The Carleton University Students’ Association (CUSA) executive curtailed debate on a motion that highlights the organization’s over $700,000 deficit from the 2012-2013 financial statements in a Nov. 12 council meeting.
The motion, aimed at ensuring financial accountability and longevity, was ruled out of order. On Nov. 12 at 6:36 p.m., less than an hour before the CUSA council meeting, CUSA President and former CUSA Vice-President Finance Folarin Odunayo called a CUSA Inc. meeting for Dec. 3 via e-mail to discuss the 2012-2013 financial statements. This was cited by Odunayo as the justification for ruling the motion out of order.
The deficit is estimated to be $706,773, a significant amount considering CUSA’s budget this year is approximately $2,274,053. Such a deficit is unprecedented in CUSA’s history. The deficit has only come to light since the Feb. 3, 2014 audit was made public in September.
The motion, entitled “Motion to Ensure Financial Accountability and Longevity of the Association,” outlines a brief timeline regarding CUSA’s financial standing and the executive’s reporting history. It sought to address the failure of the executive to report the deficit as required by CUSA’s corporate bylaws.
The motion details how over the past year the association’s legally-mandated reporting procedures were ignored.
“Out of incompetence or a deliberate effort to hide the massive deficit, CUSA’s executive, run by the “A Better Carleton” slate, misrepresented the organization’s financial standing, both in last year’s budget presentation and through its failure to present the audit to the board last year, as mandated,” Faculty of Arts and Social Sciences (FASS) Councillor Adam Carroll explained to the Leveller. “This is why I decided to move the motion–to facilitate reporting and discussion on the deficit.”
The motion reads, “whereas CUSA Inc. bylaws, under section 18, mandate the presentation of the financial audit to its members at the annual general meeting. Whereas the executive did not present the financial audit for the 2012-2013 year at the CUSA Inc. meeting in May, as required.”
Pursuant to clause 97(3) of the Corporations Act of Ontario, the audited financial statements need to be approved by the “shareholders,” or “membership.” CUSA’s councillors act as the membership during any CUSA Inc. general meeting.
At a recent financial review committee on Nov. 6, Odunayo admitted that these procedures were not followed.
The topic of the budget is particularly contentious due to financial discrepancies discovered between the financial statements and CUSA’s official statment on the budget. In a presentation delivered at the July 2013 CUSA council meeting, then-Vice President Finance Odunayo asserted that CUSA registered a $124,138 surplus for the 2012-2013 fiscal year and the A Better Carleton (ABC) executive slate’s first year in office. The council adopted the budget for the 2013-2014 year at the same meeting.
However, after pressure from council members, the CUSA executive finally made public the 2012-2013 financial audit in Sept. 2014 via CUSA’s website.
Instead of matching the reported $124,138 surplus, the audit registered a $706,773 deficit. Financial statements indicate that ABC inherited a $133,349 surplus from the outgoing 2011-2012 executive.
Pursuant to clause 302 of the Corporations Act of Ontario, “A corporation shall cause to be kept proper books of account and accounting records with respect to all financial and other transactions of the corporation.” Given that the budget misrepresented the corporation’s financial records, this discrepancy amounts to gross financial mismanagement at best, and a breach of the CUSA officers’ fiduciary responsibility in any case.
According to point 13 of the corporation’s bylaws, the finance commissioner (at that time, VP Finance Odunayo) is primarily responsible for fulfilling these duties. The president, according to point 11, is responsible for the “general management and supervision of the affairs and operations of the Corporation.”
“This is an $800,000 plus discrepancy that could deeply threaten the stability of CUSA as an organization,” said Carroll. “And to make matters worse, it appears the executive actively tried to hide the deficit from council and its members.”
The motion calls for a formal presentation of the 2012-2013 financial audit to the CUSA Council, which would include a question and answer period. The motion also calls for a presentation of the 2013-2014 financial audit, which should have been available by the end of October if CUSA filed its audit in accordance with the regular deadlines outlined in the Corporations Act of Ontario.
“There was no debate or discussion about necessary financial procedures and transparency – and the motion was wiped completely off the agenda,” claimed Carroll. “Students and council members were denied the opportunity to discuss and debate the motion.”
“It was a bittersweet meeting. I think calling my motion out of order shows a lack of transparency, and perhaps more worrying, a lack of will to honestly admit past mistakes,” Carroll continued. “However, I appreciate that President Odunayo has finally called a meeting to review the audit from two years ago.”
“When I spoke with him two days before the council meeting, he stubbornly refused to call a meeting to discuss the 2012-2013 financial statements,” Carroll told the Leveller. “I’m glad the motion has seemingly pushed him in the right direction.”
Odunayo could not be reached for comment at the time of publication.
This article first appeared in the Leveller, Vol. 7, No. 3 (Nov/Dec 2014).
Motion to Ensure Financial Accountability and Longevity of the Association
Whereas the 2013-2014 annual operating budget entitled, “Building a Better Carleton,” presented to CUSA Council on July 25, 2013 reported a $124,138 budget surplus for the 2012-2013 fiscal year.
Whereas this figure directly contradicts the 2012-2013 Financial Audit, which registers a $706,773 deficit for that year.
Whereas CUSA Inc. bylaws, under section 18, mandate the presentation of the financial audit to its members at the annual general meeting.
Whereas the executive did not present the financial audit for the 2012-2013 year at the CUSA Inc. meeting in May, as required.
Whereas the audit was only made publicly available on September after pressure from Councillors.
Whereas CUSA inherited a surplus of $133,349 from the outgoing 2011-2012 executive for the 2011-2012 fiscal year, according to the 2012-2013 financial audit
Recognizing that this level of deficit is unprecedented in CUSA’s history.
Recognizing that last year’s CUSA council was kept in the dark regarding the financial standing of the Association.
Be it resolved that the CUSA executive give a presentation of the 2012-2013 financial audit at the next regularly scheduled CUSA council meeting.
Be it further resolved that aforementioned presentation be open to questions and answers.
Be it further resolved that the CUSA executive present the 2013-2014 financial audit upon its completion by calling a CUSA Inc. Meeting.