If you don't read the Sil, this is the week to actually pick one up.

PST was collected but not paid for the MSU health plan for six and a half years. It was only uncovered recently due to an audit.

The article leaves me with a lot of questions. I know that a number of the people quoted and named in the article post on here regularly (as well as the author himself) so I figured this would be a good place to go.

1) I think I'm a little unclear on the net loss to the MSU. Is $50K correct?

2) VP Finance mentioned in his article that the MSU used the unpaid taxes as a surplus. How has this factored into past financial reports that we have received from the MSU?

3) Who knew about this first? Was it the business manager? Why are we only learning about this now?

4) and most importantly, who's fault is this? How is it possible that PST payments can be missed for a single year, let alone six and a half?

I know some of these are big questions, but all I have to go on is two articles from the Sil so any information at all is appreciated. Thanks

Sam Dick
ENGIII

1) I think I'm a little unclear on the net loss to the MSU. Is $50K correct?

The actual figure is unknown, but $50,000 is a very good estimate. The growth of the money in surplus was estimated at around 4% so the government charged the MSU 8% interest.

2) VP Finance mentioned in his article that the MSU used the unpaid taxes as a surplus. How has this factored into past financial reports that we have received from the MSU?

Since the taxes were never remitted, on the financial statements they were never listed as having been paid out. This means that every set of statements in the past 6 years has had excess revenue from the Health plan.

3) Who knew about this first? Was it the business manager? Why are we only learning about this now?

From my understanding, the business manager and the Board of Directors were aware of this in Summer. They only informed the Executive Board (which manages the day-to-day operations of the MSU) 2 weeks ago, and the SRA last Sunday. The reasons for the delay in disclosure is something that has yet to be addressed, and is something the SRA and the Silhouette have made a priority to clarify.

4) Who's fault is this? How is it possible that PST payments can be missed for a single year, let alone six and a half?

A lot of peoples' faults. Accounting department, Business Manager, Auditors etc. Pretty much, a lot of negligence. However unpaid PST payments are not atypical in businesses of this size. The problem is that the MSU does not have any financial controls in place that would have caught this mistake. The only reason it was found was that the Government audited the MSU when the MSU requested a PST refund that was incorrectly paid on the Marmor.

With all things said..
The financial statements for the MSU's 09/10 fiscal year will look terrible, but the general financial outlook is not much worse. As you said, the MSU has lost about $50,000 in interest and penalties, which isn't destructive considering the $3 million sitting in reserve.

The thing is, the MSU needs to fix itself and make sure that these things never happen again. We need strategies in place to make sure that proper checks and balances are in effect, and we need contingency planning so that the students aren't finding out a few months after the money was paid out.

With proper strategic planning, and reflective budgets, the MSU's fiscal responsibility will inherently increase, and problems like these will not happen again.

I do think these are the kind of questions you should probably go to the MSU office and ask the VP Finance or general manager John McGowen. I am the Finance Commissioner of the MSU and heard about it in the executive board meeting so I could answer some of these but if you want a 100% correct answer and hear both sides of the story (and not just the Sil) you should go talk to those two listed above.

But what Rohan said is very accurate

I agree with Boccaccio. To Humanities students: if you do not have the time to ask these questions in person, please drop me an email at [email protected] and I will do all I can to find the answers for you.
I also agree with Rohan that there is plenty of blame to go around.