AUS to Claim $100,000 in Frozen Assets
09 Dec, 2012
The Quebec government will be releasing about $100,000 of frozen assets of the Arts Undergraduate Society (AUS) over the winter break. This Christmas miracle is a refreshing change after the numerous problems with AUS finances in the past.
This raises the obvious question: why were the assets frozen in the first place? In an interview with The Bull & Bear, AUS VP Finance Saad Qazi and President Devon LaBuik said that they are “still in the process of putting the pieces together.” Qazi noted that the AUS had not submitted their mandatory audits to McGill (as per the MOA signed between AUS and McGill) or filed their taxes since 2008. As a result, in 2010-11, McGill withheld $80,000 in student fees. Moreover, the Quebec government froze the $16,000 in the AUS’ chequing account. Feeling the severe shortage of available monetary resources, the AUS dipped into their savings account.
Their savings account had $135,000 in 2003 as a result of a one-time payment from McGill to AUS in exchange for the current Subway restaurant area in the Arts Building. Over the next few years, the AUS used this fund for operational expenses and reduced it to $90,000 by the 2010-11 school year. Since AUS failed to submit their audits, McGill only gave them half of the usual AUS student fees collected by the University. Thus, in 2011-12, when the AUS Executives needed more funds, they cashed the entire amount. However, in “an unexpected move,” the Quebec government immediately seized $84,000 because of the AUS’ delinquency.
Taking charge of this sensitive situation, Qazi spent this summer with accountants from LMKCA back-filing taxes for AUS that were due since 2008. Qazi confirms that he has successfully filed all the taxes from the previous years up to this quarter. Once the Quebec government has processed these filings and the backlog of taxes has been cleared, the government will release $100,000 of frozen assets.
How confident is the AUS that the funds will be reinstated after winter break? LaBuik feels that they have “…covered all [their] bases. However, there could always be something else that [the government] could say.” That being said, LaBuik and Qazi both stressed that they have done everything to the best of their abilities based on the information available to them at the time.
Indeed, this gives rise to another controversial question: Who should be held responsible for this entire mess? The taxes and audits for a specific year are usually the responsibility of the VP Finance from the previous year. How is it that no one since 2008 has bothered to take a look at the AUS books? Qazi finds, “putting the blame on any one person… is nearly impossible and won’t achieve any purpose, since the problems are continuous and the executives are elected for discrete terms.”
According to LaBuik, the political atmosphere on campus last year prevented the AUS from focusing on resolving these issues. Qazi, an Honours Economics and Finance student, “finds managing finances absolutely interesting.” But how do we, the rest of the student body at McGill, especially students who pay student fees to the AUS, be rest assured that future VP Finances will be as accountable?
LaBuik and Qazi both mentioned that they are working on restructuring the AUS finances and constitution. They agree that the VP Finance should have accounting knowledge. Thus, they are planning to formulate a qualification guideline for future VP Finances as, “a step towards making sure this doesn’t happen again.” Moreover, in an effort to streamline all the finances, Qazi has now extended the accounting system used by the AUS to their largest departments.
Around the same time as this “financial crisis,” the AUS student fee was raised from $5 to $12 a semester. When asked if this was done in an attempt to combat the shortage of funds, LaBuik responded that the fee was raised to increase the minimum allocation for each department. After assuming office, Qazi has now successfully fulfilled all financial reporting obligations to McGill and has managed to reclaim over $80,000 of student fees that were withheld since fall 2012.
These new funds were used to pay off operational expenses from previous years. The $100,000 to be released by the Quebec government will go back to the savings account and Qazi aims to bring the savings back to its original level.
Moreover, since the entire accounting system is now based on their accountant’s servers, LMKCA can now track AUS’ financial transactions in “real time.” Despite the numerous safety mechanisms, what if the new VP Finance does not know the AUS finances as well as Qazi does now? He says, “I’ve already started my exit report so that the next VP Finance is definitely going to be a 100% informed.”