VP finance expects surplus
Assistant News Editor
There is no question about it: over the years, the MSU finances have often been in a state of bedlam.
With a tendency of incurring a greater expenditure than revenues could match, the MSU saw a deficit of $925,799 in 2009/2010, followed by a deficit of $149,078 in 2010/2011.
While it is true that such numbers may paint a grim picture, there is a hint of optimism.
As the academic year began with a new Board of Government led by MSU President Matt Dillion-Leitch, new policies were promised. Of those, fiscal management took priority and it was thought that financial benefits may accrue from a general restructuring.
“The deficits demanded action which would steer us back on course and see positive results,” said MSU VP (Finance) Duncan Thompson.
The financial woes were addressed in a variety of ways. The first of change was switching the reviewer of financial statements from Deloitte to KPMG LLP, which is a standard practice for external audits.
Through a thorough analysis of the MSU’s accounting practices, KPMG LLG, who assessed the statements of operations and examined changes in net assets and cash flow, did not report on significant internal control deficiencies.
Such a positive trend can be attributed to the expectations set by the Board of Directors on the MSU.
After the near-$1-million debt in 2010, most of which resulted from the rising cost of administering the dental and health plans without adjusting the student fee to match the increase in claimants, the governing body outlined that it must lower expenses by five per cent, even if sales would not increase.
With such an expectation, the deficit was largely cut. It was projected that a deficit of $402,309 for the 2010/2011 year would be observed, however, a deficit of only $149,078 was reported.
Positive trends such as above are further evident if one looks into the inner workings of the MSU.
“We saw a concerted effort from all business last year to improve their customer service and satisfaction. This led to an increase in volume of costumers,” said Thompson.
“TwelvEighty, under new management, made an effort to improve food quality. Union Market worked extremely hard to get competing suppliers to offer us the best prices. Underground Media + Design managed to pick up some of the largest courses on campus for their courseware project, such as first year Engineering and Pyschology,” he added.
Thompson noted that despite the optimism, work needs to be done. One such area is regarding the MSU’s investment policy.
As it stands currently, there exists no mechanism within the MSU to direct investment policies.
Consequently, there is little to no direction regarding both how an investment is done and the willingness of an organization to contribute to the MSU’s portfolio.
“Our current investment portfolio is very low risk meaning very low yield, mostly in the bond market.”
In KPMG’s audit report, a suggestion was offered. It was observed that by drafting an investment policy regarding the MSU’s level of market risk, the MSU would be able to use funds more efficiently.
As to projections for this year, Thompson hesitated.
“The budget released earlier this year predicts that if all our businesses and services manage to keep exactly as we have predicated, we expect a surplus of $120,163 at the end of the year.”
“However, since the majority of all our business happens during the academic year, it’s still too early to tell exactly,” he added.
Even if it is “too early to tell”, the positive trends suggest that with the appropriate management, the MSU will no long worry over deficit. Instead, the challenge may be of a different nature: mo’ money, mo’ problems.