Otago Daily Times

OUSA makes moves to man­age deficit

- GRANT MILLER grant.miller@odt.co.nz Business · University of Otago · Otago · Dunedin · New Zealand

THE Otago Univer­sity Stu­dents’ As­so­ci­a­tion (OUSA) will bank on im­proved com­mer­cial for­tunes to end a se­ries of deficits.

Rede­vel­op­ing the Univer­sity Book Shop build­ing at the Dunedin cam­pus next year is ex­pected to help the as­so­ci­a­tion pro­duce more in­come from 2022.

How­ever, next year’s deficit is ex­pected to reach $250,000, and that comes on the back of deficits in 2019 and 2020.

The as­so­ci­a­tion is also adding an ad­vi­sory board next year to pro­vide fi­nan­cial ad­vice to help put it on the path to long­term fi­nan­cial sta­bil­ity.

As­so­ci­a­tion fi­nance and strat­egy rep­re­sen­ta­tive Josh Meikle said it had been work­ing on plans for large­scale re­fur­bish­ment of the book shop build­ing since ac­quir­ing it in April last year.

The full cost of the project was ex­pected to be $3.3 mil­lion.

‘‘We an­tic­i­pate see­ing the ben­e­fits of this rede­vel­op­ment from 2022 on­wards.’’

In an ef­fort to re­duce next year’s deficit, the as­so­ci­a­tion ap­plied this month to down­grade its sta­tus with the New Zealand Union of Stu­dents’ As­so­ci­a­tion (NZUSA) to be­ing an as­so­ciate mem­ber. That could have saved just over $20,000, but NZUSA re­jected the ap­pli­ca­tion.

As­so­ciate mem­ber­ship was de­signed for smaller as­so­ci­a­tions, and NZUSA pres­i­dent Is­abella Leni­han­Ikin said the Otago as­so­ci­a­tion needed to show it was fi­nan­cially un­sta­ble for that op­tion to be used.

‘‘The bal­ance sheet is in a healthy po­si­tion,’’ she said.

The OUSA has to­tal eq­uity of about $15 mil­lion.

OUSA pres­i­dent Jack Man­ning said the ap­pli­ca­tion was based on the need to re­duce next year’s deficit with­out com­pro­mis­ing long­term ser­vice pro­vi­sion.

Mr Man­ning said the na­tional ex­ec­u­tive de­cided the OUSA ‘‘did not dis­play the fi­nan­cial need’’ to be granted as­so­ciate mem­ber­ship.

‘‘We are dis­ap­pointed, but re­spect this de­ci­sion, and will re­tain full mem­ber­ship of NZUSA in 2021.’’

In its ap­pli­ca­tion, OUSA said its goal was to break even from 2022, but it faced im­me­di­ate chal­lenges: its in­come was re­duced due to Covid­19, and main­te­nance was needed on its build­ings and fa­cil­i­ties.

Cap­i­tal projects that should re­sult in a boost in in­come would also de­plete re­serves next year.

‘‘Once 2021 projects are un­der way and com­pleted, we should be see­ing an in­crease in com­mer­cial in­come,’’ the OUSA ap­pli­ca­tion said.

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