Past instances and allegations of financial mismanagement should spark a change in strategy. STEVEN LEE/THE VARSITY

Over the past few years, stories of financial mismanagement within student societies at U of T have regularly appeared in the pages of The Varsity. For example, it is suspected that money was stolen from the Victoria University Students’ Administrative Council (VUSAC) office twice in two years, and money was recently believed to have been stolen from a locker rented by the Undergraduate Earth Sciences Association. Alongside these alleged thefts, there have been concerns over potential misspending and discrepancies in financial disclosures by the Cinema Studies Student Union, as well as ongoing concerns regarding the St. Michael’s College Student Union (SMCSU).

Student societies are not treating finances with sufficient professionalism. Much attention is often understandably focused on the most egregious allegations; stories about hidden bank accounts and lawsuits over $277,000 in alleged fraud are exciting, while petty theft of $500 is not. However, the repercussions of ignoring more minor issues of mismanagement are just as pressing as those stemming from higher-profile stories.

During our tenure on VUSAC in the 2016–2017 academic year, we investigated the theft of revenue from the Code Red semi-formal event, and we implemented financial management policies in response. We believe that theft and mismanagement can be countered through strong policies and professional culture, both of which are often lacking in student groups.

The recent suspected theft from the Victoria College Drama Society (VCDS) from within the VUSAC office is similar to last year’s theft of ticket revenue from Code Red. VCDS is its own autonomous group at Vic, and thus it is not bound by VUSAC’s new policies. However, the repetitiveness and similarity of these occurrences, both at VUSAC and elsewhere, have led us to believe that there are root causes of financial malpractice across all student societies, with solutions that are equally applicable across campus.

After investigating the Code Red scandal, in which roughly $500 in ticket sales went missing, we concluded that there were two central problems with money management at VUSAC. First, the fact that money was stolen so easily from a cash box demonstrated fundamental flaws regarding how money was stored after events. Second, poor record-keeping resulted in our inability to identify exactly how much cash should have been on hand given the number of tickets sold.

To ensure money was handled more responsibly, we put together a policy document mandating that the member of council in charge of any given event be responsible for the storage and security of cash revenue generated, and we laid out a step-by-step process for how to secure cash generated through in-person sales. We also put together record-keeping guidelines for ticket sales in order to ensure accountability and accuracy if theft does occur.

The lessons we learned at VUSAC last year have broad applicability, even beyond issues of petty theft. In 2017, the University College Literary & Athletic Society (UCLit) was faced with a budget shortfall after unpaid expenses from their orientation week were discovered. UCLit dealt with the outstanding expenses via a contingency fund designed for precisely that kind of financial misstep. Better record-keeping may have prevented these expenses from being unpaid in the first place, and, at minimum, could have allowed for the people involved to recognize their mistake earlier.

The UC Orientation Co-Chairs took responsibility for their actions and should be commended for their accountability. Despite the numerous precautions that can prevent deliberate malfeasance, mistakes will inevitably occur, and it is thus important for those involved to be accountable and transparent when mistakes happen.

Unfortunately, not everyone is as prepared as UCLit appeared to be. From our time at VUSAC, we learned that even well-intentioned people can make mistakes. With so many moving parts of a large organization, it took a few weeks for us to find out about the theft and investigate. We also found that the budgeting process was inflexible to unexpected changes from individual components within the budget, resulting in little room to manoeuvre when reconciling the budget projections with the financial realities.

This is not, however, to suggest budgeting processes should be looser. Rather, constraints on the ability of students to reallocate money are essential, as they ensure financial transparency throughout the budgeting process. Student leaders at other societies should expect these limitations, and they should plan for the eventuality of financial complications.

Moving beyond policy, student societies faced with financial mismanagement also require a culture shift to actually achieve the operational changes we have highlighted. Ideally, a more engaged student population can hold its leaders accountable. The reality, however, is that students lead busy lives and often do not have the time to pore over budgets and policies. In absence of more extensive student involvement, it is incumbent on student leaders to create an institutional culture that promotes financial accountability and best practices.

Enforcement of student society policies remains weak, and student leaders face few — if any — repercussions for breaching them. But firmly establishing operating policies can have positive effects in terms of institutional culture and allow future generations of students to learn best practices and establish norms that carry over year to year.

Losing or misplacing student funds should always be taken seriously. If mismanagement escalates, the repercussions may range well beyond the financial. Student societies that continue to engage in financial malpractice may see a loss in their independence. One need only look as far as SMCSU to see the result of continued malfeasance: the requirement of co-signing authority of administration on all financial decisions over $500. If student societies hope to retain their independence, it is essential that they keep their financial houses in order.

Peter Huycke is a graduate student in the School of Public Policy and Governance. He graduated from Victoria College in 2017 and served as VUSAC’s interim Finance Chair from January 2017 to the end of the 2016–2017 academic year.

Stephen Warner is a graduate student in the Department of Political Science. He graduated from Victoria College in 2017 and served as Vice-President External of VUSAC during the 2016–2017 academic year.

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