State Budgeted Funds. ASB Associational (Checking) Fund $1 mil. State Treasury Fund #0355 $5.26 mil

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State Budgeted Funds State Treasury Fund #0355 $5.26 mil ASB Associational (Checking) Fund $1 mil License fees Exam fees - Bar exam, Reciprocity, Authorized House Counsel Professional exam fees - Pro Hac Vice Peitition for Reinstatment Disciplinary Admin and Cost Fees Special Membership Dues MCLE Fees Law Student Registration Lawyer Referral Dues/Fees Legal Specialization Fees Other, misc.

Non-State Budgeted Funds Client Security Fund $469k Meetings & Events Fund $419k Clearing Account Fund Volunteer Lawyers Fund $255k Alabama Lawyer Fund $191k Sections Fund $312k CSF Assessments Recoupments Annual Meeting Other Programmatic Events Consolidated Fee Invoice Payments Grants - ALF and Legal Alabama Advertising and publication sales Section Activities

2-1 STATUTORY AUTHORITY CHAPTER 2 BUDGETING The Executive Budget Office (EBO) of the Department of Finance by statute is responsible for preparing the initial information concerning the state budget and its execution, revenue estimates, review of appropriation acts and fiscal analyses. The EBO also assists the Director of Finance and the Governor in the formulation of the budget; analyzes and revises the estimates of revenues and requests for appropriations of all state agencies; and supervises and coordinates the expenditures and other fiscal operations of the agencies. 2-2 THE BUDGETING PROCESS A. OVERVIEW OF THE BUDGETING PROCESS Formulation of the budget begins with the preparation of estimates of expenditure requirements for the next fiscal year by the administrative head of each budgeted agency. These estimates are submitted annually to the EBO on or before the first day of the third month preceding each regular session of the Legislature. Annually, the EBO provides to the agencies a set of instructions and forms for preparing a budget request. The budget is prepared for each fund, department, appropriation class and function by major object of expenditure in accordance with the state-level chart of accounts. The Budget Management Act is described fully in Code of Alabama 1975, 41-19-1 through 41-19-12. A detailed statement showing actual agency revenue for the preceding year and estimated revenue for the current and next fiscal year must be submitted by each budgeted agency. The agency is required to provide a personnel classification budget request form showing employees (fulltime equivalents) and amounts by classification. 1) If the agency use the SBFS (Data Dump) then PB will general the Form 9 for personnel data. 2) If the agency select to not use SBFS, then agencies will provide a Form 9 for personnel staffing using Excel or other method and attach this to the document in PB. The EBO, after receiving the agency budget requests, prepares a tentative budget not later than the first day of the second month preceding each regular session of the Legislature. In its preparation, the EBO utilizes revenue forecasts prepared by the staff, state officials, and other consultants and economists. After the budget hearings are held, the Governor finalizes the budget recommendations. Consideration is given to the revenue estimates prepared by the Department of Finance, the estimated expenditure requirements submitted by the state agencies, the proposed budget recommendations made by the EBO, and to the testimony given at the budget hearings. Rev. 07/2017 State of Alabama Fiscal Policy and Procedures Manual Page 3

The budget document, as recommended by the Governor, is published and transmitted to the Legislature on or before the second legislative day of each regular session. The budget document is comprised of three parts. Part I contains the Governor's budget message and pertinent fiscal data. Part II provides the detailed recommended appropriations for each agency and institution. Part III contains proposed appropriation bills and revenue bills which are needed to implement the recommendations made in Parts I and II. The appropriation bills indicate the programmatic appropriation to each agency and institution and the sources of funds from which each appropriation is to be paid. The appropriation recommendations, subject to alteration by the Legislature, are adopted by the Legislature as the Appropriation Acts. The Appropriation Acts identify the source of funding and programmatic (functional) areas for which expenditures are authorized. Both the Alabama Constitution and the statutes require a balanced budget for annual financial operations. In the event that revenue collections do not meet revenue projections, the Governor is required to prorate appropriations and restrict allotments to prevent an overdraft or deficit in the fiscal year for which appropriations are made. B. APPROPRIATIONS Appropriations are primarily determined each year with the passage of the two major appropriation bills. Alabama's annual Appropriation Acts include legally adopted budgets for the General Fund, the Education Trust Fund (ETF) and other budgeted funds. State agencies may not spend more than the amount appropriated by the Legislature. An agency also may receive a supplemental appropriation through a separate appropriation bill. Appropriations--the authorization for an agency to make expenditures and to incur obligations for specific purposes--are made at a program level. In the STAARS, these programmatic appropriations are captured through an appropriation class. The EBO is responsible for administering the appropriations. Prior to the beginning of each fiscal year, EBO will enter the appropriation amounts into the STAARS Budgeting system by fund, department, and appropriation class, and in some cases appropriation unit for each agency. C. ALLOTMENTS An allotment is a quarterly division of the agency's appropriation into amounts that may be encumbered or expended during a fiscal quarter. Agencies may not spend more than the year-to-date allotment amount for each fund, department, appropriation class, and in some cases appropriation unit. Allotments are determined from the budgeted quarterly amount on the agency's operations plan as approved by the EBO. If an agency does not spend all of the allotment in a quarter, the unused allotment amount will carry over and will be available for expenditure in the next quarter, but only within the same fiscal year. At any point in the year, the amount available for expenditure is determined by the year-to-date allotment amount minus year-to-date expenditures and encumbrances. Encumbrances are an obligation of state funds and encumber or reserve a portion of the annual appropriation and allotments. Rev. 07/2017 State of Alabama Fiscal Policy and Procedures Manual Page 4

ASB Annual Expense Summary FY 2008 - FY 2018 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 Salaries and Benefits Travel - In/Out state Rentals & Leases Utilities & Communications Professional Services Supplies, Materials, Expenses Grants & Awards $1,000,000 $500,000 $- FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 Proj.

Alabama State Bar Comparative Budget to Actual - REVENUES 3rd Quarter 2017-18 Revenues 2017-18 2016-17 Increase (Decrease) Total Budget YTD Actual Total Budget YTD Actual Actual License Fees 4,875,000.00 4,506,888.75 4,826,250.00 4,493,498.75 13,390.00 Bar Exam Fees 575,000.00 508,900.00 575,000.00 427,200.00 81,700.00 Reciprocity Fees 35,000.00 26,250.00 35,000.00 27,675.00-1,425.00 Authorized House Counsel Fees 18,000.00 15,125.00 18,000.00 15,200.00-75.00 Pro Hac Vice Fees 135,000.00 127,050.00 135,000.00 98,725.00 28,325.00 Disciplinary Admin. Fees 65,000.00 25,100.00 50,000.00 25,350.00-250.00 Disciplinary Costs Recoupment 30,000.00 17,586.80 20,000.00 16,119.50 1,467.30 Petitions for Reinstatement 20,000.00 5,250.00 10,000.00 7,519.19-2,269.19 Miscellaneous 0.00 0.00 5,000.00 0.00 0.00 Subtotal Fund 355 5,753,000.00 5,232,150.55 5,674,250.00 5,111,287.44 120,863.11 Special Membership Dues 893,750.00 714,512.50 884,650.00 700,237.00 14,275.50 Law Student Registrations 100,000.00 97,300.00 100,000.00 86,150.00 11,150.00 Bar Exam Review 2,000.00 925.00 2,000.00 1,060.00-135.00 MCLE Fees 140,000.00 123,325.00 120,000.00 112,650.00 10,675.00 Legal Specialization Fees 15,000.00 3,712.50 10,000.00 4,800.00-1,087.50 IOLTA Non-Compliance Fees 1,000.00 0.00 1,000.00 0.00 0.00 Miscellaneous Income 5,250.00 7,969.50 3,100.00 5,030.25 2,939.25 Lawyer Referral Dues/% Fees 40,000.00 25,954.09 35,000.00 35,816.49-9,862.40 Credit Card Fees 20,000.00 13,386.60 20,000.00 12,042.15 1,344.45 Subtotal ASB Checking 1,217,000.00 987,085.19 1,175,750.00 957,785.89 29,299.30 Total Revenues 6,970,000.00 6,219,235.74 6,850,000.00 6,069,073.33 150,162.41 QR-1

Alabama State Bar Comparative Budget to Actual - EXPENSES 3rd Quarter 2017-18 Expenses 2017-18 2016-17 Increase (Decrease) Total Budget YTD Actual Total Budget YTD Actual Actual Salaries 3,222,068.00 2,207,202.31 3,292,000.00 2,503,125.52-295,923.21 Benefits 1,207,932.00 756,127.26 1,200,000.00 792,655.76-36,528.50 TOTAL PERSONNEL COSTS 4,430,000.00 2,963,329.57 4,492,000.00 3,295,781.28-332,451.71 Travel In-State 95,000.00 80,972.30 150,000.00 50,552.22 30,420.08 Travel Out-of-State 110,000.00 22,501.80 60,000.00 28,140.01-5,638.21 Rentals & Leases 960,000.00 682,738.85 884,000.00 647,539.07 35,199.78 Utilities & Communications 130,000.00 79,146.57 145,000.00 83,830.33-4,683.76 Professional Services 670,000.00 479,008.99 635,000.00 356,705.07 122,303.92 Supplies, Materials, Expenses 230,000.00 139,582.51 227,000.00 140,609.39-1,026.88 Grants, Awards 225,000.00 144,550.00 257,000.00 174,373.85-29,823.85 Miscellaneous (Reserves) 120,000.00 0.00 0.00 0.00 0.00 Total Expenses 6,970,000.00 4,591,830.59 6,850,000.00 4,777,531.22-185,700.63 QR-2

Alabama State Bar Combined Statement of Revenues & Expenses October 1, 2017 Through June 30, 2018 Revenues Treasury Fund #0355 State Bar Checking Fund Client Security Fund Alabama Lawyers Fund Meetings & Events Fund VLP Fund Total License Fees 4,506,888.75 0.00 0.00 0.00 0.00 0.00 4,506,888.75 Member Dues 0.00 714,512.50 0.00 0.00 0.00 0.00 714,512.50 Professional Exam Fees 550,275.00 0.00 0.00 0.00 0.00 0.00 550,275.00 Professional Registration Fees 127,050.00 0.00 0.00 0.00 0.00 0.00 127,050.00 Disciplinary Fees and Costs 42,686.80 0.00 0.00 0.00 0.00 0.00 42,686.80 Petition for Reinstatement 5,250.00 0.00 0.00 0.00 0.00 0.00 5,250.00 CSF Asmts and Recoupments 0.00 0.00 473,627.22 0.00 0.00 0.00 473,627.22 Allotments and Grants 0.00 0.00 0.00 66,000.00 60,000.00 130,833.01 256,833.01 Contributions 0.00 0.00 25.00 0.00 0.00 0.00 25.00 MCLE Fees 0.00 123,325.00 0.00 0.00 1,200.00 0.00 124,525.00 Legal Specialization Fees 0.00 3,712.50 0.00 0.00 0.00 0.00 3,712.50 Law Student Registration Fees 0.00 97,300.00 0.00 0.00 0.00 0.00 97,300.00 Lawyer Referral Service 0.00 25,954.09 0.00 0.00 0.00 0.00 25,954.09 Annual Meeting Registration 0.00 0.00 0.00 0.00 170,852.00 0.00 170,852.00 Legal Expo 0.00 0.00 0.00 0.00 26,100.00 0.00 26,100.00 Leadership Forum - Class Dues 0.00 0.00 0.00 0.00 23,900.00 0.00 23,900.00 Special Events 0.00 0.00 0.00 0.00 2,075.00 0.00 2,075.00 Sponsorships 0.00 0.00 0.00 0.00 58,524.00 7,800.00 66,324.00 Ads/Subscriptions/Pub Sales 0.00 0.00 0.00 46,037.70 40.00 0.00 46,077.70 Royalties 0.00 0.00 0.00 5,114.27 0.00 0.00 5,114.27 Miscellaneous 30.00 22,251.10 60.00 0.00 4,371.60 0.00 26,712.70 Total Revenues 5,232,180.55 987,055.19 473,712.22 117,151.97 347,062.60 138,633.01 7,295,795.54 1 QR-3

Treasury Fund #0355 State Bar Checking Fund Client Security Fund Alabama Lawyers Fund Meetings & Events Fund VLP Fund Total Expenses Personnel Costs 2,207,202.31 0.00 28,787.00 0.00 0.00 76,299.56 2,312,288.87 Employee Benefits/Taxes 754,427.26 1,700.00 11,500.35 0.00 0.00 27,262.75 794,890.36 Rentals and Leases 670,054.80 12,684.05 0.00 0.00 0.00 0.00 682,738.85 Professional Services 242,347.50 220,493.56 0.00 20,878.02 136.25 0.00 483,855.33 CSF Claims 0.00 0.00 272,772.06 0.00 0.00 0.00 272,772.06 Printing 66,000.00 1,964.53 0.00 95,552.00 25.00 319.38 163,860.91 Grants and Awards 84,050.00 60,500.00 0.00 0.00 8,000.00 0.00 152,550.00 Postage 0.00 60,394.63 0.00 112.00 0.00 0.00 60,506.63 Advertising/Promotional 9,559.73 7,858.20 0.00 0.00 6,135.20 0.00 23,553.13 Travel In-State 79,188.68 1,783.62 2,002.02 0.00 0.00 5,133.61 88,107.93 Travel Out-of-State 18,418.18 4,083.62 0.00 0.00 0.00 0.00 22,501.80 Insurance 23,058.00 0.00 0.00 0.00 0.00 2,310.70 25,368.70 Office Expense 875.00 28,975.37 50.00 0.00 1,159.66 1,541.31 32,601.34 Training and Education 3,605.00 5,079.90 0.00 0.00 2,938.13 395.00 12,018.03 Utilities and Communication 9,869.29 10,971.05 0.00 0.00 0.00 0.00 20,840.34 Annual Mtg - Audio and Video 0.00 0.00 0.00 0.00 (37.83) 0.00 (37.83) Annual Mtg - Food and Catering 0.00 0.00 0.00 0.00 2,094.97 0.00 2,094.97 Annual Mtg - Honorarium 0.00 0.00 0.00 0.00 3,290.00 0.00 3,290.00 Leadership Forum 0.00 0.00 0.00 0.00 79,075.96 0.00 79,075.96 Committee and Board Mtgs 0.00 0.00 478.80 0.00 1,412.24 254.84 2,145.88 Staff/Officer Expenses 0.00 0.00 0.00 0.00 10,114.85 0.00 10,114.85 Special Events 0.00 0.00 0.00 0.00 9,527.25 8,963.68 18,490.93 Miscellaneous 0.00 6,686.31 0.00 0.00 13,721.00 5,259.01 25,666.32 Total Expenses 4,168,655.75 423,174.84 315,590.23 116,542.02 137,592.68 127,739.84 5,289,295.36 Excess (Deficit) 1,063,524.80 563,880.35 158,121.99 609.95 209,469.92 10,893.17 2,006,500.18 2 QR-3

Alabama State Bar Cash & Investments Report FY 2017-18 Treasury Fund #0355 State Bar Checking Fund Client Security Fund Alabama Lawyers Fund Meetings & Events Fund VLP Fund Clearing Fund Total Cash Balance - Oct 1, 2017 $ 61,875.41 $ 32,907.33 $ 21,922.56 $ 48,686.10 $ 18,958.31 $ 49,574.53 $ 2,220,606.24 $ 2,454,530.48 YTD Net Activity 1,063,524.80 563,880.35 158,121.99 609.95 209,469.92 10,893.17 (2,218,161.76) (211,661.58) Transfer from (to) Investments - (400,000.00) (100,000.00) - - - - (500,000.00) Trans from (to) Other Funds/Sources - 40,000.00 - - (2,138.54) (2,757.60) - 35,103.86 Cash Balance - June 30, 2018 $ 1,125,400.21 $ 236,787.68 $ 80,044.55 $ 49,296.05 $ 226,289.69 $ 57,710.10 $ 2,444.48 $ 1,777,972.76 Investments Balance - Oct 1, 2017 $ - $ 4,422,559.65 $ 3,203,368.38 $ - $ - $ - $ - $ 7,625,928.03 Interest and Dividends Earned - 71,897.22 51,462.86 - - - - $ 123,360.08 Change In Market Value - 65,562.02 45,985.46 - - - - $ 111,547.48 Investment Fees - (7,115.73) (4,963.14) - - - - $ (12,078.87) Transfer to (from) Investments - 400,000.00 100,000.00 - - - - $ 500,000.00 Investments Balance - June 30, 2018 $ - $ 4,952,903.16 $ 3,395,853.56 $ - $ - $ - $ - $ 8,348,756.72 QR-4

Alabama State Bar Sections Account Summary Report Balances as of June 30, 2018 Opt-In Sections Opt-Out Sections Administrative Law 7,609.42 Elder Law 325.00 Appellate Practice 12,546.03 Environmental Law 20.00 Bankruptcy & Commercial Law 78,038.86 Family Law 250.00 Business Torts & Anti-Trust Law 11,639.60 Labor & Employment Law 40.00 Business Law 35,245.41 Construction Law 40,242.93 Criminal Justice 18,010.00 Disabilities Law 11,457.00 Dispute Resolution 3,155.72 Elections Ethics & Gov't Relations 3,176.16 Federal Court Practice 6,083.12 Government Contracts Section 2,902.12 Health Law 13,532.59 In House Counsel 8,509.60 Intellectual Property 10,596.56 International Law 9,230.80 Leadership Forum Section 4,593.37 Litigation 67,061.33 Military Law 4,988.34 Non-Resident Members Section 2,222.84 Oil, Gas & Mineral Law 3,190.09 Real Property, Probate & Trust 20,997.12 Senior Lawyers 11,795.00 Solo & Small Firm Section 25,525.78 Taxation 39,821.77 Women's Section 27,261.67 Workers' Compensation Law 23,971.77 Young Lawyers' Section 94,216.94 TOTAL $597,621.94 $635.00 QR-5

Alabama State Bar - Treasury and State Bar Funds FY 2019 Projected Totals - Model 1 Staff Level - 39 employees (6 funded by other sources) FY17 Actuals FY18 Projected Actuals FY19 Projection Explanation Revenues License Fees $ 4,500,031 $ 4,514,484 $ 4,585,000 Based on est. of 14,000 regular members @ $325, plus avg. of $35,000 in late fees Professional Exam Fees 556,250 636,675 600,000 2 year average Professional Registration 137,700 167,400 153,000 Based on 2 year average of 510 PHV registrants @ $300 Disciplinary Admin. Fees 31,450 31,100 40,000 Based on 2 year average of 40 admin fee receipts @ $1,000 Disciplinary Costs Refund 26,077 25,748 26,000 2 year average Petitions for Reinstatement 8,269 6,750 7,500 2 year average Miscellaneous 19,824 24,552 22,000 2 year average Special Membership Dues 700,725 715,825 715,000 Based on 4,400 special members @ $162.50 Law Student Registrations 104,050 112,800 108,000 2 year average Bar Exam Review 1,100 1,125 1,100 2 year average MCLE Fees 130,725 142,100 142,000 Prior year Legal Specialization Fees 6,563 4,488 5,000 2 year average Lawyer Referral Dues/% Fees 37,511 29,445 33,478 2 year average Total Revenues $ 6,260,274 $ 6,412,492 $ 6,438,078 Expenses Salaries $ 2,950,768 $ 2,737,846 $ 2,932,000 Benefits 956,919 944,540 1,001,205 Total Personnel Costs 3,907,687 3,682,386 $ 3,933,205 Travel - In state 100,639 100,541 145,000 Travel - Out of State 46,375 76,963 55,000 Rentals & Leases 867,891 917,903 920,000 Utilities & Communications 109,856 109,502 110,000 Professional Services 529,794 663,748 500,000 Supplies, Materials, Expenses 202,522 203,092 210,000 Grants & Awards 256,974 227,750 225,000 Assumes staff level of 39 employees after Ed Patterson's retirement Total Expenses $ 6,021,739 $ 5,981,885 $ 6,098,205 Operating Excess (Deficit) Projection $ 238,535 $ 430,607 $ 339,873

Alabama State Bar - Treasury and State Bar Funds FY 2019 Projected Totals - Model 2 Staff Level - 40 employees (6 funded by other sources) FY17 Actuals FY18 Projected Actuals FY19 Projection Explanation Revenues License Fees $ 4,500,031 $ 4,514,484 $ 4,585,000 Based on est. of 14,000 regular members @ $325, plus avg. of $35,000 in late fees Professional Exam Fees 556,250 636,675 600,000 2 year average Professional Registration 137,700 167,400 153,000 Based on 2 year average of 510 PHV registrants @ $300 Disciplinary Admin. Fees 31,450 31,100 40,000 Based on 2 year average of 40 admin fee receipts @ $1,000 Disciplinary Costs Refund 26,077 25,748 26,000 2 year average Petitions for Reinstatement 8,269 6,750 7,500 2 year average Miscellaneous 19,824 24,552 22,000 2 year average Special Membership Dues 700,725 715,825 715,000 Based on 4,400 special members @ $162.50 Law Student Registrations 104,050 112,800 108,000 2 year average Bar Exam Review 1,100 1,125 1,100 2 year average MCLE Fees 130,725 142,100 142,000 Prior year Legal Specialization Fees 6,563 4,488 5,000 2 year average Lawyer Referral Dues/% Fees 37,511 29,445 33,478 2 year average Total Revenues $ 6,260,274 $ 6,412,492 $ 6,438,078 Expenses Salaries $ 2,950,768 $ 2,737,846 $ 3,032,000 Benefits 956,919 944,540 1,034,155 Total Personnel Costs 3,907,687 3,682,386 $ 4,066,155 Travel - In state 100,639 100,541 145,000 Travel - Out of State 46,375 76,963 55,000 Rentals & Leases 867,891 917,903 920,000 Utilities & Communications 109,856 109,502 110,000 Professional Services 529,794 663,748 500,000 Supplies, Materials, Expenses 202,522 203,092 210,000 Grants & Awards 256,974 227,750 225,000 Assumes staff level of 40 employees after Ed Patterson's retirement Total Expenses $ 6,021,739 $ 5,981,885 $ 6,231,155 Operating Excess (Deficit) Projection $ 238,535 $ 430,607 $ 206,923

FY 2018 Projected Totals - Model 1 Professional Services 8% Utilities & Communications 2% Supplies, Materials, Expenses 3% Grants & Awards 4% Rentals & Leases 15% Total Personnel Costs 65% Travel - Out of State 1% Travel - In state 2% Supplies, Materials, Expenses 3% Professional Services 8% Utilities & Communications 2% FY 2018 Projected Totals - Model 2 Grants & Awards 4% Rentals & Leases 15% Total Personnel Costs 65% Travel - Out of State 1% Travel - In state 2%