The membership of the University of Toronto Graduate Students’ Union (GSU) failed to pass the organization’s 2017–2018 audited financial statements at the Annual General Meeting (AGM) on December 3 due to a lack of quorum. According to the union’s finance commissioner, this puts the union at risk of defaulting to the university.

At the meeting, some GSU members complained that a draft report of the financial statements from the 2017–2018 fiscal year was not made available in their AGM packages, despite having to vote on the item. A portion of the meeting was spent debating how to logistically distribute the financial documents given the short notice.

Members were concerned over the failure to provide the financial statements in the agenda package. Members were supposed to receive the financial statements at least 13 days before the AGM.

Several members left the meeting out of frustration, though they suggested a future date for another general meeting.

After members left the room, the AGM lost quorum and the meeting was adjourned. A previously-scheduled General Council meeting was held immediately afterward.

During the General Council meeting, discussion followed on how to address the failure of the AGM to pass the 2017–2018 audited financial statements.

Finance Commissioner Branden Rizzuto claimed that the UTGSU would financially default to the university if the membership did not pass their audited financial statements for the past year.

During the General Council meeting, Rizzuto pointed out that The Varsity’s reporters were live-tweeting that meeting and had live-tweeted the events of the AGM.

The Varsity’s reporters were allowed to be present at the AGM on the condition that they neither take photographs nor live-tweet the events. Under direction from The Varsity’s editors, the reporters purposefully ignored the condition to not live-tweet the events of the AGM.

Conditional seating is an unusual request at student union meetings, and this is the first time that Varsity reporters have been faced with conditions to their presence at a student governance meeting in recent years.

There was no vote or objection to keep the reporters in the room or to allow them to continue their work.

Since The Varsity’s reporters were asked to leave the General Council meeting, it is unknown whether the audited financial statements were passed at that meeting.

Afterward, the UTGSU executive emailed The Varsity to say that “The UTGSU General Council/Board-of-Directors unanimously accepted the Draft 2017-2018 Financial Audit at the General Council/Board-of-Directors meeting on December 3, 2018.”

“The UTGSU Executive Committee has been in communication with the University of Toronto Office of the Vice-Provost (Students) and they have indicated and confirmed that the UTGSU is in good financial standing with the University of Toronto,” wrote the executives.

“A motion to appoint a financial auditor for the 2018-2019 Fiscal Year will be presented at a future meeting of the General Membership. The UTGSU is not incorporated under the Ontario Not-For-Profit Corporations Act (ONCA) and is therefore not at risk of violating the Act.”

Editor’s Note (January 14, 2019, 5:32 pm): This article has been updated with the full comment from the UTGSU that The Varsity received on December 6, 2018. 

The University of Toronto released their proposed budget for the upcoming 2018–2019 fiscal year, which featured increased funding in financial aid, research opportunities, and graduate programs. The budget reports a total budgeted operating revenue of $2.676 billion, 8.2 per cent higher than the 2017–2018 budget.

Expenses in the proposed budget include large-scale building projects on all three campuses, including an increase in spending toward the total deferred maintenance liability, an increase in student aid, and grants and diversity initiatives.

$224 million is budgeted toward student aid for the 2018–2019 fiscal year. This figure is expected to grow to $260 million over five years. The increase in spending on financial aid can be attributed to the university’s policy on student financial support. The statement principle outlines that, “No student offered admission to a program at the University of Toronto should be unable to enter or complete the program due to lack of financial means”.

The proposed budget also aims to fund diversity and equity initiatives. A total of $3 million over a course of three years will be allocated to coordinate access programs for students from underrepresented groups on campus. Similarly, $3 million over a course of three years will be set aside to fund postdoctoral fellowships for individuals from underrepresented groups. In turn, this will diversify the amount of minority scholars across the country.

Deferred maintenance has been a critical issue, costing the university $549 million in liabilities this year. Of that $549 million cost, UTSG accounts for $478 million with an increase of $4 million compared to last year. UTSC and UTM campuses saw decreases of $2 million and $4 million, respectively. $18 million has been allotted for deferred maintenance repairs, specifically at the St. George campus, while $2.5 million are set aside for the UTM and UTSC campus in their respective budgets.

OSAP                                                                                                          

Changes in the Ontario Student Assistance Program (OSAP) were also included in the report. The program was changed to include free tuition for students from low and middle-income families, 30 per cent off tuition grants, and opportunity-based grants for students to reduce loan debt. 55 per cent of U of T students receive OSAP payments.

Funding for the University of Toronto Advanced Planning for Students program (UTAPS) is also projected to increase by an additional $13 million over the planning period. UTAPS gives grants to OSAP eligible students based on financial need.

Revenues

Much of the university’s operating revenue is obtained through provincial operating grants, tuition, and various student fees. Tuition and grant revenue for 2018–2019 is projected to be $2.336 billion, a 2.5 per cent increase compared to the $2.279 billion projected last year. Similarly, large endowments from the university’s greater community have also contributed over $2.38 billion to the operating revenue.

This year, a maximum three per cent increase will be added to tuition for Arts & Science students. Tuition fees for graduate and professional program students may also be increased by a maximum of five per cent. The university has also proposed to align tuition fees for international PhD students with the domestic rate.

The university recently signed a new Strategic Mandate Agreement (SMA2) with the province of Ontario. The agreement aims to re-establish the university’s leadership role in research and innovation in Ontario. SMA2 aims to include funding for 631 new master’s student spaces and 198 new doctoral student spaces by fall 2019.

Governing Council will vote on the $2.68 billion proposed operating budget for the 2018–2019 fiscal year on April 5

Over the past few years, stories of financial mismanagement within student societies at U of T have regularly appeared in the pages of The Varsity. For example, it is suspected that money was stolen from the Victoria University Students’ Administrative Council (VUSAC) office twice in two years, and money was recently believed to have been stolen from a locker rented by the Undergraduate Earth Sciences Association. Alongside these alleged thefts, there have been concerns over potential misspending and discrepancies in financial disclosures by the Cinema Studies Student Union, as well as ongoing concerns regarding the St. Michael’s College Student Union (SMCSU).

Student societies are not treating finances with sufficient professionalism. Much attention is often understandably focused on the most egregious allegations; stories about hidden bank accounts and lawsuits over $277,000 in alleged fraud are exciting, while petty theft of $500 is not. However, the repercussions of ignoring more minor issues of mismanagement are just as pressing as those stemming from higher-profile stories.

During our tenure on VUSAC in the 2016–2017 academic year, we investigated the theft of revenue from the Code Red semi-formal event, and we implemented financial management policies in response. We believe that theft and mismanagement can be countered through strong policies and professional culture, both of which are often lacking in student groups.

The recent suspected theft from the Victoria College Drama Society (VCDS) from within the VUSAC office is similar to last year’s theft of ticket revenue from Code Red. VCDS is its own autonomous group at Vic, and thus it is not bound by VUSAC’s new policies. However, the repetitiveness and similarity of these occurrences, both at VUSAC and elsewhere, have led us to believe that there are root causes of financial malpractice across all student societies, with solutions that are equally applicable across campus.

After investigating the Code Red scandal, in which roughly $500 in ticket sales went missing, we concluded that there were two central problems with money management at VUSAC. First, the fact that money was stolen so easily from a cash box demonstrated fundamental flaws regarding how money was stored after events. Second, poor record-keeping resulted in our inability to identify exactly how much cash should have been on hand given the number of tickets sold.

To ensure money was handled more responsibly, we put together a policy document mandating that the member of council in charge of any given event be responsible for the storage and security of cash revenue generated, and we laid out a step-by-step process for how to secure cash generated through in-person sales. We also put together record-keeping guidelines for ticket sales in order to ensure accountability and accuracy if theft does occur.

The lessons we learned at VUSAC last year have broad applicability, even beyond issues of petty theft. In 2017, the University College Literary & Athletic Society (UCLit) was faced with a budget shortfall after unpaid expenses from their orientation week were discovered. UCLit dealt with the outstanding expenses via a contingency fund designed for precisely that kind of financial misstep. Better record-keeping may have prevented these expenses from being unpaid in the first place, and, at minimum, could have allowed for the people involved to recognize their mistake earlier.

The UC Orientation Co-Chairs took responsibility for their actions and should be commended for their accountability. Despite the numerous precautions that can prevent deliberate malfeasance, mistakes will inevitably occur, and it is thus important for those involved to be accountable and transparent when mistakes happen.

Unfortunately, not everyone is as prepared as UCLit appeared to be. From our time at VUSAC, we learned that even well-intentioned people can make mistakes. With so many moving parts of a large organization, it took a few weeks for us to find out about the theft and investigate. We also found that the budgeting process was inflexible to unexpected changes from individual components within the budget, resulting in little room to manoeuvre when reconciling the budget projections with the financial realities.

This is not, however, to suggest budgeting processes should be looser. Rather, constraints on the ability of students to reallocate money are essential, as they ensure financial transparency throughout the budgeting process. Student leaders at other societies should expect these limitations, and they should plan for the eventuality of financial complications.

Moving beyond policy, student societies faced with financial mismanagement also require a culture shift to actually achieve the operational changes we have highlighted. Ideally, a more engaged student population can hold its leaders accountable. The reality, however, is that students lead busy lives and often do not have the time to pore over budgets and policies. In absence of more extensive student involvement, it is incumbent on student leaders to create an institutional culture that promotes financial accountability and best practices.

Enforcement of student society policies remains weak, and student leaders face few — if any — repercussions for breaching them. But firmly establishing operating policies can have positive effects in terms of institutional culture and allow future generations of students to learn best practices and establish norms that carry over year to year.

Losing or misplacing student funds should always be taken seriously. If mismanagement escalates, the repercussions may range well beyond the financial. Student societies that continue to engage in financial malpractice may see a loss in their independence. One need only look as far as SMCSU to see the result of continued malfeasance: the requirement of co-signing authority of administration on all financial decisions over $500. If student societies hope to retain their independence, it is essential that they keep their financial houses in order.

Peter Huycke is a graduate student in the School of Public Policy and Governance. He graduated from Victoria College in 2017 and served as VUSAC’s interim Finance Chair from January 2017 to the end of the 2016–2017 academic year.

Stephen Warner is a graduate student in the Department of Political Science. He graduated from Victoria College in 2017 and served as Vice-President External of VUSAC during the 2016–2017 academic year.

The University of Toronto’s debt sits at a cool $1 billion dollars as of August 31, 2016, according to the status report on debt presented to the Business Board on September 22.

The $1 billion debt has remained a constant figure in the university’s financial record since June 2014, when the outstanding debt initially surpassed $1 billion. The total amount of debt has fluctuated only marginally since then, sitting at $1.012 billion in July 2015. The actual outstanding debt for the University now totals $1.023 billion, an $11 million increase from the 2015 figures.

The university allocates a debt limit of 5 per cent of the University’s annual expenditures. The status report shows that the actual outstanding debt currently sits at 3.5 per cent of expenditures, well within the Business Board’s $1.5 billion limitation for the 2016–2017 year.

Of that 3.5 per cent, 1.2 per cent comes from internal loans. This includes the university’s pension debt — $121 million — which totals 0.4 per cent of the internal loans. The remaining 2.3 per cent stems from external debts, due to institutions outside of the university.

Of the university’s external debt, $715.8 million is tied up in external debentures, which are unsecured loans without the backing of assets. This is a slight decrease from the $717.6 million outlined in the February 2016 status report on debt.

The report notes that net allocations, borrowing that is approved by the Business Board, stood at $1.2 billion up to August 31, with $220.1 million available for future allocation. This amount includes an allocation change of $1.9 million.

The university’s financial report and report on debt were presented to Governing Council’s Business Board last month, revealing decreased income and endowment figures.

Net income for the university fell 26.8 per cent to $210.6 million and the university reported almost $2.10 billion in endowments, which is a 2.1 per cent decrease from the over $2.14 billion that was reported last year. U of T’s pension plan’s deficit increased from $617.4 million in 2015 to $797.4 million in 2016. The university attributes this increase to investment returns on pension plan assets falling below expectations.

Demand from students to study at U of T remains high, with student enrollment increasing by 3.51 percent from 2015 to 77,130 students in 2016. Revenues from student fees reached $1.292 billion.

With the rise in student population, the limits of the university’s infrastructure have been pushed. Repairs and maintenance costs went up 16.3 per cent while materials and supplies costs increased by 6.9 per cent from a year ago.

The university also spent a substantial amount on its investment in the MaRS Phase 2 project. In September 2015, the University of Toronto partnered up with the Government of Ontario, MaRS and Johnson & Johnson, a consumer packaged goods manufacturer, to establish JLAB, a business incubator that is designed to accommodate up to 50 bio-medical start-ups. The 40,000 square foot facility will occupy a floor of the MaRS West Tower and will compose 75% of laboratories and digital equipment while the rest of the space will be dedicated to collaborative work spaces.

The report paints an optimistic view of the financial outlook in 2017 stating that: “Revenues are expected to increase modestly over the next several years as a result of continuing growth at the Scarborough and Mississauga campuses, graduate expansion, and increasing international enrolment.”

According to the status report on debt, U of T’s total debt for the year came to $992.5 million. Much of it consisted of future obligations to bond payers. As well, the university’s credit ratings are Aa2 (Moody’s), AA+ (Standard & Poor’s) and AA (Dominion Bond Services), which ranks the university as a strong investment-grade credit; two credit rating agencies rated the university above the province of Ontario.