The College of New Caledonia has saved up almost $4 million the province won't let it access. It is there, but not really there, under the rules the provincial government has set for running post-secondary institutions.
The money was brought up for discussion at the Select Standing Committee on Finance and Government Services hearings held on Tuesday. CNC interim president Bryn Kulmatycki was questioned about it by members of the all-parties MLA group and he conceded it was an accounting principal difficult to explain to the public.
"That money kind of grew over time and many years, little bits and pieces left over at the end of the year, or maybe if we received some last minute, one-time funding from the government, and it accumulated into that particular account," he explained to the Citizen following the hearings.
If funds are not specifically allocated to a capital project or a prescribed program, these little bits have to be returned to government. However, institutions are allowed to hold onto them to ensure balanced budgets.
"Access to these funds would require the board to approve a deficit budget and seek approval from the province," said Ministry of Advanced Education spokesperson Dan Gilmore. "Each year, the institutions surplus or deficit is rolled into accumulated surplus (otherwise known as retained earnings). Organizations want a certain amount of accumulated surplus on the books as this indicates an ability to weather any unforeseen circumstances. For example, if an organization operated in a deficit position in a given year, this would draw down the accumulated surplus. If this happened for multiple years, it could mean the organization was on the brink of financial failure."
This is not the case for CNC. The money would be a windfall for payment of staff and upkeep of buildings and equipment. The accumulation sits at about $3.8 million. It is so important for colleges, universities and polytechniques to have a balanced budget, is the general principal behind this policy, that the money can't simply be a "rainy day" fund, it is an "all-out storm" fund to ensure a fiscal disaster doesn't cost the institution's students their education program or the staff their jobs.
"It would be a major benefit if the ability to use that money was less restrictive," said Kulmatycki, but stressed that it was not an operational priority to pressure the government on this point. The sequestered money was not a point he brought up, he pointed out, it came to the MLAs' attention via others. However, he agrees that the college should have more say in how that money is administrated.
According to the ministry, there are no plans to change the rules.