The annual report on SSMU’s audited financial statements was released at Council last Wednesday, revealing the Student Society’s financial figures for fiscal year (FY) 2009-2010.
SSMU President Zach Newburgh explained that “the audit is done annually, and it is required as per our Memorandum of Agreement with the University in order to ensure that our finances are responsible.”
The audit found SSMU in the black by $598,485 for the year, up from $163,169 in FY2008-09. Along with over $4.5 million in excesses from previous years, SSMU has been left with a significant amount of additional revenue for FY2010-11.
The report was presented by Luciena Ierfino, a chartered accountant from accounting firm RSM Richter Chamberland LLP, and revealed that the society ended FY2009-10 with accumulated fund balance of $5.38 million.
SSMU’s total revenues for that fiscal year amounted to almost seven million dollars – increasing by over $110,000 from FY2008-09 – and their total expenses amounted to almost $6.5 million, a decrease of over $300,000.
“It was a clean audit report,” said Ierfino during Council. “We didn’t find any material errors.”
She said that the RSM team performed tests on a sample of transactions, from which she and her team were able to draw “reasonable and fair” conclusions.
One significant feature of SSMU’s fiscal turnaround had been Gerts. The student-run bar moved from a deficit of $13,137 in FY2008-09, to a surplus of $15,201 in FY2009-10.
“Gerts has contributed lots of revenue,” said Ierfino, and SSMU VP Finance and Operations Nick Drew added that the bar’s sales are up even more this year.
The report revealed that SSMU saves money through various breaks in utility payments for the Shatner building.
According to the report, SSMU “obtains [Shatner] building electricity and heat free of charge from a contributor.” The utility expense was estimated at $477,333 for FY2009-10.
“The [SSMU] is not responsible for utilities,” said Newburgh. “That is covered by the University.”
Drew corroborated this statement, writing in an email to The Daily that, “Our current lease does not require us to pay utilities. [However] this will surely change when the lease gets signed this year.”
Newburgh also said that “the University has been attempting to get the [SSMU] to cover that particular cost.”
SSMU’s lease for Shatner from the University – set to expire May 31 – was a significant expense for the Society last year. The five-year deal aggregates out to approximately $540,000, with the minimal annual payment hovering around $108,000.
“The Students’ Society essentially…covers everything else [besides utilities] having to do with the [Shatner] building. So janitorial staff, cleaning – that in particular is in tandem with rent that we pay to the University of about $110,000. Those are the costs associated with the building currently, and the terms outlined in our lease agreement,” said Newburgh.
The financial report referenced multiple SSMU “lease agreements,” and Newburgh noted that there are “other lease agreement[s] that we have, not just with the University. We have one with the owner of the space which once housed Haven Books. … That’s going to be over.”
SSMU closed Haven Books due to massive financial losses last spring, but, according to Drew, received a healthy pay-out in return.
“SSMU was bought out of their share of the bookstore profits and was awarded a hefty sum of $1.875 million. Instead of having it sit in a low-interest-bearing account, Council approved a low-risk (we joke around and call it a Grandmother fund) investment portfolio,” wrote Drew.
Indeed, investments were also seen to be a significant expense in the financial report for FY2009-10.
“The SSMU did purchase about $50,000 worth more [in investments] this year,” said Drew.
“The market is bouncing back from the recession. So that would be one of the reasons why our investment portfolio is stronger,” added Newburgh.
Along with these increased revenues, free utilities, and conservative expenses, SSMU has received aid from higher than anticipated student enrolment. The financial report discloses that, in FY2009-10, SSMU had budgeted for this year’s student fee revenue totalling $1,435,053. By the end of the year, however, SSMU had received almost $23,000 more than expected.
“The VP Finance and Operations estimates the amount of students that there will be [when drafting the budget]. … Generally the trend has been that there are more, and since there are therefore more students who are paying the fee of the [SSMU], you will see it reflected in the actual budget, in the actual [revenue],” said Newburgh.
Newburgh said that the fiscal breathing room now afforded to SSMU will have a significant impact on their financial goals for the rest of they year, and could see them shell out more for student events and activities like this fall’s Homecoming. Newburgh also mentioned a possible St. Patrick’s Day event; a three-day SSMUfest music festival, proposed by VP Internal Tom Fabian; and events to raise awareness about potential tuition increases, proposed by VP External Myriam Zaidi.
“Events are normally the easiest way, or the most captivating way for students to get involved, ranging from social, to political, to leadership development-oriented. It’s really everything,” said Newburgh.
“Ultimately, we’re a not-for-profit organization, so there are certain regulations attached to that,” said Newburgh. “We’re not supposed to run a surplus. So we’re supposed to spend as much as we can.”