I have focused this blog on the more quantitative side of finance, but I also want to talk about the softer, less quant-y side. I was elected as the Vice-President Finance for the Arts Undergraduate Society for 2012-2013, out of a student body of 7,600 students. I had based my campaign on minor things like faster response times to funding applications, more open communication from the VP Finance and the creation of a new fund for charitable initiatives. Unknown to me
at that time, the AUS was dealing with several problems which would have resulted in bankruptcy a few months down the line. The most immediate of these problems was an acute cash shortfall and a liquidity crisis.
The cash shortfall was a result of several hundred thousand dollars of frozen funds, frozen by McGill University and by Revenu Quebec (the Quebec Tax agency). The AUS had been facing this problem of frozen funds intermittently since 2009, but had been able to get enough funding from McGill to function, in exchange for promises on shaping up its finances. These promises were subsequently not upheld, despite the best efforts of those in charge of the AUS. Therefore, when I took over the finances of the AUS, because of these string of broken promises, there was almost no room to negotiate with McGill to get enough funding to avoid bankruptcy. So a few weeks into my position, I was in charge of an organization with around $25,000 dollars of debt and less than $800 in the checking and savings accounts, spiraling down the path to insolvency .
In the next post, I will cover the exciting things that happened next!