$300,000 in Student Money Suddenly Appears to SA Senate
On Feb. 12, a new line containing $300,000 popped up in the Student Association's budget.
In a 13-2-0 vote at a Feb. 12 meeting, the SA Senate approved moving $300,000 from a budgetary line named "Cash and Investments" to a new line entitled "Projects." Before the move, the "Cash and Investments" reserve had about $650,000 in it, according to SA treasurer Sikander Kahn. The fund exists as a rollover of the mandatory student activity fee. The "Cash and Investments" fund now contains $350,000.
Before Kahn motioned to move part of the fund – which he referred to as a "cushion" or "rainy day fund" – to a new line, the Senate had no idea it existed.
"I felt a responsibility that I should take an extra step to tell the Senate we have this money and budget some of it in the operating budget, so we can make the best effort to spend it," Kahn said.
The SA must keep at least 5 percent of the total money it received last year in the reserve, but the amount also cannot exceed the current year's operational costs, according to SUNY Mandatory Student Activity Fee guidelines.
"Technically, I cannot collect 100 percent of our budget and put it in our investment," Kahn said. "I should be spending it."
That's why Kahn motioned to move money from the reserve fund to the new "Projects" line.
This fiscal year, the SA collected $3.5 million, but it spent $3.64 million, so the organization tapped into its investments, according to Kahn. The SA is currently in a $140,000 deficit. In other words, the organization is spending more on students than what was collected from them this year.
Kahn said the senators have always had access to the audit reports, and they can ask the e-board and Sub-Board questions. Because the money in the reserve was previously not budgeted, the SA had not designated a place for they money to go. Therefore, it was not a part of the Senate's visible, operating paperwork.
"We should make our best effort to spend this money on students, and [the reserve is] available for the Senate to see," Kahn said. "Everything is available for the Senate to see, anyway, but [senators] would have to ask more questions. But this way it is available for the Senate to see in front [of them]."
In 2007, the Student Activity Fee was raised from $80 to $94.75. In that period of time, the reserve accumulated to be over $500,000. That's because there weren't plans to spend the additional money during those years, and it went into savings, according to Kahn.
The "Cash and Investments" reserve exists as a precautionary measure. It can be used if the SA is sued, since the SA has no budget for lawsuits, according to Kahn. It also exists in case the total number of students at UB decreases. In that case, it could compensate for the expected amount of the activity fee that would have come in.
"In the past, and this is not to tarnish the reputation of the SA at all, because it has been very widespread…but the money put in reserves was used for events such as Spring Fest and Fall Fest," said James Gibbons, an on-campus SA senator.
Kahn said that last year, money was taken from the reserve fund to help pay for Spring Fest, because it was held in the stadium – a venue that caused the concert to cost more than previously budgeted for.
Now, Kahn has set up guidelines of how he believes the new "Projects" line should be spent.
Kahn addresses three points in his suggested guidelines. He suggests the money spent have long-term benefit to the undergraduate student population, the project the money is spent on must benefit students for a period of at least five calendar years, and the project must have the potential to provide services to at least more than half of the undergraduate population.
Senate Chair Darwinson Valdez was one of the senators to sign Kahn's guideline proposal. He only signed it because, as Senate chair, he has to go along with the majority of Senate.
"I agree with some of the guidelines," Valdez said. "I would like for it to be used in that way, but it's almost an unrealistic way to do it. Only 30 to 40 percent of students get their service from SA…so to find a project that would target around 50 percent of students, I'd say is almost impossible."
In the Feb. 12 Senate meeting, Valdez wasn't in favor of moving the line because he didn't feel the senators had enough knowledge about it. Valdez said that there was difference of opinion between Kahn and SA President JoAnna Datz at the Senate meeting; Datz was not in favor of Kahn's motion.
According to the unapproved Senate minutes from Feb. 12, Datz said the money is tied up in certificates of deposit, and "we might wind up paying a fee for accessing [it]."
When asked to provide details about the specifics of those possible fees, Datz said she would have to speak with the SA accountant first, and she was unavailable to make a comment by press time.
"My opinion is we move money that was earning interest into a line that is now is just sitting there, so I don't see the benefit that we have done," Valdez said.
In the Senate minutes, Kahn said "there was no reason to keep so much money in savings because SA is a non-for-profit organization."
"My aim is that people understand [the reserve fund], but with enough regulations and precaution that the mandatory activity fee can't be abused," Kahn said. "Most importantly, so people understand how the Student Association works, how the budget works, and how finances work. [And for] a normal undergraduate student to understand what's happening right now – we're giving back more [to the students] than they give us."
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