The Queen’s School of Business and the Commerce Society are shelling out a total of $46,000 to keep ICBC alive.
Queen’s Inter-Collegiate Business Competition (ICBC) came under financial scrutiny when it was announced earlier this year the competition experienced a revenue shortfall of $37,000.
David Saunders, dean of QSB, said there is no sign of financial mismanagement on the part of the organizers. A financial assessment of ICBC was conducted to clarify the cause of the revenue shortfall, he said.
“Anytime there’s a short fall, you check why it occurred. You might not have enough revenue or you might overspend. [ICBC] hadn’t overspent. They were responsible. Sometimes sponsors just don’t happen,” he said. “One of the roles of the business school is to encourage students to take calculated risks.”
Saunders said this is not the first time a revenue shortfall has occurred during a Queen’s business competition.
“This has happened with other conferences from time to time,” he said. “ComSoc is working to tighten internal procedures. Our role is to encourage them. That’s the way it should be. We’re more than happy to let ComSoc take the lead on this.”
QSB offered ICBC an interest-free loan to be paid back in 2017 so the competition can continue for years to come, said Saunders.
“We don’t want to burden any one year, so we divided it out to be fair. [The loan] is re-negotiable in the next few years.”
ICBC is the largest business competition of its kind in Canada, said Commerce Society President Matthew Price, Comm ’09, via e-mail.
“It is the longest-running undergraduate business case competition in Canada. Students go through several qualifying rounds in order to compete in the Final Weekend. [ICBC 2008] drew 158 case submissions from 35 schools to earn one of the 48 coveted team positions,” he said. “Events are offered in all of the major business disciplines, including ing, business policy, debating, finance, ethics, labour arbitration, marketing and management information systems. Teams present their case solutions to leaders in their respective industries where they receive constructive and network with the corporate elite.”
Price said ICBC is one of the many business competitions ComSoc organizes during each school year.
ComSoc and QSB offered loans to ICBC because the competition is both prestigious for Queen’s and a part of Queen’s tradition, he said. “All our competitions are student-run. ComSoc has 10 conferences and four national and international competitions. We run these all throughout the year,” he said. “ICBC is a very prestigious event. Everyone takes pride in it.
It brings Queen’s a lot of recognition. This year’s event will be more successful than in years past.”
A lack of sponsors resulted in a revenue shortfall last year, Price said.
“Bankruptcy wouldn’t be the right word for it,” he said. “We had a need to step in and provide [ICBC] a loan. The shortfall in revenue was caused because there was … not enough sponsors to meet the expenses.”
Price said ComSoc realized there was a problem in April, when cheques given to vendors for the event were bouncing.
“When vendors called QSB about cheques bouncing, the first thing we did was pay the vendors. We proactively stepped in,” he said. “We run 14 competitions [in a year], so we value our relationships with vendors around Kingston.”
Price said the Queen’s School of Business started investigating the competition’s financial management in April.
“It wasn’t an audit. The QSB Finance Office did a review of finances, and they concluded expenses were appropriate. The review indicated that ICBC was in good financial standing in the year prior.”
“[In April] we got together with Queen’s School of Business to discuss the situation,” he said. “The QSB loan was for $38,500. The Commerce Society loan was for $7,500.” He said ComSoc’s budget is in excess of $1 million per year.
“The loan from ComSoc was paid from our retained earnings, with an interest rate equal to the prevailing market rate which it would otherwise earn in a bank .” Price said the total loan amount is for $46,000 which includes $9,000 start-up for ICBC 2009.
“The ComSoc loan has interest attached to it. The QSB loan is interest free. We appreciate the of the QSB,” he said.
“Our actual revenue fell short of our expected revenue by approximately 18 per cent in addition to increased expenses to highlight the landmark 30th anniversary.
“The loan [from QSB] will be paid back by 2017. There’s a reasonable amount that will be paid back each year. The ComSoc loan will be paid back first.”
Price said ComSoc is proposing a new external committee policy in ComSoc Assembly to ensure the budgets of any external committees are carefully monitored.
“The new external policy will have a positive effect,” he said. “ComSoc will have more of a role in the conferences and in budget management.”
Price said at ComSoc Assembly, a motion to de-ratify ICBC was rejected.
“Any conference that has financial problems comes for a vote at ComSoc for de-ratification,” he said. “A presentation was made by the current ICBC Co-Chairs to ComSoc Assembly on Sept. 14, the first assembly of the 2008-09 academic year. Following the presentation was the motion to de-ratify, which was overwhelmingly opposed.”
Kayla Paret, Comm ’10 and ICBC co-chair, said the competition will not be affected by the financial issues of last year.
“We have overwhelming from past alumni and fellow competitors. We will work closely with ComSoc to manage our budget,” she said.
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