There has been quite a lot of discussion around the Carleton University Students’ Association’s (CUSA) 2012-13 audits and the enormous deficit the audits revealed.
Audits and budgets and deficits are confusing.
Each summer, CUSA presents an operating budget—a guideline for what it plans to spend during the year.
It then undergoes an audit from an accounting firm—an official account of how much they spent and where throughout the year.
In late November/early December, CUSA receives these audits and the vice-president (finance) presents them to CUSA council.
Folarin Odunayo, the current CUSA president who was vice-president (finance) in 2013-14—when the 2012-13 audits were released to CUSA—did not present them to council. He said it was an “oversight and an error” on his part. He made a mistake but has since apologized.
His critics wasted no time in pointing out that these audits revealed a $706,000 deficit.
But the confusion—and misplaced outrage—comes from a misunderstanding of accounting. CUSA took a non-cash loss of $488,000 when they combined CUSA Inc. and Havens Inc. in the 2012-13 year.
They didn’t actually lose or overspend $488,000 in “cash.” They simply had to account for combining these businesses on the balance sheet. Something an audit reveals, but an operating budget doesn’t.
Before passing judgement, students and student groups should grasp what non-cash losses and cash losses are.
