The ABCs of It
An Audit Bureau of Circulations Manager Offers Tips on Some of the Biggest Issues and Easiest Places for Errors Facing NIE Professionals
O ne area that rises to the level of legal concerns for all NIE managers is following the rules and guidelines of the Audit Bureau of Circulations. A not-for-profit organization established in 1914, ABC is the leading third-party, auditing organization in the United States. Its audits are conducted in accordance with rules established by the ABC board of directors and govern not only how audits are conducted, but also how publishers report their circulation figures.
ABC conducts audits annually at member newspapers with circulations of more than 25,000. Newspapers with less than 25,000 circulation have the choice of an annual audit or being audited every other year.
Accurate circulation numbers are of critical importance to the nation’s newspapers and their ability to charge for advertising. With NIE newspapers in the classroom now accounting for 226 million copies a year or 2.4 percent of the U.S. paid newspaper circulation, knowing ABC guidelines is an integral part of the NIE manager’s job.
Diane Rusnak is one of three publisher-relations managers who work for ABC. An important part of her job is to work with NIE programs to ensure that accurate circulation figures are maintained. Rusnak lists a few of the recurring issues that affect NIE managers.
1 Insufficient Funding for NIE-Distributed Newspapers - Newspapers can distribute newspapers to schools provided they are ordered by a teacher, and newspapers collect 25 percent of the paid subscription price for those papers. The payment can be made by the individual school or by a sponsor, and newspapers (NIE programs) can create events to cover those costs.
Sometimes newspapers give papers to the schools and plan to raise the money later. That’s acceptable. But if cash has not been received for the papers at the time of the auditor's review, those circulation numbers are not allowed.
2 Incorrectly Calculated NIE Newspaper Subscription Rates - In order for NIE papers in the classroom to qualify as paid circulation, the paper must receive 25 percent of the basic single-copy price. The issue is that newspapers have a variety of pricing structures–based on frequency or term of delivery. They need to use the rate for the term and frequency that most accurately reflects what is being delivered to the school.
If a school orders a month’s worth of newspapers, the one-month rate applies. If the school orders six months’ worth of newspapers, the newspaper has to use the six-month rate as the foundation. If they deliver the Sunday paper, they have to make sure to use the Sunday rate as part of the frequency.
3 Ineligible Fundraising Efforts - Newspapers can design programs intended to solicit donations for NIE programs. But there are restrictions in order for those donations to be eligible to pay for newspapers in the classroom and be applied to paid circulation numbers. Individual donations to NIE must be voluntary and beyond the cost of any other goods or services.
For example, if an item is being sold to the public as part of an NIE fundraiser, any profits are revenue and can’t be designated as revenue to NIE. If the base cost of the item is $10 and is being sold for $15, there has to be a designation that the item can be bought for $10 and the additional $5 is truly a donation that is over and above the cost of the item.
“It has to be voluntary,” says Rusnak. “It can’t be automatic or because you make a purchase. If you’re buying a ticket to a tournament, the cost of buying the ticket can’t be donated to NIE.
“Newspapers are not allowed to buy their own newspapers and claim that for NIE. If the paper buys a product, any profit is the profit of the paper,” says Rusnak. “An NIE donation means truly donating. The only way it can go toward NIE paper costs is if the money is truly donated and no one gets anything in return.”
4 Affidavits Not Collected - When sponsors are funding newspapers in classrooms, ABC needs to be sure the newspapers are making it to the schools, especially since the schools are not paying. Affidavits are required from teachers acknowledging the receipt and use of the newspapers.
Newspapers need to be certain they collect those affidavits. There are samples on the ABC Web site, www.accessabc.com, or newspapers can create their own as long as use, quantity and dates of delivery are included.
“People often collect affidavits once a year prior to an audit,” says Rusnak. “I suggest doing it once at the end of each semester when it’s fresh in the mind of the teacher and when you are certain an individual teacher is still there.”
5 Circulation Limits - Many newspapers believe NIE newspapers in the classroom are limited to five percent of the total average paid circulation of the newspaper. That is only true for NIE home-delivery programs. Traditional NIE school-delivery programs and the program that serves registered college students are permitted to develop circulations of any size.
More About ABC
“The industry has grown and evolved, but the basic concept of ABC is the same. It is focused on circulation, along with Web auditing and reader profile services,” says Rusnak. “I can’t emphasize enough that we are not here to penalize people or deny people the ability to operate programs. We’re here to work with people and make sure they are in compliance with ABC. We try not to say no, but to show how to help make a program work.
“Many people assume a fundraising idea is approved because they know someone else is doing it or found an idea on a generic Web site or some other newspaper site. That doesn’t mean it’s been ABC-approved. You have to contact ABC with a description of a program for approval. We offer a free program review. Call us and discuss it so you don’t take a risk at audit time.”
ABC also offers generic seminars and will participate in conferences where they are asked to speak. There are two ABC sessions scheduled at the NIE conference this month in Los Angeles. One of the publisher-relations managers will also come to a newspaper to provide consultation if the paper covers expenses.
An important note is that current guidelines on the ABC Web site are dated 2001. A new version with more examples will be coming out in late spring or early summer this year.
If there are any questions on NIE, members should contact an ABC Publisher Relations Manager at (847) 605-0909 or go to the ABC Web site www.accessabc.com.
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