Matt Essert

After years of incomplete financial statements from the Arts Undergraduate Society, the McGill administration has informed the group it will not release the student fees collected for them this semester until the required documentation is submitted. Although the university was scheduled to release the cheque by today, as of last night the situation was at an impasse, with the AUS unable to provide the requested documentation and the Deputy Provost (Student Life and Learning) Morton Mendelson’s office unwilling to renegotiate the matter.

The fees, which are collected from all Arts students by the university on standard e-bills, make up the bulk of the AUS’s operating funds. Receipt of these funds each semester, however, as stipulated in the AUS and McGill’s Memorandum of Agreement, is contingent on the AUS’ submission of a full financial audit, which has not happened in the three fiscal years since 2007. While the AUS has submitted documentation for the first two years, it has not for 2009-2010

“We haven’t gotten the information, we haven’t gotten the financials, and the auditor of the university is telling us it’s inappropriate for us to be handing out the money to a group that hasn’t fulfilled their responsibility,” Mendelson said.

According to AUS President David Marshall, each semester since the group first failed to submit an audit, the president of the AUS or their auditor sent a letter to the deputy provost’s office explaining that an audit would soon be forthcoming and the administration released the fees. This semester, however, the administration has informed Marshall it will not release the fees until certain financial documentation from the 2009-2010 fiscal year is submitted.

“We had a written agreement from the previous president and VP Finance of the AUS agreeing to provide the information we were missing. That didn’t work. We had another commitment by the AUS this year, which is why we released the Fall cheque,” said Mendelson. “There are just so many times this can happen … once bitten, twice shy.”

Marshall said that despite his best efforts, those of the rest of the executive, and those of the group’s new accounting firm RSMRichter, the AUS does not have enough documentation to meet the university’s deadline. Although RSMRichter submitted a letter to the administration on December 21, 2010, explaining the situation and assuring them that the AUS’s newly implemented financial practices would allow them to complete full audits from this point forward, Marshall received a letter from Mendelson on January 21 explaining that without the requested information, they would still not be able to release the AUS’s cheque this semester.

“There was nothing in our history that would have suggested that this year, of all years, when we’re trying to rectify not only the immediate financial issues but all of the historical reasons behind the issues we’ve had, the university should come around and say ‘OK, we’re going to cut you off,'” Marshall said.

Without these funds, Marshall said the AUS will have to make some drastic cuts to the services it provides. The first affected, he said, would likely be the Arts Student Employment Fund, which contributes to the salaries of student researchers. Events like Bar des Arts would also lose funds. In addition, Marshall expressed concern about being able to pay for the services of RSMRichter, the accounting firm that has been working with the group since the Fall to help them set up sound business practices.

Since they are volunteer-run, services like peer tutoring and the essay centre will continue normal operations. The Arts Computer Labs will be unaffected, because they are administered by a separate fund. Marshall is confident that the Society’s St.Patrick’s Day events and Red and White Ball will happen, but he said that the executives have already begun putting some AUS expenses on their personal credit cards in anticipation of being repaid later.

Mendelson also said the AUS is not the first undergraduate society to have issues with its audits.

“We’ve had certain problems with other associations where the proper records aren’t kept. There isn’t the responsible accounting that I assume students want and certainly that students deserve,” he said.

Management Undergraduate Society President Céline Junke said the MUS had submitted documents late before. According to Engineering Students’ Society President Daniel Keresteci, his organization faced a similar situation a few years ago, when they hadn’t filed their audits for a number of years. Now, however, the group has sound accounting practices in place, he said.

“McGill hounds us for our audit, but they know the relationship we have where we use the same firm every year,” Keresetci said. “So we just tell them that we’re waiting from our auditing firm and they’re like “OK” and when it comes in I sign it and we send it over to McGill for approval.”

Mendelson added that discussions with the AUS are ongoing.

“Right now we’re in a conversation with the AUS trying to find out what kind of information they can indeed supply, and we’re waiting to hear from them,” he said.

According to Marshall, it is not yet clear what will happen to the funds if they are not released to the AUS on Tuesday. He is hopeful, however, that the administration will be willing to negotiate.

Additional reporting by Matt Essert.