Affairs of the Association

To the Members of The Texas State Historical Association

We have audited the accompanying statement of financial position of The Texas State Historical Association (the “Association”), a not-for-profit organization, as of August 31, 2010, and the related statements of activities and changes in net assets, and cash flows for the year then ended. These financial statements are the responsibility of the Association’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Association as of August 31, 2009, were audited by other auditors whose report dated March 2, 2010, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Association is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Association’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Association as of August 31, 2010, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Dallas, Texas

February 28, 2011

	August 31,
	2010	2009
Assets
Cash and cash equivalents	$339,678	$371,901
Investments	524,839	691,176
Receivables	258,417	133,776
Pledges receivable	91,701	104,726
Inventory	279,820	270,972
Prepaid expenses	11,193	19,344
Fixed assets, net	20,714	32,628
Endowment investments	1,963,885	1,927,142
Total assets	$3,490,247	$3,551,665
Liabilities and Net Assets
Liabilities:
Accounts payable and accrued liabilities	$238,386	$120,968
Total liabilities	238,386	120,968
Net assets:
Unrestricted	575,869	519,808
Temporarily restricted	712,107	983,747
Permanently restricted	1,963,885	1,927,142
Total net assets	3,251,861	3,430,697
Total liabilities and net assets	$3,490,247	$3,551,665

See accompanying notes to financial statements.

	Unrestricted		Temporarily Restricted		Permanently Restricted		Total
Revenue, gains, and other support:
Publications and other sales	$	256,421	$	-	$	-	$	256,421
Investment income		44,024		108,258		1,753		154,035
Contributions		359,768		589,468		34,990		984,226
Association activities		30,547		-		-		30,547
Membership income		211,591		-		-		211,591
Educational activities		73,585		-		-		73,585
Contributed services		137,789		-		-		137,789
Philosophical society		42,525		-		-		42,525
Awards		4,400		-		-		4,400
Other income		85,287		-		-		85,287
Net assets released from donor and program restrictions		969,366		(969,366)		-		-
Total revenue, gains, and other support		2,215,303		(271,640)		36,743		1,980,406
Expenses:
Program services:
Digital gateway		136,480		-		-		136,480
Handbook production		80,399		-		-		80,399
Publications		510,198		-		-		510,198
Southwest historical quarterly		118,181		-		-		118,181
Educational activities		295,144		-		-		295,144
Association activities		119,804		-		-		119,804
Awards		17,260		-		-		17,260
Texas Almanac		248,543		-		-		248,543
Total program services		1,526,009		-		-		1,526,009
Fundraising		129,280		-		-		129,280
General and administrative		503,953		-		-		503,953
Total expenses		2,159,242		-		-		2,159,242
Changes in net assets		56,061		(271,640)		36,743		(178,836)
Net assets at beginning of year		519,808		983,747		1,927,142		3,430,697
Net assets at end of year	$	575,869	$	712...