A recently filed financial audit shows that in 2018, the year before it plunged into turmoil, the National Rifle Association managed to slow the financial bleeding it saw during the previous year.

But the audit raised new questions about the gun group’s spending habits and its longterm financial viability.

The documents, filed with the North Carolina Secretary of State, show that the NRA ended 2018 with a nearly $9 million drop in its net assets compared to the year before.

What makes that number puzzling is that, at the same time, the group actually increased the amount of cash it had, while also upping its membership dues by a relatively whopping $42 million.

The NRA had seen a precipitous drop since 2015 in its net assets, a figure that measures the value of the gun group’s assets minus its liabilities. In 2015, the NRA recorded $75.4 million. By the end of 2018, the statements show, that number had dropped to $16 million.

The decreasing net assets came in the years before the organization plunged into a period of deep turmoil, including an attempted leadership coup in April 2019 staged by Iran-Contra star Oliver North. The losses also came as the group braced for what was then an anticipated investigation by New York Attorney General Letitia James.

Ahead of the expected investigation, the group was scrambling to firm up its financial position by demanding records from all of its significant vendors documenting their pecuniary relationship. The only vendor to allegedly refuse the request was ad firm Ackerman McQueen, a move that has led to a very public falling out.

The NRA sued Ackerman in April, accusing it of failing to provide financial records documenting the pair’s relationship. James also formally launched her office’s investigation in April.

First flagged by CREW, the 2018 financial report suggest that amid an overall downward trend, the NRA may have been able to partly stanch the bleeding last year. The $9 million drop was the least significant downward shift that the group had recorded since 2015, and an improvement on 2017’s $11 million decrease.

The 2018 decrease in net assets occurred while the NRA increased the amount of cash in its coffers. That means the group gained money while, from an accounting perspective, spending more than it brought in.

But Brian Mittendorf, an accounting professor at Ohio State University who has studied the NRA’s financials, told TPM after reviewing the statements that the group appears to have brought in the extra cash through methods that either increased its longer term obligations or which are unsustainable.

For example, the 2018 documents also show a $42 million increase in membership dues compared to 2017, with $170 million in total membership dues coming in last year.

Membership revenues had dropped by more than $35 million between 2016 and 2017.

The NRA includes items like magazine subscriptions in its accounting of membership dues. The gun group conducted a big magazine drive last year, taking in a haul of cash from its members in exchange for a long-term, multi-year subscription to its magazine.

That increased the group’s cash intake, Mittendorf said, but also increased its liabilities to its members — ten years of as-yet-unwritten and unprinted magazines — to the point where it helped bring the overall value of the non-profit down.

“The cash came in up front, but they took on a bigger obligation,” Mittendorf said. “They may have gotten new revenues, but some of that is illusory.”

At the same time, the NRA also froze its pension plan in early 2018 — another source of cash savings.

The filing also shows that the NRA has begun to receive bigger cash inflows from the NRA Foundation, a 501(c)3 non-profit affiliate based in Washington D.C.

The NRA recorded a nearly threefold increase in the amount of money it received from the NRA Foundation in reimbursements for salaries, office space, and other operating expenses between 2017 and 2018. That number went from $6 million to $17.4 million last year.

It’s not clear why the reimbursement increased. Mittendorf told TPM that “it would indicate that [the NRA] is generally more reliant on transfers from the Foundation.”

And while cash receipts from the NRA Foundation and magazine drive helped the NRA in 2018, the Ohio State professor suggested that the group’s current annual expenses of $164 million may not be sustainable without significant cuts or a new source of revenue.

“The way the business model has been run over the past three to four years is not sustainable,” Mittendorf said. “Something has to give.”

An NRA representative did not return a request for comment. In the past, the NRA has said that it has made “financial and administrative decisions that work in the best interests of its members.”

The falling out between the NRA and Ackerman McQueen has unearthed extensive allegations of self-dealing on both sides. August, for example, has seen a trail of allegations that the NRA tried to buy a Dallas-area mansion for its chief, Wayne LaPierre, in a transaction that would have been conducted through a legal entity set up by Ackerman McQueen.

The $6 million home was never purchased, but the allegation is representative of the kind of muck that has been slung since the pair’s relationship deteriorated.

It’s difficult to know at this point whether the ongoing turmoil is having any further effects on the group’s finances. The most serious allegations began to surface in April 2019, and we have yet to see financial information about the group from this year.