More than 6 figures of deficit. Photo: Sierra Bein

RSU at $1-million dollar net loss due to events

In News /

By Sarah Krichel

  • The deficit—which was about $800,000 more than expected—is mainly due to 6 Fest, 6 Cent Concert and other events.
  • RSU president Obaid Ullah said he didn’t know about the size of the deficit, and that the union had initially planned to have a surplus of more than $100,000.

According to a document obtained by The Eyeopener, the Ryerson Students’ Union (RSU) has accumulated a net loss of approximately $1 million from overspending on events during the 2016-2017 year.

Expenses for RSU events came to $1,696,938.42, with a total revenue amounting to $693,702.54. This means for events specifically, the RSU is running a deficit of $1,003,235.88.

The document shows the largest contributor to the million-dollar net loss were costs related to the two-day 6 Fest concert held in October, which included expenses from the French Montana concert in September. The 6 Fest operational expenses came to a total of about $1.2 million.

RSU president Obaid Ullah told The Eye that the initial plan was to have a surplus between $100,000 and $200,000 from 6 Fest. That money was planned to be used for other events throughout the year.

When The Eye presented Ullah with the document on Feb. 6, he said it was the first time he had seen it. Still, he maintains the RSU has a “healthy cashflow.”

Ullah added that many people are confusing the term “deficit” with “debt.”

“We’re not in debt to anyone,” he said, clarifying that the RSU does not owe money. “It just means we spent more money than what came in that year.”   

The 6 Fest ticket sale revenue was projected to be $1.1 million, according to  RSU vice-president operations Neal Muthreja. However, the document indicates that the revenue only reached about 16.65 per cent of that goal (a total of $183,124.11).

Ullah said the projected revenue for ticket sales was off due to the change of date and venue. Many students were supposed to receive refunds as a result of the rescheduling. The Eye previously reported that refund efforts are still ongoing due to disorganization and miscommunication among executives. Harman Singh, vice-president student life & events, was criticized for transferring $80,000 into his personal bank account in an effort to issue the refunds.

After all 6 Fest expenses were accounted for, the concert accumulated a total net loss of $757,533.01.

This number accounts for sponsorship revenues totalling $259,966.64. 

Additionally, $240,053.11 was spent on the 6 Cent concert put on in May.

These numbers were cited in a letter from five RSU board members who resigned collectively on Feb. 6.

The board members also cited the failure of a motion to impeach Singh at a board of directors meeting on Feb. 3. The motion came as a result of how the refund process was handled by Singh.

When asked about the budget, Singh said, “I’m not responsible to speak for the budget, and it’s not something I can comment to. It’s Neal’s portfolio to manage the finances of the RSU and as treasurer it is his job, since he signs off on them.” He added that he has not seen the numbers being circulated amongst board members.

But Muthreja said that the events  budget report was presented to him by Singh. The board approved the budget in August 2016, according to both Muthreja and Ullah.

Muthreja added that there was no opportunity to halt further expenses because Singh would not provide the 6 Fest ticket sale numbers. According to Muthreja, he had no way of knowing that revenues weren’t on track.

“When the ticket revenue wasn’t going as planned it was never brought to our attention,” he said.

Ullah said Muthreja had many opportunities to halt the expenditures, and that it was Muthreja’s responsibility as vice-president operations to keep track of these things.

“It’s not my responsibility to check up on the finances,” Ullah said. “My job is the governance of the RSU.”

Ullah added that from his understanding, he and Singh believed they were not exceeding the 6 Fest budget.

At the Feb. 3 board of directors meeting, however, Michael Foppiano, one of the board members who resigned, quoted a confidential conversation that took place, claiming Singh knew about exceeding the budget the whole time.

“From what I recall I never once said [the budget] was balanced,” Singh said at the meeting in response to Foppiano’s claim.

Singh and Muthreja are both running as opposing presidential candidates in the RSU elections. Ullah is running on Singh’s slate.

Comments

  1. I’ll repeat what I said when The Eyeopener first broke this story. As a former VP Finance and Services of RSU, historically speaking that is a very large loss.

  2. I’m confused, was the money Harman Singh deposited into his bank all accounted for?

  3. That’s what happens when you let Business students run the show.

  4. Since its only February, the deficit will be much larger come the year end. A million dollar deficit is hard to not notice and if Obaid didn’t know, he’s either lying or incompetent.

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