In the face of numerous unanticipated financial difficulties that have come to light this semester, the Arts Undergraduate Society’s Executive unveiled their Financial Recovery Plan to the AUS Council last Wednesday.
“Like the real Marshall Plan, this isn’t just us throwing foreign aid at something,” he said. “It’s a plan to allow all parties to recover themselves.”
In addition to the deficit of approximately $30,000 incurred by Frosh, the AUS owes $18,000 to both the federal and provincial governments in back taxes, as well as $83,000 to the Faculty of Arts due to the organization’s failure to pay their share of the Arts Student Employment Fund.
The Marshall Plan, which is based around the four tenets of accountability, automation, solvency, and growth and partnership, is designed to address the AUS’s current financial challenges and to ensure that similar issues do not occur in the future. The first step in this process, Marshall said, was re-evaluating the organization’s business partnerships both within and outside of McGill. The assessment resulted in the dismissal of the AUS’s former accountant and the hiring of RSM Richter, a professional accounting firm, to manage the society’s books.
“One of the main advantages that attracted us to RSM Richter was the fact that they were able to provide us not only with an audit service, but with an entire team, a team that includes a tax attorney, legal advisors, and an accounting service,” said Majd al-Khaldi, AUS VP finance.
Thanks in part to RSM Richter’s negotiations, the AUS’s federal tax debt is now settled. While Marshall is still in negotiations with the provincial government, he said he is hopeful that situation will soon be remedied as well.
“We’re now reaching out and trying to get help, because we’ve realized that the traditional perspective of … some student leaders … to kind of take on challenges and … refuse to ask questions, has been damaging for the AUS,” Marshall said.
In addition to revisiting the AUS’s accounting structure, al-Khaldi and Marshall have been working with the group’s banking institution, the Royal Bank of Canada, to revisit the AUS’s investments. According to al-Khaldi, this is long overdue.
“The AUS has had investments in the past, and since the financial crisis I would hazard to guess that they weren’t revised properly,” he said. “In that sense, we haven’t been using our money to its fullest potential.”
Marshall also emphasized the assistance the AUS has received from the Faculty of Arts administration, particularly with regards to the debt they owe on the Arts Student Employment Fund.
“With regards to ASEF, we do have the dean’s support for a payment plan, so that’s going to be paid over the next few years,” Marshall said.
“The Faculty has had discussions with the AUS about the Arts Student Employment Fund, and we are working together on a plan that ensures that students continue to benefit from the Fund and allows AUS to meet its obligations without putting further stress on its cash flow situation,” said Dean Christopher Manfredi of the Faculty of Arts in email to the Tribune. “Student associations are independently incorporated entities whose relationship to the university is governed by memoranda of agreement. For the most part, the relationship should be governed by the provisions of these agreements, but everyone obviously has an interest in collaborating to ensure that funds are properly administered.”
Despite the difficulties they have faced this year, both Marshall and al-Khaldi emphasized that all student organizations can learn from the AUS’s experience. To help ensure that a similar situation doesn’t affect another campus group, the Executive is working on a document that will outline standard financial, legal, and tax procedures for student-run corporations in Quebec.
“For legal purposes, we all have to be companies, but we aren’t great at running them, clearly,” Marshall added. “I’m hoping to share this with all student associations because there’s a huge benefit to sharing this sort of thing. I don’t want anyone else to ever have to go through the experience we went through with all of this. But it’s a great year. Student services haven’t been affected except in the positive.”