Athabasca University (AU) will need to find an additional $5 million to fend off financial insolvency in two years.
Based on earlier projections from AU’s Financial Services department, insolvency was expected in the 2016-2017 financial year.
But given recent revisions to the budget, insolvency has been pushed back to 2017-2018.
The announcement was made during a budget development town hall at AU on Nov. 18.
Financial services director Rocky Brown explained at the meeting that insolvency occurred when unencumbered cash — or financial reserves — reaches zero.
To avoid or delay that from happening, he said the university would need to find another $5 million in next year’s budget.
Financial planning and budgets manager Carmine von Tettenborn informed the crowd that the university’s reserves may not be able to cover the difference between expenses and revenues.
“There’s a widening gap and our reserve fund, or our rainy-day fund, won’t be sufficient to cover that gap,” von Tettenborn said.
The revisions to the new budget show an $8,000 increase in provincial grants and $2,000 decrease in student fee revenues over two budgetary years. It’s not known how much these changes impacted AU’s financial insolvency.
Since the Alberta Government passed Bill 3 in June, which froze post-secondary tuition to 2014/2015 levels, AU has had to reverse a number of fee increases and issue refunds.
Undergraduate students who lived in Alberta and registered for fall or winter courses prior to July 8 were refunded $13 per three-credit course, while graduate students received a $30 to $150 refund, depending on their program.
Students who registered after July 8 paid the new rate and were not given refunds.
AU president Peter MacKinnon didn’t wish to comment at this time.
Instead, AU communications officer Heidi Staseson issued the following statement.
“We are in the early days of the budget process; to comment would be very premature,” reads the statement. “We have met with our AU internal community to provide as much information as we know, and we will follow a structured process from hereon.”
