Posted in In the news, Montreal, Opinion

Student union money is easily embezzled

The Concordia Student Union has a budget of about a million dollars a year (actually, it’s probably more than that now, but within an order of magnitude). That’s a lot of money, and it’s managed by amateurs who swoop in without any experience. So it’s unsurprising that eight years ago, the union discovered that one of its executives made off with almost $200,000 over a year and a half by writing cheques to herself and hiding the evidence from the bookkeeper.

When the executive discovered what happened (at first they thought it was more like $30,000), it was reported to the council of representatives in a super-secret meeting. The press release came out a week later. It took four years before she was finally convicted, though the union still hasn’t recovered all the money.

This month, history appears to be repeating itself, and the CSU has apparently discovered another “financial irregularity” about “misappropriation of funds” which was presented to a super-secret meeting. No dollar amount is given, but one would assume we’re not talking about a few extra beers in the expense account. No one is named, of course, but it would have to be someone with access to the money, either an executive or an accountant.

For someone to do this at the CSU takes balls (and “creative accounting” skills) the likes of which I have never seen. The union put rigorous financial controls in place after the first fraud, including new financial policies and the hiring of a financial controller. It will be interesting to see how these safeguards were foiled this time.

Meanwhile, a bit further west down de Maisonneuve Blvd., the Dawson Student Union has a financial scandal of its own. It seems one of its executives racked up $29,000 in expenses on her executive credit card (well, I assume it’s a her – if a guy is spending that much on clothes and jewellry, there’s bigger problems afoot).

Whose bright idea was it to give apparently limitless credit cards to 18-year-old CEGEP students? I mean seriously, did nobody consider the rather obvious possibility that this might happen?

What the CSU and DSU have in common, despite the fact that stealing from them is like taking candy from a baby (a baby with a trailer full of candy), is that both were accredited as official representatives of their students, meaning the schools’ administrations have certain legal obligations involving student fees, and can’t interfere in their affairs.

I’m not suggesting differently here, but this is clearly a systemic problem. CEGEP and university students can’t be trusted with huge bank accounts. Rigorous financial controls need to be put in place, and those controls need to be verified on a regular basis by an independent third party.

Perhaps the government should step in here. The same law that says universities must hand over student fees to accredited student unions should also require certain financial control measures be put in place, and there should be regular inspections by the government to ensure that they are respected. Miss your audit by a day and you get a visit from a government agent. Even if you don’t, you still get a visit. Otherwise things like this will just keep happening.

And all of this is completely separate from the misappropriation of funds by student clubs and smaller associations. It was rampant in my time and I doubt it’s gotten much better.

8 thoughts on “Student union money is easily embezzled

  1. Dave K

    I’m an executive in a Université de Montréal student association and every time I hear such a story it makes a chill run down my spine. I’m finishing my second bachelor’s and over six years in university I’ve met dozens of dedicated student leaders who took their responsabilities seriously, and I think it’s entirely possible to have your act together in a student association. Sometimes there’s a rotten apple, just as can be the case in companies, government, and generally every form of social organization known to humankind. There should be adequate safeguards, but a person who really wants to will always be able to work the system.

    However, I do agree that college students fundamentally aren’t ready for the kind of financial control referred to in the post. Giving children not always old enough to vote access to far too much of someone else’s money is a bad idea no matter how you justify it.

    Reply
  2. princess iveylocks

    I don’t suppose it would occur to you that men occasionally buy jewelry for their girlfriends, hmmm?

    Reply
  3. Bob

    Hopefully the CSU funds weren’t used to donate money to Cystic Fibrosis Research, else we’ll have a SERIOUS scandal here…

    Reply
  4. Minh

    That’s the result of secrecy and no accountability.

    The majority of the students does not know that their money is being mismanaged.

    Reply
  5. Tim

    *sigh* Plus ça change…

    I can’t speak to other incorporated student unions, but the CSU does have a systemic problem, and I do believe it needs an impartial financial chaperon, if only to have the confidence of the student body. The problem is that none of the immediate stakeholders (CSU, faculty student assocs., uni. admin., “Community-at-Large”, et al.) is seen as neutral by all sides. Short of a court order, I don’t see a remedy of this nature that won’t cause at least one party to scream “paternalism”, or “collusion”, or “fascism”, or “corruption”, or…

    Wait—Wasn’t there a thesaurus in the 2001-2002 student handbook for just this purpose? Yeah, I think it was on one of the unnumbered pages…

    (I think I just revealed myself as a Concordistani refugee on basis of sarcastic persecution. I asked for asylum, but they told me there was no need; Concordia is a nut-house!)

    Reply
  6. Pingback: Fagstein » Students shouldn’t manage student finances

  7. R. Sonin

    The CSU released (*cough*) audited financial statements for the first time in years – three sets.

    For the sets covering the tenures of Mohammed Shuriye and Khaleed Juma (2005-6 and 2006-7, respectively) the auditors said:

    “Our examination revealed serious deficiencies in internal control over revenues and expenses. As a consequence, we were unable to satisfy ourslves that all revenues and expenses of the Union had been recorded nor were we able to satisfy ourselves that the recorded transactions were proper.”

    For the set covering Angelica Novoa’s executive (2007-8) they said:

    “We were not able to express an opinion whether the non-consolidated financial statements for the year ended May 31, 2007 were presented fairly in accordance with Canadian generally accepted accounting principles. Since opening balance sheet figures enter into the determination of the results of operations and cash flows, we were not able to determine whether adjustments to revenues, expenses, opening net assets and opening fixed assets might be necessary.”

    The full set of CSU financial statements is available at the New Union site (voteforanewunion.com) even if they aren’t at the CSU site (csu.qc.ca):

    http://voteforanewunion.com/wp-content/uploads/2009/06/csu-non-consolidated-financial-statements-2006.pdf
    http://voteforanewunion.com/wp-content/uploads/2009/06/csu-non-consolidated-financial-statements-2007.pdf
    http://voteforanewunion.com/wp-content/uploads/2009/06/csu-non-consolidated-financial-statements-2008.pdf

    Reply

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