CUNA said it is waiting for resolution of a couple of accounting issues before reporting a loss of as much as $2 million for fiscal 2002, the group's second loss in a row, and fourth in the last seven years.
The main cause of last year's loss is the lease expense on the group's old corporate headquarters in Washington, which was vacated two years ago for larger offices at the foot of Capitol Hill. The rapidly expanding Washington office market has prevented CUNA from finding a tenant to sublease the old offices, which are located in a prime neighborhood just two blocks form the White House.
Mary Wolfenberger, chief financial officer for CUNA, said the vacant offices at 805 15th St., known as the Southern Building, are costing CUNA about $1.3 million a year, with CUNA responsible for the lease through 2005. Final accounting for the vacant lease must still be determined by CUNA's independent accountants, said Wolfenberger.
CUNA is also expected to book a loss of as much as $400,000 for its share of CUNA Network Services, the technology start-up known as CNS, Wolfenberger said.
Last year's losses follow losses of $718,000 for 2001 and come in the face of a $6 million increase, more than 50%, in CUNA dues revenue starting two years ago.
The red ink associated with the two issues will erase a slight operating net of about $5,000, in the face of a projected $615,000 operating loss, Don Larsen, treasurer of the CUNA board, told the board during its annual meeting in conjunction with last week's GAC.
Larsen emphasized that CUNA was able to reverse an expected diminution in revenues, much of it related to Sept. 11, by growing revenues 17% last year, $800,000 more than budget, including $610,000 over budget from income earned from publications. Dues income last year was $160,000 below budget, and that's before the $170,000 expected to be lost this year due to the disaffiliation of Pentagon FCU.
Final figures will not be available for several weeks, according to Wolfenberger. A report to CUNA members is to be issued later this spring.