The Students Union, The University of Calgary. Financial Statements June 30, 2014

Transcription

1 The Students Union, The University of Calgary Financial Statements June 30,

2 November 18, Independent Auditor s Report To the Members of The Students Union, The University of Calgary We have audited the accompanying financial statements of The Students Union, The University of Calgary, which comprise of the balance sheet as at June 30,, and the statement of operations and changes in fund balances and statement of cash flows for the year ended June 30,, the related notes, which comprise a summary of significant accounting policies and other explanatory information. Management s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian Accounting Standards for not for profit organizations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. PricewaterhouseCoopers LLP Avenue SW, Suite 3100, Calgary, Alberta, Canada T2P 5L3 T: , F: PwC refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

3 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of The Students Union, The University of Calgary as at June 30, and the results of its operations and its cash flows for the year ended June 30, in accordance with Canadian accounting standards for notfor-profit organizations. Chartered Accountants Calgary, Alberta

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5 Statement of Operations and Changes in Fund Balances For the year ended June 30, Operating Capital Total Total Revenue Operating 12,401,654-12,401,654 11,691,467 Student fees (note 9) 4,577,096-4,577,096 4,643,779 Amortization of deferred contributions (note 6) 1,990, ,898 2,095,977 1,888,029 Interest 114, , ,353 Donations 28,420-28,420 30,976 19,111, ,898 19,217,234 18,357,604 Expenditures Salaries 5,897,112-5,897,112 5,340,842 Cost of providing services 5,056,001-5,056,001 4,940,144 Operating 3,014,868-3,014,868 3,264,045 Student services 2,658,029-2,658,029 2,431,509 Amortization - 702, , ,488 Building operation 374, , ,278 Donations from restricted funds 304, , ,406 Interest - 116, , ,318 17,304, ,889 18,123,577 17,391,030 Excess (deficiency) of revenue over expenditures 1,806,648 (712,991) 1,093, ,574 Fund Balances Beginning of year 6,385,434 8,501,932 14,887,366 13,822,090 Interfund transfers Repayment of long-term debt (1,423,581) 1,423, Capital asset additions (751,715) 751, Interest expense (116,772) 116, (2,292,068) 2,292, Endowment contributions (note 8) 97,092-97,092 98,702 Fund Balances End of year 5,997,106 10,081,009 16,078,115 14,887,366

6 Statement of Cash Flows For the year ended June 30, Cash provided by (used in) Operating activities Excess of revenue over expenditures 1,093, ,574 Items not affecting cash Amortization 702, ,488 Amortization of deferred contributions (2,095,977) (1,888,029) (300,202) (204,967) Change in non-cash operating working capital items 529,966 58, ,764 (146,435) Investing activities Repayment of long-term debt (1,423,581) (201,000) Additions to capital assets (198,041) (488,291) Additions to interest in MacEwan Hall and MacEwan Student Centre (553,674) (214,522) Endowment contributions 97,092 98,702 (2,078,204) (805,111) Financing activities Deferred contributions received 3,527,180 1,784,272 Increase (decrease) in tenant deposits 5,417 (418) 3,532,597 1,783,854 Increase in cash during the year 1,684, ,308 Cash Beginning of year 5,304,465 4,472,157 Cash End of year 6,988,622 5,304,465 Interest paid in the year was 116,771 ( 286,318).

7 Notes to Financial Statements June 30, 1 Authority The Students Union, The University of Calgary (the Students Union ) is a body corporate created pursuant to the Post-Secondary Learning Act of the Province of Alberta, S.A. 2003, and Chapter The Students Union is a not-for-profit organization as defined in the Income Tax Act and therefore is not subject to income tax. The Students Union s mission is to provide for the administration of the affairs of the undergraduate students of The University of Calgary ( The University ). Under its By-laws, the members of the Students Union annually elect The Student Executive Cabinet, which is responsible for, inter alia, managing the affairs of the Students Union consistent with the decisions of The Student s Legislative Council, managing the Students Union s personnel, and preparing the annual budget. The Students Union has an economic relationship with the University of Calgary through the MacEwan Student Centre (note 3) but operates as an independent, autonomous body separate and distinct from The University. 2 Significant accounting policies Basis of accounting The financial statements of the Students Union have been prepared in accordance with Canadian accounting standards for not-for-profit organizations (ASNPO) as issued by the Canadian Accounting Standards Board. Use of estimates The preparation of the financial statements in conformity with ASNPO requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Fund accounting The Operating Fund consists of assets, liabilities, revenue and expenditures related to the Students Union s student government and student and commercial activities. In addition, the Operating Fund reports activities related to endowment funds as well as funds internally restricted by the Students Union. The Capital Fund consists of assets, liabilities, revenue and expenditures related to the Students Union s capital assets and investment in MacEwan Hall and MacEwan Student Centre. (1)

8 Notes to Financial Statements June 30, Revenue recognition The Students Union follows the deferral method of accounting for contributions. Restricted contributions, other than those related to capital assets or interest in MacEwan Hall and MacEwan Student Centre, are recognized as revenue in the year in which the related expenses are incurred in the Operating Fund. Restricted contributions related to capital assets or interest in MacEwan Hall and MacEwan Student Centre, which are reported in the Capital Fund are recognized as revenue as the related capital assets or interest in MacEwan Hall and MacEwan Student Centre are amortized. Unrestricted contributions are recognized as revenue of the appropriate fund in the year received or receivable if the amount can be reasonably estimated and collection is reasonably assured. Endowment contributions which are reported in the Operating Fund are recognized as direct increases in fund balances restricted for endowment purposes in the period in which they are received. Investment income from endowment funds which is restricted for use for library expenses, are initially recorded as deferred revenue then recognized as revenue in the year in which the related library expenses are incurred. Student fees are recognized as revenue over the period for which services are delivered. Operating revenue, consisting of commercial services, is recognized as revenue when products delivered or services sold are substantially provided. Inventories Inventories are valued at the lower of cost and net realizable value. Interest in MacEwan Hall and MacEwan Student Centre The Students Union s interest in the student-occupied areas within MacEwan Hall and MacEwan Student Centre is recorded at cost. Amortization is charged on a straight-line basis over 40 years. No amortization is provided on construction-in-progress included in Interest in MacEwan Hall and MacEwan Student Centre until the assets are put in use. (2)

9 Notes to Financial Statements June 30, Capital assets Capital assets are recorded at cost. Amortization is computed on the straight-line basis over the estimated useful life of the assets at the following rates: Furniture and equipment 5 years Kitchen equipment 10 years No amortization is provided on construction in progress until the assets are put in use. Short term investments The short term investments consists of highly liquid guaranteed investment certificates with terms to maturity greater than ninety days, but no more than one year. As at June 30,, The Students Union s short term investments consists of guaranteed investment certificates held by a major bank bearing interest at 1.3% per annum. Funds held in trust and liability for funds held in trust Funds held in trust represent monies managed by the Students Union on behalf of other organizations. The Students Union does not report the revenue and expenses related to these funds. Financial instruments The Students' Union initially measures financial assets and financial liabilities at fair value. It subsequently measures its investments at fair value. The financial assets subsequently measured at amortized cost include cash, funds held in trust, accounts receivable. The financial liabilities subsequently recorded at amortized cost include accounts payable and accrued charges, liability for funds held in trust, tenant deposits for leasehold improvements and debt. It is the opinion of management that the Students' Union is not subject to significant credit, interest rate, price, liquidities or currency risk related to these financial instruments. 3 Interest in MacEwan Hall and MacEwan Student Centre The Students Union operates under a License of Occupation, Operating and Management Agreement (the Agreement ) with the University of Calgary. This agreement provides the Students Union a right to occupy space in MacEwan Hall and MacEwan Student Centre rent free in consideration for contributions the Students Union made towards the cost of construction of the buildings. This agreement currently expires on December 10, after considering the available renewal provisions within the agreement. Further, the agreement allows for five additional one year extensions of the agreement subject to neither party submitting a notification to terminate the extension agreement. As such, the current extension of the agreement will expire June 30, 2015, and will be subject to additional extensions not to exceed the final term ending June 30, The Students Union is responsible for the payment of occupancy costs annually under the agreement. (3)

10 Notes to Financial Statements June 30, The Students Union records its investment in the interest in MacEwan Hall and the MacEwan Student Centre as a long-term asset as the Students Union has the beneficial risks and rewards of ownership of these assets. Redevelopment costs 22,941,383 22,417,708 Less: Accumulated amortization (8,007,511) (7,549,800) Amortization provided for in the current year totalled 487,710 ( 483,240). 14,933,872 14,867,908 Included in redevelopment costs are construction-in-progress amounts of 534,994 ( 214,522) that relate to assets not put in use. 4 Capital assets Cost Accumulated amortization Net Net Kitchen equipment 169,102 42, , ,719 Furniture and equipment 1,546,566 1,098, , ,085 1,715,668 1,140, , ,804 Amortization provided for in the current year totalled 214,408 ( 233,248). 5 Long-term debt Non-revolving term facility, bearing interest at 2.98% per annum, maturing July 8, 2018, with floating instalment payments, collateralized by an assignment of student fees. 3,681,419 5,105,000 Less: Amounts due within one year (358,170) (5,105,000) 3,323,249 - (4)

11 Notes to Financial Statements June 30, 6 Deferred contributions Deferred contributions of the Operating Fund are comprised of contributions received that were restricted by the contributor and remain unspent at year end. Deferred contributions of the Capital Fund are comprised of a student levy imposed January 1, 1996 and other funds which have been designated for the purpose of the redevelopment project to the MacEwan Student Centre. Changes in deferred contributions are as follows: Operating Fund Capital Fund Net Net Balance Beginning of year 1,247,168 3,668,191 4,915,359 5,019,116 Add: Amounts received for future expenditures 2,941, ,115 3,527,177 1,784,272 Less: Amount amortized to revenue (1,990,079) (105,898) (2,095,977) (1,888,029) Balance End of year 2,198,151 4,148,408 6,346,559 4,915,359 7 Internally restricted reserve funds Certain funds have been restricted for use by the Students Union for the following purposes. These restricted funds are invested in short-term deposits. Student Health Plan 3,440,073 3,087,932 Refugee students 205, ,410 Food bank 131, ,555 Library Assistance - 98,702 Election campaign 24,722 24,722 Food Court Reserve 8,338 8,338 Other 4,619 2,762 Tutor referral ,814,457 3,528,725 (5)

12 Notes to Financial Statements June 30, 8 Endowment Funds Funds contributed through a special Students Union levy are designated to assist the University of Calgary Library. 50% of all funds contributed through the special levy must be permanently maintained for the University of Calgary Library and are classified as endowment funds. The fiscal endowment fund contribution of 97,092 ( 98,702) represents 50% of the fiscal special student levy of 194,184 (fiscal 197,404) (note 9). 9 Student fees Total student fees received through the University of Calgary 5,522,811 5,599,727 Other fees 27,596 35,210 Less allocations to Library Endowment Fund (97,092) (98,702) Less amounts received on behalf of others Legal aid (87,975) (89,499) Gauntlet (238,133) (242,212) NUTV (257,124) (262,029) CJSW (292,987) (298,716) 4,577,096 4,643,779 Included in total student fees is 194,184 designated for the University of Calgary Library. 50% of the funds contributed or 97,092 ( 98,702) are recorded as contributions to endowment funds (note 8) as these contributions must be permanently maintained. 10 Government remittances Accounts payable and accrued charges include government remittances payable of 11,833 ( 15,933). 11 Commitments Minimum payments in respect of operating leases for photocopy equipment are as follows: , , ,664 (6)

13 Schedule of Operating Revenue and Expenditures (unaudited) For the year ended June 30, Schedule 1 Student government Student activities Commercial services (schedule 2) Reserve Total Revenue Operating , ,251 12,240,604 11,576, ,401,654 11,691,467 Student fees (note 9) 1,512,776 1,536, ,064,321 3,107,006 4,577,096 4,643,779 Amortization of deferred contributions - - 1,990,079 1,782, ,990,079 1,782,132 Interest , , , ,353 Donations ,617 19, ,802 11,361 28,420 30,976 1,512,776 1,536,773 2,173,746 1,916,998 12,354,691 11,679,569 3,070,123 3,118,367 19,111,336 18,251,707 Expenditures Cost of providing services ,642 22,229 2,575,338 2,364,856 2,456,021 2,553,058 5,056,001 4,940,144 Salaries - - 1,212,710 1,198,072 4,684,402 4,142, ,897,112 5,340,842 Operating ,990,869 3,240,045 24,000 24,000 3,014,868 3,264,045 Building operation , , , ,278 Student services - - 2,658,029 2,431, ,658,029 2,431,509 Donations from restricted funds , , , , ,895,381 3,651,810 10,624,918 10,035,949 2,784,391 2,700,464 17,304,688 16,388,224 Excess (deficiency) of revenue over expenditures 1,512,776 1,536,773 (1,721,635) (1,734,812) 1,729,773 1,643, , ,903 1,806,648 1,863,483

14 Schedule of Commercial Services Revenue and Expenditures (Unaudited) For the year ended June 30, Schedule 2 Business leasing Retail Food/beverage/events Total Revenue 3,033,151 2,636,192 1,501,222 1,391,942 7,820,318 7,651,435 12,354,691 11,679,569 Expenditures Cost of providing services , ,647 1,720,969 1,533,209 2,575,338 2,364,856 Salaries 1,251,821 1,167, , ,029 3,195,195 2,754,990 4,684,402 4,142,770 Operating 580, ,606 79,724 80,965 2,330,280 2,593,473 2,990,869 3,240,045 Building operation 279, ,262 5,208 5,208 89,809 89, , ,278 2,111,985 1,926,618 1,176,686 1,137,849 7,336,253 6,971,480 10,624,918 10,035,949 Excess of revenue over expenditures 921, , , , , ,955 1,729,773 1,643,620