, databases, and systems are aligned with the organization's goals and objectives. Aligned and managed the delivery of technology-related products and services meet the Association s current needs and anticipate future needs of the Association. Built and operated a reliable and robust technology infrastructure to support the Association s growing communication and information technology needs. $6,213,956 $16,074,263 $22,288,

13 Category 6 (Tactic ): Implemented building projects that improved NEA s infrastructure, and continue to make NEA a green environment. Managed NEA facilities, operational support, meeting logistics, and print media production. $13,375,530 $1,176,427 $14,551,957 Category 7 (Tactic 7.1): Developed a new distribution platform to promote and sell professional materials, publications, and logo/program support merchandise. $-1,404 $-1,404 GOVERNANCE Category 1 (Tactics ): Assessed NEA's governance procedures and policies to ensure that the organization has the procedural and structural ability to effectively respond to threats, advance its goals, and operate with maximum efficiency. Facilitated and supported well-informed decision-making by the Executive Officers and Committee to advance the organization s present and anticipated needs. Facilitated and supported wellinformed decision-making by the Board of Directors that meets the contemporary and future needs of the organization. Facilitated and supported well-informed decision-making by the Representative Assembly that meets the contemporary and future needs of the organization. $5,366,065 $1,590,346 $6,956,411 Category 2 (Tactic 2.1): Facilitated and supported well-informed deliberations of appointed committees and councils. $120,933 $351,287 $472,220 Category 3 (Tactics ): Designed, delivered and validated a Core Curriculum to be used as part of all national trainings, conferences, and leadership meetings that will deepen leadership skills of current and potential member-leaders, and that will engage high-level activists who can demonstrate, through action, a deep commitment to the goals, mission and vision of the NEA. Designed and planned two national leadership conferences (east and west), for implementation in the second year of the budget, that will incorporate the core curriculum and meet the unique needs of NEA's diverse membership and develop the next generation of activist leaders. Coordinated learning opportunities for leaders and members in order to ensure they have the decision-making skills, advocacy skills, -13-

14 knowledge, and tools necessary to positively impact NEA goals and be effective in the roles in which they serve. $932,431 $2,323,058 $3,255,489 Category 4 (Tactics ): Provided strong Association leadership voice and engagement, giving highest priority to those events, topical issues, and relationships that best advanced NEA s goals. Facilitated and supported leadership initiatives that strengthened NEA s alliances with U.S. and international labor unions. $419,694 $1,904,320 $2,324,014 Category 5 (Tactics 5.1): Implemented governance business policies and practices and provided a high level of customer service to support an effective governance corps. $3,611 $3,611 SUPPORT/OVERHEAD SUMMARY Total Support/Overhead Chargeable Audited Expenditures..$43,697,919 Total Support/Overhead Nonchargeable Audited Expenditures.$53,383,894 Total Support/Overhead Audited Expenditures.$97,081,813 III. OVERALL ANALYSIS OF NEA AUDITED EXPENDITURES Total Chargeable Audited Expenditures $116,348,231 Total Nonchargeable Audited Expenditures...$241,404,221 Total Audited Expenditures..$357,752,452 Final Chargeable Percentage.32.52% Final Nonchargeable Percentage 67.48% * In light of the U.S. Supreme Court's decisions in Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507 (1991), and Locke v. Karass, 555 U.S. 207 (2009), NEA has allocated its UniServ (continued...) -14-

15 grants program expenditures on the basis of Maryland State Education Association s (MSEA) determination of the chargeable percentage of the grants it received in the fiscal year, 68%. Thus, the resulting UniServ chargeable amount is $43,499,267, rather than $ 55,013,779 that was used for purposes of the NEA audit. The reason for the difference between the new figure for this program and its counterpart in the NEA audit is that, at the time the audit was conducted, most of the agency fee state affiliates had not yet determined their fiscal year chargeable percentages. Accordingly, for purposes of the audit, the expenditures in the UniServ grants program were allocated using a conservative adjustment of the average chargeable percentage of UniServ grants to agency fee state affiliates for the year ended August 31, 2013, 86%. In addition, NEA has allocated its expenditures in the Small States Foundation Program in accordance with MSEA s determination of the overall chargeable percentage of its total expenditures for the fiscal year 63.80%, resulting in a chargeable amount of $1,934,107, rather than $2,122,061 that was used for purposes of the NEA audit. The reason for the difference between the new figure for this program and its counterpart in the NEA audit is that, at the time the audit was conducted, most of the agency fee state affiliates had not yet determined their fiscal year chargeable percentages. Accordingly, for purposes of the audit, the expenditures in the Small States Foundation program were allocated using a conservative adjustment of the average chargeable percentage of agency fee state affiliates total expenditures for the year ended August 31, 2013, 70%. Similarly, NEA allocated its expenditures in the Unified State Executive Director Program ( USEDP ) in accordance with MSEA s determination of the chargeable percentage of its executive director s salary and benefits for the fiscal year, 49%, resulting in a chargeable amount of $717,953, as compared with $1,054,952 that was used for purposes of the NEA audit. Again, the reason for the difference between the new figure and its counterpart in the NEA audit is that, at the time the audit was conducted, most of the agency fee state affiliates had not yet determined their fiscal year percentages. Accordingly, for purposes of the audit, the expenditures in the USEDP were allocated using a conservative adjustment of the average chargeable percentage of expenditures for the salary and benefits of agency fee state affiliate executive directors for the year ended August 31, 2013, 72%. Finally, since the agency fee locals affiliated with MSEA have allocated their expenditures into chargeable and nonchargeable categories, NEA is allocating its expenditures in the Local Presidents Release Program by the average chargeable percentage, 91.41%, reported by those locals, resulting in a chargeable amount of $298,364, as compared with $244,801 that was used for purposes of the NEA audit. The reason for the difference between the new figure for this program and its counterpart in the NEA audit is that, at the time the audit was conducted, most of the agency fee affiliates had not yet determined their fiscal year chargeable percentages. Accordingly, for purposes of the audit, the expenditures in the Local Presidents Release Program were allocated using a conservative adjustment of the average chargeable percentage of agency fee local affiliates total expenditures for the fiscal year ended August 31, 2013, 75%. (continued...) -15-

16 NEA has allocated its expenditures in the Affiliate Financial Assistance Program in accordance with MSEA s determination of the overall chargeable percentage of its total expenditures for the fiscal year, 63.80%, resulting in a chargeable amount of $914,939, rather than the amount of $1,003,851 that was used for purposes of the NEA audit. The reason for the difference between the new figure for this program and its counterpart in the NEA audit is that, at the time the audit was conducted, most of the agency fee state affiliates had not yet determined their fiscal year chargeable percentages. Accordingly, for purposes of the audit, the expenditures in the Affiliate Financial Assistance Program were allocated using a conservative adjustment of the average chargeable percentage of agency fee state affiliates total expenditures for the year ended August 31, 2013, 70%. As a result of these modifications to the allocation of expenditures in the UniServ grants, Small States Foundation, USEDP, Local Presidents Release, and Affiliate Financial Assistance Programs, the total chargeable amount for Category 1 of Organizing is $49,084,885, as compared with $61,159,699 in the NEA audit. In light of the decisions in Lehnert and Locke, see note *, which recognized that part of a local s affiliation fee which contributes to the pool of resources potentially available to the local is assessed for the bargaining unit's protection, even if it is not actually expended on that unit in any particular membership year, NEA has allocated its Unified Legal Services Program (ULSP) reimbursements on the basis of the MSEA s determination of the chargeable percentage of the reimbursements it received in the fiscal year, 35.91%. Thus, the resulting ULSP chargeable amount is $8,035,106. This figure differs from the ULSP chargeable amount used for purposes of the chargeable/nonchargeable schedule included in the NEA audit, $15,215,460, because the amount in the audit was based upon a conservative adjustment of the average chargeable percentage of ULSP reimbursements to agency fee state affiliates for the year ended August 31, That percentage was 68%. NEA used this method because, at the time its audit was conducted, most of those state affiliates had not yet determined their fiscal year chargeable percentages. In addition, for purposes of the NEA audit, Educators Employment Liability (EEL) insurance expenditures and Attorney Referral Program expenditures (ARP) were treated as chargeable. However, MSEA does not make EEL and ARP coverage available to agency feepayers and therefore such expenditure, $11,460,797, has been treated as nonchargeable with regard to MSEA. Thus, the resulting chargeable total for Category 2 of Advocacy and Outreach is $12,843,659, as compared with $31,484,810 in the NEA audit. As a result of the adjustments in the programmatic activities, see notes * and, the Programmatic Activity Chargeable Percentage is 27.88% as compared with 39.66% that was in the NEA audit. Therefore, for purposes of these calculations, the figure 27.88% was used to allocate certain expenditures in the Support/Overhead activities in accordance with the procedure discussed in footnote 3 on pages of the NEA audit. -16-