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Chairman's Report 2005
FINANCIAL HIGHLIGHTS
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2005 |
2004 |
| Revenue |
$10,845,054 |
$12,865,273 |
| Grant allocations / Adjustments |
$8,177,810 |
$ 8,453,257 |
| Legal Aid Society |
$2,411,437 |
$ 2,854,653 |
| Administration |
$339,465 |
$ 430,139 |
| Excess (deficiency) |
$ (83,658) |
$ 1,127,224 |
The Directors elected to transfer funds from unrestricted
net assets to the internally restricted net assets reserve.
The reserve has been established in order to provide funding
stability for ongoing programs that otherwise could be adversely
affected by volatile fluctuations in both the prime rate and
the average balances in solicitors’ general trust accounts.
The Foundation was able to top up the reserve in 2004-05 to
the full extent of our reserve policy.
The Board reviewed 74 applications for funding (78 last year)
of which 59 were approved (62 last year).
In accordance with the Insurance Act, the Foundation’s
funds are kept invested in short-term money market instruments
and low-risk marketable securities. Income from investments
for 2004-05 was $1,199,307, a decrease from last year's investment
income of $1,381,700.
Lawyers' general trust account interest received in 2004-05
totalled $9,645,747, which is a significant decrease from
last year's receipts due to the lower average prime rate.
The drop in revenue would have been more significant were
it not for somewhat higher average balances and the positive
impact of more favorable interest rate arrangements. With
rates estimated to be fairly stable in the next few months,
the Foundation expects 2005-06 revenue to increase somewhat
from 2004-05.
General Comments
As noted above, revenue from lawyers' general trust accounts
for the fiscal year ending March 31, 2005 was $9.6 million
of which 25% or $2.4 million is due to the Legal Aid Society
of Alberta. Investment income was $1.2 million. Successful
negotiations with financial institutions in the past year
are expected to improve annual interest revenue in the coming
year to the extent of about $900,000 per annum.
The Directors of the Foundation established financial reserves
sufficient to provide three years of secure funding for core
grant recipients thus enabling them to better plan for the
future. During 2005-06, it is expected that some core grants
may merit a modest increase and that any project grant applications
will be closely scrutinized. Because it is difficult to predict
interest rate trends and other economic factors, the Foundation
reviews annually its core funding budget and other funding
initiatives.
The Foundation takes seriously its stewardship role in relation
to the total trust deposits held in general trust accounts
at the various financial institutions. In July and August
of 2004, the overall balance exceeded $1 billion. The Foundation
believes these deposits should receive market based interest
compensation that reflects both the very substantive balances
and their overall stability. In particular, I am pleased to
recognize RBC, TD Canada Trust, CIBC, ATB and HSBC for significant
improvements to their banking arrangements. The only institution
to steadfastly refuse to pay a reasonable interest rate continues
to be the National Bank of Canada, with the result that the
shortfall in annual interest revenue to the Foundation amounts
to hundreds of thousands of dollars.
The Foundation and its’ funded community agencies are
most appreciative of the leadership and support of the cooperative
financial institutions in this time of diminished financial
resources and lower interest rates.
I would like to express my appreciation to the Foundation's
Board of Directors and in particular to Mona Duckett, Q.C.,
the past Chair, and to the staff, Diana Porter and David Aucoin
for their guidance of the Foundation over the past year.
All of which is respectfully submitted.
Steve Raby, Q.C.
Chair
Alberta Law Foundation
July 2005
Archived Reports
Page Updated: July 2005
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