MSU Releases Audited Financial Statements

October 10, 2012 at 17:01 pm


From the Office of the Vice President (Finance):

     In September, the McMaster Students Union (MSU) received its audited financial statements for the 2011/2012 fiscal year.  Performed by KPMG LLP, the audited statements of the MSU were presented to the Student Representative Assembly (SRA) and subsequently made public. 

     By performing an annual independent and impartial audit, the MSU is able to maintain a high level of accountability for our financial actions during the fiscal year, as well as present an accurate, transparent document for public release. I am pleased to report on several positive trends that were indentified in the MSU’s audited statements. 

     But first, I’d like to present some historical context.  For several years the MSU saw expenditures increase more rapidly than revenues. That trend led to a deficit of $958,190 in the fiscal year of 2009/2010. That deficit was a result of several things, the largest single contributing factor being the $678,192 deficit accumulated by the MSU-operated insurance plans. Thankfully, due to deliberate expense reductions and the approval of a new dental plan fee by referendum, the MSU put itself on a positive financial trajectory.

View a brief of the MSU's audited statements here

     Two years later the MSU is in a much healthier financial state.  We’ve realized modest surpluses in all fund categories, including a surplus of over $500,000 in our operating fund, with a net surplus of $937,102 in 2011/2012.  It is important to note the distinction between the operating fund and the total net surplus.  The total net surplus takes into account all aspects of the MSU, including specific and independent fees that outline the monies collected  from students as premiums for the health and dental plans, as well as CFMU 93.3FM - the MSU-operated campus radio station - and the Marmor yearbook to name a few.  Conversely, the operating fund is the pool of monies from which the MSU operates the majority of our 30+ student services and is derived from the collection of student fees ($120.92 per FT student), as well as the profit generated by the business units.  Therefore, it must be noted that nearly half of the total net surplus realized in 2011/2012 is accounted for by a fee protocol tied to a specific service (mainly the health and dental plans), and is therefore not ‘profit’ in the traditional sense of the word. Rather, each of the relevant funds grew slightly. That being said, the operating fund surplus of 2011/2012 totalling $538,523.00 can be viewed as the real ‘profit’ generated by the MSU.  As a not-for-profit organization, this is a rarity for the MSU and certainly not typical, nor a year-to-year goal.  Having recently incurred large deficits, the 2011/2012 surplus will balance the books and likely remain an anomaly.    

     How and why did the MSU run such a large surplus? Expenses have been carefully monitored and continue to fall thanks to the diligence of staff across the board. In addition, revenues from our business units (TwelvEighty, Union Market and Underground Media + Design) are on the rise.  We made changes to the health insurance plan that have resulted in increased coverage at a reduced cost, which saved money and created the potential for savings in future years as well.  Our businesses are continuing to expand and several of our long-term financial commitments retire this year. Therefore, we are cautiously optimistic about the 2012/2013 fiscal year, in which we are currently operating.

     At the same time as we recognize these successes, it is important to make note of opportunities for improvement.  We must continually evaluate the level of service that the MSU provides and always strive to make improvements.  Our primary concern is - and always should be - providing services to students. To that end, the MSU has improved upon several of its service offerings recently, including the expansion of the Mac Farmstand by two whole months. Additionally, the MSU Night Market, organized under the Diversity Services portfolio, is another welcome enhancement to student life.  Moreover, campus has recently seen an increase in the hours of operation of the Student Walk Home Attendant Team (SWHAT), as well as increased funding directly to MSU Clubs by more than $10,000. The MSU Clubs Department currently has more than 300 status clubs, inside one of the best funded systems in the province.

Read the full Audited Statements of the MSU here.

     During the auditing process, our accounting practices are examined and issues and/or deficiencies are identified in order to make sure we have the opportunity to respond before they turn into serious problems. This year I’m proud to report that no significant internal control deficiencies were reported. KPMG identified a few small issues that we should correct in order to be more effective. One such issue is the lack of an investment policy.  Currently, the MSU reviews its investment parameters annually with the organization’s investment advisors to ensure appropriate risk tolerance and investment objectives. I will be working on formulating this approach into an organizational policy and further detailing the proper treatment of reserve funds. Addressing this lack of policy is something that will be undertaken this year and I expect to bring it to the SRA in the next few months.

     I look forward to continuing in the positive direction with the help and support of every member of the organization.  After a successful year like 2011/2012, we are making plans to implement financial policies that will prevent multi-year losses and mitigate the impacts of future deficits.  Additionally, we are looking at systems to more closely monitor spending and we are constantly striving to improve sales and service delivery to students. Expect great service, continued improvements to operations and a strong financial year from your MSU in 2012/2013!


Jeff Wyngaarden
Vice President (Finance)
905-525-9140 ext. 24109

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