Anyone who has taken a look at the most recent financial accounts for the IFA will know they are scant on detail and reveal very little. The 2014 accounts show the IFA brought in just over €12.9m in income for the year ended March 2014, with expenditure of €11.5m. After profits from its subsidiary IFA Telecom are added, the IFA made a surplus (profit) of more than €2m for its 2014 financial year.

However, there has been a lack of transparency regarding the organisation’s finances and how it takes in and spends its money. This week, the Irish Farmers Journal was granted access to a copy of the IFA’s draft accounts for its 2015 financial year ended 31 March 2015, with greater detail provided on the specifics of the accounts.

Income

Funds derived from membership fees and levies account for the bulk of the IFA’s income. For its 2015 financial year, income for the IFA fell slightly by 1% to €12.76m, mainly as a result of a slight decrease in membership and a reduction of income from the European Involvement Fund (EIF).

Gross membership income for the year was back marginally, falling to just under €7m. From this, €955,000 was paid directly out to FBD to cover the health insurance plan offered as part of membership. This left the IFA a net figure of €6m from membership.

There was a slight decrease in members for the year, although still in excess of 85,000. Income from the EIF, basically levies collected from each sector throughout the year, fell from €4.77m for the IFA’s 2014 financial year to €4.69m in 2015.

Added to this, the IFA received €1.28m from the FBD Trust and €25,000 from the Agricultural Trust. Outside of these income streams, the IFA also generated more than €300,000 in revenue from dividends. Almost half of these dividends came from FBD (€140,000), while the remainder was paid out from a special investment fund managed by Davy stockbrokers. The annual profits of IFA Telecom, which were just under €490,000 in 2015, are added to the year end result for the IFA.

Expenditure

On the expenditure side of things, the majority of the IFA’s spending goes on staff costs and expenses for voluntary members. Total expenditure for 2015 increased by 7% to €12.25m, with much of this increase attributed to the expense of running the beef protests in 2014 and the special 60th anniversary celebrations.

Overall staff costs in 2015 were €6m, up from €5.6m in 2014. The IFA’s wage bill last year was €3.9m, similar to 2014, which equates to an average wage of just over €55,000 for the 67 employees of the IFA. PRSI costs for the year amounted to €415,000.

The total staff costs include the IFA’s pension costs of €1.1m in 2015, up from €920,000 the previous year. The IFA says the increase in its pension contribution was due to the sale of some older assets belonging to the defined benefit pension fund. The proceeds of this were split between IFA and the pension fund for the employees that were in the old defined benefit scheme.

The yearly payment contribution into the pension fund varied between 23% and 28% of staff wages in the past two years. This yearly cost was agreed during the transition of the pension from a defined benefit to a defined contribution scheme to get staff agreement. It was to ensure the existing members would receive a pension fund that could buy an annuity to ensure two thirds of the estimated salaries at retirement.

While there were slight increases in salaries taken into account by the actuary in arriving at this figure, there was no pension increases built-in post-retirement.

The other major expense for the IFA is expenses for voluntary members of the organisation. Voluntary expenses for last year totalled €1.6m, which is in line with the previous year.

This includes expenses for mileage, subsistence and the costs when they are away from the farm. The amount of unclaimed expenses by voluntary members rose from €1.2m in 2014 to €1.5m, nearly one full year of total ongoing costs.

Expenditure on communications and PR were the other two major expenses. Combined, they increased from below €900,000 in 2014 to €1.1m for 2015. This expenditure included costs such as advertising, text messaging services and printing costs, all of which increased due to the beef protests in 2014, according to the IFA.

The average cost of providing food, running buses and feeding volunteers during the beef protest was in the region of €150,000, which is a one-off cost. Another one-off cost included the IFA’s 60th anniversary celebrations, which cost the association in the region of €300,000 in the year.

The IFA is the only farming organisation that maintains a full-time office in Brussels and this does not come cheaply. In 2015, it cost just over €680,000 to run the office, although the cost increased in that year due to the overlap of senior management.

Other costs during the year included membership recruitment and promotion (€970,000), premises costs such as rent, rates, electricity etc (€500,000), as well as affiliation fees with the likes of Copa Cogeca (€150,000).

Assets

For 2015, the IFA carried a net asset book value of just over €19m, which was down marginally from the previous year. By far, the organisation’s most substantial asset is its special reserve or investment fund, which it established in 1985.

Last year, the fund was valued at €13.8m, which is a decline from its €16.4m valuation the previous year. This decline is attributed to the deterioration in the FBD plc share price. With the FBD share price down from €18.50 on 31 March 2014 to €10.025 on 31 March 2015, the IFA wrote off €4.2m from the book value of its shareholding in FBD, down to €5m.

The remainder of the IFA’s investment fund is under management.

Davy stockbrokers manages some €7m of the IFA’s reserves, with a mandate to make conservative to medium-risk investments on behalf of the IFA. €1m is under management with BCP asset management.