At Union Council on the 6th of November, University College Dublin Students’ Union (UCDSU) was unable to get approval for their upcoming annual budget after student representatives raised concerns about the planned budget deficit.
UCDSU President Martha Ní Riada presented the budget to SU Council, however, students raised concerns about the plans to run a significant deficit of €71,162 for the coming year. The SU President assured SU Council that the decision to dip into their financial reserves was financially responsible but said “It does look bad I will give you that”.
Ní Riada explained that since COVID-19, the union had begun dipping into its financial reserves, down to €22,334 from €93,496 – with inflation increasing the cost of maintaining the services which the union provides to students.
The decision was made to further reduce the existing reserves this year, as UCD has agreed to increase the capitation grant that the college gives to the SU on an annual basis. At present, the capitation grant stands at €727,527, with the college having committed to year-on-year increases.
The capitation grant paid to UCDSU in the year ending 2019 stood at €749,734, showing that there has been a minor ~3% decrease in the grant paid to the Union over this four-year period in which inflation stood at more than 10% measured by the Irish Consumer Price Index.
Ní Riada assured the council that the union wouldn’t be in deficit over the next few years, as this was a temporary measure. She said the reserves would be built back up over the coming years.
Student representatives began to question the decision-making. Students asked the SU President; how long it took to build up the current levels of reserves; how many years she expected it would take to build back up to current levels, and how much the capitation grant would increase to.
The SU President was unable to give concrete answers to these questions, explaining that she didn’t prepare the budget, “I didn’t do accounting, I can honestly just about count” the President joked.
The budget is prepared by full-time staff of the union in conjunction with external accountants, and the union’s accounts are also externally audited, most recently by McInerney Saunders Chartered Accountants and Statutory Audit Firm.
The SU’s budget will be brought to the council on Monday 20th of November for further discussion, with the SU President having committed to returning to SU Council with answers to the questions levied on November 6th.
Examining the SU Budget, the Union expects to see total income reach €1,099,527, with the vast majority of that income coming from the grant given to UCDSU by the university.
Most of the remaining income is expected to come from sponsorship agreements – €80,000, services income – €100,000, and the profit made by the SU shops across campus. The accounts for the SU Shops are separate, as the shops operate under a separate entity – UCDSU Commercial Services Limited – with one shareholder, the SU.
While the SU expect to generate nearly €1.1 million euros of income, they have not budgeted that the University Observer, the SU-funded campus newspaper, will generate any profit from advertising. The Observer is expected to cost the union more than €57,000 over the year.
Expenditure on support and student activities is expected to reach a considerable €1,170,689 for the year ending 30 June 2024. Payroll for non-elected staff members will reach €518,952 with a further €195,998. This brings the overall payroll to €714,950, the biggest expenditure of the union.
Notable sources of expenditure include an expected €25,000 on running elections, €6,000 in “strategy”, €8,000 in class representative training and activities, and €23,000 being spent on exam costs, such as staffing the SU’s stand in the RDS and other temporary expenses.
The Students’ Union therefore expect to see a loss of €71,162 for the coming year. This budget loss will bring the Union’s financial reserves down to €22,334, just three years after the Students’ Union reported a total financial reserve of €312,891 as of June 2021. This is a cumulative loss over the past three years of €290,557.
It is worth noting that the Union’s 2021 accounts state that the large surplus it reported was due to “the company being in receipt of temporary government grants as a result of the Covid 19 pandemic.”
The same accounts say that the union’s future finances were sustainable due to “tight cost control measures” which had been put in place such as the “cancellation of all non-essential expenditure, the postponement of any further staff hiring and guaranteed capitation funds from University College Dublin”.
Analysis: The Union’s decision to run a budget deficit may seem risky at face value, however, with UCD having committed to increase the capitation grant in the coming years it seems wholly reasonable. Any business being guaranteed a significant increase in its single largest income source could be forgiven for spending part of its cash reserves. The primary reasons for holding reserves are to fund unexpected costs and to allow for better financial manoeuvrability. With the rate of inflation set to reduce in a “gradual” fashion, per the Central Bank, and the Union still planning to hold some limited reserves, the risk in this decision is likely minimal.
Hugh Dooley – Co-Editor
