Structural deficits, administrative clawbacks draining union’s cash flow.
“At this projected rate, if nothing at all changes—so if we stay exactly on budget target, and nothing is done—during the summer, we will run out of money.”
This was Concordia Student Union (CSU) Finance Coordinator John Hutton’s prediction following the release of the union’s audited financial statements for the 2017-18 year. He said if the CSU continues down its current financial path, the union’s cash flow will dry up, meaning its expenditures will outweigh its revenues.
According to the report, the CSU’s net worth increased by more than $3,000 to about $13 million last year. However, this is largely due to a roughly $346,000 increase in the value of the Student Space, Accessible Education and Legal Contingency (SSAELC) fund, and the union has limited flexibility in how it spends this money. The SSAELC fund supports initiatives like the Woodnote Housing Co-operative.
The report shows many discrepancies between the CSU’s budget for 2017-18 and its actual balance for that fiscal year, which ended on May 31. While the budget for the year predicted a roughly $1,300 surplus for the clubs budget line for 2017-18, it ended the year with a more than $78,000 deficit. The operating budget line, which funds executive salaries, campaigns and legal expenses, among other things, reported a deficit of more than $205,000 instead of the roughly $88,000 surplus that was budgeted for.
Two of the union’s budget lines, advocacy and clubs, are in a structural deficit, meaning significant changes need to be made to the structure of their budgets to keep them from running deficits.
Hutton said these discrepancies were not caused entirely by poor budgeting: clubs were especially active and asked for more funding than usual in the previous year, but he could not say why. He said a discrepancy of nearly $20,000 between the budget and the financial reality of the Housing and Job Bank (HOJO) was the result of a grant from the Dean of Students Office that the union budgeted for but did not receive.
The most significant reduction in funds was the result of a clawback by the university in 2017-18. Hutton said that, in 2015, the university misallocated funds to the union, providing them with an unusually high amount. This mistake was only discovered in the previous fiscal year, at which point the administration clawed back some of the funds in the CSU’s account and withheld others that would have otherwise been allocated to the union, totalling roughly $104,000 in missing revenue.
To correct this, Hutton suggested a combined 36 cent per-credit increase in the fee levies for operations, clubs and advocacy, which would be matched by a 36 per cent decrease in the SSEALC fund fee levy. This would provide the union with more cash while maintaining the same fees for students. Hutton said a one cent per-credit increase is roughly equal to $7,000-$7,600 per initiative, which translates to a budget increase of $250,000-$275,000 for a 36 cent fee levy.
Graphic by Ana Bilokin.