Annual Memo to Student Societies

Memo to Student Societies re: Submission of Audited Financial Statements – October 3, 2024

Audit Requirement

Each student society on whose behalf a compulsory non-academic incidental fee is collected is required by the Policy for Compulsory Non-Academic Incidental Fees (apart from the exceptions noted in the Policy) to have its financial statements audited annually by an independent auditor licensed under the Public Accounting Act. The appointment of an auditor should be approved each year by resolution of the society’s full council or board, or at the society’s annual general meeting of its membership. The audited financial statements should be signed by members of the executive and/or the society’s directors; received by the council, board, or appropriate legislative body of the society; and formally accepted by resolution. In addition, the society’s council or board is responsible for bringing these reports to the attention of, and making them available to, its general membership.

A copy of the audited financial statements should also be forwarded to the Office of the Vice-Provost, Students no later than December 31 each year. If the auditor’s report is not received by this date, or if there is a denial of audit opinion or other qualification which the reviewer feels is sufficiently serious to require special attention, the University may withhold further installments of the fees collected for that year until the society is able to show, by means of an interim review by its auditors of its current finances, that the issues or questions which were identified have been satisfactorily resolved.

Unqualified, in this case, means without condition or limitation, as in it is a clean report and there are no qualifying factors to the auditor’s review. Qualified, in this case, means an auditor is unable to render a full opinion about the society’s finances, because the accounting may not meet generally accepted accounting principles or because the information was incomplete for some reason. For example, collecting entrance fees to a program using cash with no receipts means the auditor cannot verify how much money the society actually received because there is no paper trail to confirm the final amount.

Standard of Audit

When the audit has been completed, the auditor may submit a memorandum of recommendations addressed to the executive of the society and containing comments on:

• the efficacy of procedures;
• any unusual operating results; and/or
• any other aspects of accounting and financial control which should be brought to the attention of the membership.

The audit reviewer in the Office of the Vice-Provost, Students will expect a copy of any such interim memorandum of this nature if one is received by the society.

Audit Items

The following documentation should be prepared for a student society’s selected auditor:

• Journals/ledgers that provide details of all accounting transactions – These journals/ledgers must be complete and accurate. The journal/ledger detail must be totaled, and these totals must agree with the income and expense amounts reported in the financial statements.
• Bank statements and cancelled cheques for every month of the fiscal year – These documents must be organized and details of outstanding cheques and deposits at year-end must be provided.
• Receipts/invoices and cheque requisition forms to support all expenditures and their approvals
• Receipts or other documentation to support revenue and/or cash receipts (other than student fee revenue received from the University).
• Financial statements (i.e., income statement, balance sheet) – Financial statements must be prepared accurately and in accordance with generally accepted accounting principles. The statements must be prepared by an individual with appropriate knowledge and experience. An accountant or bookkeeper should be hired if necessary.

Audit Tips

To minimize audit fees:

• Keep your society’s finances up to date and accurate.
• Make certain that all files are in order and complete.
• Arrange a pre-audit meeting with the auditor to determine what they will need, including any analyses and/or schedules for their files.
• Be accessible for questions during the audit. Provide the auditor with a telephone number and regularly-checked email address.
• Do not agree to the audit fees if they appear unreasonable. Discuss any reservations with the auditor.
• Auditors employed by student societies will be able to do a better job and will charge a more modest fee if they are involved in the creation and monitoring of the bookkeeping systems throughout the year preceding the audit, and if a bookkeeper maintains complete records, eliminating the need for the auditor to do the more routine work.
• When choosing an auditor, you may wish to consider the size of the firm in relation to the size of your society, ask whether your society will be assigned a consistent auditor throughout the audit process,
• and find out whether the auditor is familiar with non-profit organizations.
• The cost of the audit should be projected in the society’s budget.

Exemption from Audit Requirement

Exemptions from the audit requirement (outlined in section B.2. of the Policy for Compulsory Non-Academic Incidental Fees) may be granted by the University’s Internal Auditor provided that:

1. the student fees collected by the University on behalf of the student society concerned amount to less than $30,000 in the fiscal year;
2. the total amount of other income, not including student fees, does not exceed $7,500 in the fiscal year; and
3. the Internal Auditor is satisfied that the society is maintaining proper books of accounts and supporting documentation.

The request for exemption from the audit requirement must be made in writing, bearing the signatures of two-thirds of the society’s executive, to the Office of the Vice-Provost, Students by October 31.

Societies that have requested an exemption from the audit requirement may choose to have their financial records and statements reviewed by the Internal Audit Department or provide a review engagement report from independent auditor licensed under the Public Accounting Act.

Review by the University’s Internal Audit Department

If an exemption from the audit requirement has been requested, the following documentation must be submitted to the Office of the Vice-Provost, Students in an organized, electronic format no later than December 31:

• Journals/ledgers that provide details of all accounting transactions – These journals/ledgers must be complete and accurate. The journal/ledger detail must be totaled, and these totals must agree with the income and expense amounts reported in the financial statements.
• Bank statements and cancelled cheques for every month of the fiscal year – These documents must be organized and details of outstanding cheques and deposits at year-end must be provided.
• Receipts/invoices and cheque requisition forms to support all expenditures and their approvals
• Receipts or other documentation to support revenue and/or cash receipts (other than student fee revenue received from the University).
• Financial statements (i.e., income statement, balance sheet) – Financial statements must be prepared accurately and in accordance with generally accepted accounting principles. The statements must be prepared by an individual with appropriate knowledge and experience. An accountant or bookkeeper should be hired if necessary. The Internal Audit Department will not accept financial statements that are incorrect or that need adjustment.

The Office of the Vice-Provost, Students will conduct a preliminary review of each society’s audit exemption request package, flagging any potentially inaccurate statements and missing documentation, before passing the package on to the Internal Audit Department. Audit exemption request packages are to be submitted electronically, which means that some paper documents may need to be scanned. Please ensure that all scanned documents capture the entire document. Additionally, to assist the reviewers, please consider organizing the electronic documents using clear naming conventions and/or folders.

If a society submits inaccurate, disorganized, or incomplete statements and/or supporting documentation to the Internal Audit Department, the documents will be returned to the society and student fee instalment cheques will be withheld until appropriate documentation is completed.

Societies that request exemption from the audit requirement must reimburse the Internal Audit Department for the cost incurred in reviewing their financial records and statements.

Review Engagement Report

At the discretion of the student society, the society may appoint an independent public accountant licensed under the Public Accounting Act to provide a review engagement report instead of the review by the Internal Audit Department. Analysis, enquiry, and discussion are the principal procedures to meet the objective of a review engagement. This objective is to ascertain whether the financial statements are plausible. If, after reviewing the financial statements, the accountant is satisfied that they are plausible (in other words the financial statements are worthy of belief), an accountant’s standard or unqualified report will be issued.