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Chair's Report 2006
FINANCIAL HIGHLIGHTS
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2006 |
2005 (restated) |
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| Revenue |
$22,220,714 |
$11,212,618 |
| Grant allocations / Adjustments |
8,739,445 |
8,177,810 |
| Legal Aid Society |
5,536,939 |
2,411,437 |
| Administration |
353,566 |
339,465 |
| Excess (deficiency) |
$7,590,764 |
$283,906 |
At fiscal year end the Directors elected to transfer additional
funds from unrestricted net assets to internally restricted
net assets. The internally restricted account has been established
in order to allow funding stability for ongoing programs that
otherwise could be adversely affected by volatile fluctuations
in both the prime rate and the average balances in lawyers’
general trust accounts. The Foundation was able to top up
internally restricted net assets to the full extent of our
internal reserve policy, which left a remaining unrestricted
net asset balance of $3.86 million at year end. This balance
resulted largely from the recognition of $3.5 million in accrued
interest revenues.
The Board reviewed 87 regular applications for funding (74
last year) of which 73 were approved (59 last year). In addition,
the Board reviewed 17 Special Project Fund applications, of
which 12 were approved.
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 2005-06 was $1,236,740 an increase from last year's investment
income of $1,199,307.
Lawyers' general trust account interest received in 2005-06
totalled $20,935,582, which is a significant increase from
last year's receipts due to the higher average prime rate
in the latter part of the fiscal year. As well, higher average
balances in the lawyers’ general trust accounts, owing
to the continuing robust provincial economy, are expected
to remain high for the near future. In response, in November
2005, the Directors approved and allocated funds to a Special
Project Fund in the amount of $1,500,000. This fund was committed
to the extent of $903,000 by fiscal year end, and is expected
to be fully subscribed. Additional active measures are now
under consideration to attract new qualified applications
and to prudently manage expectations related to this recent
significant rise in revenues.
General Comments
As noted above, revenue from lawyers' general trust accounts
for the fiscal year ending March 31, 2006 was $20.9 million.
25% of this revenue source is due to the Legal Aid Society
of Alberta. In the latest fiscal year, the amount due to Legal
Aid of $5.5 million slightly exceeds 25% of such revenue due
to the impact of recognizing accrued revenue receivable and
a restatement of the prior year.
The Directors of the Foundation have now established financial
reserves sufficient to allow three years of stable funding
for core grant recipients thus enabling them to better plan
for the future. During 2006-07, it is expected that some core
grants will merit strategic increases in their existing core
program capabilities, and in some cases to also undertake
new program initiatives. Project grant applications will continue
to be given due consideration. 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 March 2006, the
consolidated average balances in the Province of Alberta exceeded
$1.1 billion. The Foundation believes these deposits should
receive market based interest compensation.
I am pleased to recognize the Credit Unions for a notable
improvement to their banking arrangements for lawyers’
general trust accounts this past year. 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 continues
to amount to hundreds of thousands of dollars. The Foundation
and its many funded community agencies are most appreciative
of the leadership and support of the cooperative financial
institutions.
I would like to express my appreciation to the Foundation's
Board of Directors and to the staff, David Aucoin and Diana
Porter, 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 2006
Archived Reports
Page Updated: September 2006
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