***Please share this post–it is especially intended for the people that are unlikely to read this blog!
Dear Fellow Arts Students,
Tonight at AUS Council, I will be discussing an idea that came out of FMC relating to long term planning and management of AUS funds. Please read through this whole post–I am excited about this opportunity to engage Arts students in the VP Finance portfolio. First, here is some background:
The AUS currently has an excess surplus ($265,000) invested in a cash-able GIC. The upside is that this investment is very safe, and liquid–we can access these funds fairly easily and at short notice; many investments lack this trait. The major downside, however, is that the return on this GIC is smaller than that of the rate of inflation. This means that in the long term, our investment will devalue (albeit at a very slow rate).
The reason that the AUS has this surplus is as follows:
- In 2005/2006, McGill University purchased from the AUS the space in the Arts building where the Subway restaurant is now located (the AUS used to have control over this space). We were given $130,000 for this space, and it was put aside as long-term savings (this is listed as an “endowment fund” on our financial statements, available online).
- During fiscal year 2012, both Revenu Quebec and McGill University were holding AUS funds, for the respective reasons of us not filing our taxes and not producing audited statements for a few years. If you look at our financial statements, you will see that we had $94,799 in restricted funds as a result of these setbacks. Last year, VP Finance Saad Qazi rectified these issues by seeing to it that our back-taxes were filed, and producing Notice to Readers for the years that we did not receive an audit (these are essentially statements from an accountant that say that our file is in decent order, but incomplete).
- As a result of Saad’s actions, the $94,799 was released to the AUS, all in a fairly compact period of time. The focus during Saad’s term, and during much of my term, was fixing our accounting practices and working towards our first audited financial statements since the year 2008. I can proudly say that this task was accomplished during my term.
- At this point, you will notice that of our $265,000 surplus, these funds account for $224,799. Another contributor to our surplus was the fact that the AUS operated at a very limited capacity while its funds were frozen, so once we recovered the frozen funds, it turned out that we had saved money while operating at limited capacity.
- It was more recently in my term that I was able to put the accounting problems behind me and start looking towards the future. Here follows the plan that was discussed at FMC (note that no official decision has been made as to whether or not this plan will be implemented–but if it is popular, I will encourage the incoming AUS executives to carry it out).
The motivation behind this plan is to spend our surplus down. During my term, I investigated other investment strategies, but after much thought and consultation with other AUS members, the consensus is that it is not in the AUS’ or Arts students’ best interest for the AUS to seek major or high-risk investments. This plan will also aim to engage Arts students with AUS operations, especially those who feel that their voices and complaints are not being heard. The plan has three parts:
- Determine an acceptable amount of surplus to maintain–the AUS needs to have some money on hand in case of emergency.
- The AUS gradually spends the current surplus down to this level. We set a goal for how many years we want to take before we reach the desired level. I imagine chipping away at $15,000 – $20,000 per year (this number can be discussed further and I do appreciate input on this).
- We would spend this money by seeking project proposals from the population of Arts students. I know that a decent portion of Arts students feel that the AUS does not offer adequate services (I attest that we have a great offering of services, but there is absolutely room for improvement). It is these students from whom I most want to hear. The AUS has the resources to help you out, and the executives are hardworking people who really do care about your experience here, and are open to new ideas to better it. Once proposals are collected, they will be voted on–perhaps by AUS Council and/or a committee chosen from the general population of Arts students to do this. The mover of the winning proposal would then be invited to help implement the project. Ideally all of this would be done somewhat early in the year, so that we can get the project going and complete it before the academic year ends.
As I have said, this plan is still in the discussion phase, and I am hereby soliciting input from interested Arts students. Please email me finance.aus@mail.mcgill.ca if you have any opinions or suggestions relating to the above proposal.
I feel that this plan is catered towards the general population of Arts students, especially those who feel that the AUS does not serve them adequately. We AUS executives try our best to reach out to all of our constituents, but it is not as easy as it sounds. We send listervs, update the website, post on Facebook and Twitter, and put up posters for major events. Perhaps more can be done on our part, but if you do not take advantage of these channels of communication, then you may miss out on opportunities to get involved.
A final note: In general, I invite questions about AUS Finances. I am aware that even though the information is public–our financial statements and budget are on this website, as well as all Council proceedings–it may not be easily accessible to everyone. This is something I am working on. Our practices are entirely transparent; that is, if you ask me a question about our finances, you will get an honest and thorough answer. I want to keep you informed, and I enjoy the opportunity to share the work that I do with the AUS (I am at the office close to 40 hours each week so come by and see me!).
Sincerely,
Sam.
