I am pleased to submit the annual report of the Treasurer of the International Union Against Tuberculosis and Lung Disease (The Union) for the fiscal year ended 31 December 2018.
The Union in 2018 continued to receive strong support from its donors for its work on TB and tobacco control as it focused its efforts in the core areas of its mission. Working in 65 countries, The Union implemented programmes on TB and tobacco control, provided training and convened conferences. Its 780 staff and consultants based out of 10 offices across the world assisted in the publication of scientific papers, provided technical assistance to countries and implemented health programmes. The 49th Union World Conference on Lung Health brought thousands of technical experts and doctors to the Netherlands. Union region conferences were organised in North America and the Middle East and a dedicated Europe track featured at the Union World Conference.
The changes to the global funding environment in 2018 have proved challenging for The Union. The key donors have significantly reduced operational support for the organisation while continuing to fund technical activities. This has resulted in the organisation operating at a deficit for the year 2018. Furthermore, we have to face a temporary disparity of our financial commitment towards some of our partners and related parties. The changes in donor funding will also have an effect in 2020 with the ending of the large programme funded by USAID – Challenge TB.
The closing of projects as well as lower levels of overheads requires careful management our cash flow and our current obligation for programme funds. As a matter of priority, the organisation has put in place measures to focus on raising revenues and reducing costs to ensure financial stability. These measures seek to ensure that the organisation functions more efficiently, satisfies the requirements of our donors and our banks and improves the financial health indicators of The Union. We have secured a five-year project with Agence Française de Développement in 2019 and continue to seek new initiatives and projects to fulfill our mission.
We will focus on strengthening the core areas of the organisation. We will invest in lung health, develop the courses with a high level of expertise that The Union has acquired through almost one hundred years of expertise in TB and lung health and significantly increase the number of members in the coming years. The Union conference will be a major focus of the organisation moving forward.
To secure its competitiveness in its activities, The Union will invest in information technology, human resources, and fundraising. The organisation will strengthen its relationships with existing donors and bring new partners and new projects. In the years ahead, The Union will ensure the best possible management of its financial resources and meet the commitment outlined in its strategic priorities.
Fiscal 2018 Highlights
- Total net result for the year 2018 was a deficit of 4.008 million euros compared to a deficit of 1.318 million euros in 2017.
- Total revenue was 43.264 million euros compared to 51.470 million euros in 2017.
- Total expenditure was 47.272 million euros compared to 52.789 million euros in 2017.
- Revenue from grants, gifts and operating grants amounted to 33.1 million euros compared to 39.5 million euros in 2017.
The net result of the year significantly impacted our net equity, which in 2018 is – 5.3 million euros.
The key to The Union’s success, and essential to maintaining a leadership position in global health, will be to focus on our areas of strength. With the breadth of resources entrusted to The Union by donors, government agencies, members and other supporters, the need for prudent fiscal oversight is great. Working closely with our Board of Directors and our auditors, we continue to review and improve our financial policies, procedures and practices.
FINANCIAL STATEMENTS
This report describes the financial position of The Union. The document on the following pages consists of the financial statements for Fiscal Year 2018 audited by KPMG.
The audited financial statements present a snapshot of The Union’s entire resources and obligations at the close of the fiscal year. A complete Audit Report, including detailed comments and notes to supplement the Balance Sheet and the Income and Expenditure Accounts, is available upon request. We have presented the accounts in euros and US dollars in order to facilitate comparison of accounts.
The financial statements and the accompanying notes of The Union include all funds and accounts for which the Board of Directors has responsibility. These statements illustrate The Union’s formal financial position presented in accordance with generally accepted accounting principles.
The auditor, KPMG, provides an independent opinion regarding the fair presentation in the financial statements of The Union’s financial position. Their opinion is attached to this report. Their examination was made in accordance with generally accepted auditing standards and included a review of the system of internal accounting controls to the extent they considered necessary to determine the audit procedures required to support their opinion.
I would like to thank you, the members of The Union, and our donor agencies for your confidence and continued support of The Union.
Thank you.
Richard Shepro
Treasurer