Budget Crisis Pending GUSA Vote
This Wednesday’s meeting of the Georgetown University Student Association may determine whether or not funds allocated to student organizations will be considerably reduced next year.
According to an e-mail sent to the leaders of student organizations by Student Activities Committee Chair Aakib Khaled (SFS ’10), SAC will be forced to reevaluate the funds that it has already allocated to groups for next year if GUSA does not approve its budget.
“If this budget is not passed, SAC’s financial capabilities will be reduced by some $52,000, or about 25 percent,” Khaled said.
The Funding Board unanimously passed the budget on Feb. 11. The board includes the chairs of the Center for Social Justice Advisory Board for Student Organizations, Club Sports, Media Board, Performing Arts Advisory Council and SAC, along with six senators from the GUSA Finance and Appropriations Committee and representatives from Georgetown Program Board and GUSA.
The budget was voted down last month after GUSA President Calen Angert (MSB ’11) and several senators, including GUSA Senate Vice Speaker Nick Troiano (COL ’11) and Irina Varela (MSB ’11), argued that clubs should be required to spend more of their excess reserve funds before they are allocated more money in the GUSA budget.
Angert has said that spending down the reserve funds is part of his agenda as president. On March 29, Angert addressed budget surpluses and clubs’ tendencies to ask for additional funding when they had not exhausted their budget from the previous year. During this meeting, GUSA passed a resolution to increase the transparency of the Funding Board.
“What we are really looking for is some reasonable solution to this problem,” Angert said. “We want the groups to voluntarily say, ‘These are what are our reserves should be,” and if there are extra funds, they should take that money and put it in the student endowment, which is the only allowable interest-bearing account, and allow it to reach critical mass so we don’t need to continue to levy this tax on students every semester.”
GUSA Senator and Finance and Appropriations Committee Chair Matt Wagner (SFS ’11) highlighted the need for the reserve funds, citing an incident in 2006 when the Georgetown Program Board paid for Fountains of Wayne to perform at a fall concert and had to use a large portion of its reserve funds after low ticket sales.
“[The clubs] have been overstating their risk, and I think we need to put more pressure on them,” said Wagner. “But we have to show them that even if we disagree with short-term things we need to be able to allocate that money.”
In his e-mail, Khaled explained the necessity of the reserve funds, saying that SAC ran out of money for the fiscal year in February and had to take $25,000 out of the reserve to cover the year.
“Without the reserve account, SAC cannot possibly allocate out money to the diverse and complicated events that our groups plan because we will not be able to cover the risk and place our groups’ futures in deep financial jeopardy,” Khaled said.
Wagner addressed the senate and stressed the importance of approving the budget this Wednesday. This will be GUSA’s last planned meeting of the year, as student clubs are not allowed to meet after the last day of class.
“There are two possibilities of what will happen. Neither is good, but one is more plausible to happen,” Wagner said.
If GUSA does not pass the budget, it is possible that the $50 student activities fee that was collected from each student this year will not be used next year. Clubs will have to rely on their other sources of funding, according to Wagner.
“The only money they will have will come from their other two sources of funding,” Wagner said. “These groups are reliant for their planning purposes on these moneys.”
It is possible, however, that Director of Student Programs Erika Cohen-Derr and Associate Director of Student Programs Bill McCoy will seize control of the funds and use the money to create its own budget — effectively overruling GUSA, according to Wagner.
Angert emphasized the importance of resolving the issue in the next week.
“Letting this drag on is to everyone’s detriment,” he said.
Apr 21 2009 at 2:40 p.m.
This is a manufactured crisis. SAC has a quarter million in reserves, and they're being dishonest by saying that they've already had to spend out of their reserves this year. They've borrowed against their reserves to finance clubs that have gone over, that's true, but at the end of the year the 90% of clubs that went under budget will have their funds rolled back into the reserves. So, odds are that the reserves at the end of the year will once again be higher than when they started. All they're doing is forwarding money to themselves and calling it "spending." These are dirty accounting tricks, very disappointing.
The real problem is with the way SAC allocates its money. It only allocates 100% of its funds, essentially depleting all of its funds at the beginning of the year when in reality most of the clubs won't spend anywhere near their whole budget. It is in effect creating a short-term hole in the budget that always gets resolved in the same predictable way. There are much smarter financial management systems out there.
Also to point out, Angert in the article isn't saying that he doesn't want the boards to have ANY reserve funds, he just wants to have them justify their reserve levels and make sure that all of the money is going to the best possible use. Unfortunately the only way he can do that is by holding up the budget, because otherwise the boards can just do whatever they want.
I do hope that GUSA passes a budget, but I also hope that the boards finally put some effort into dealing with the reserves issue.
Apr 21 2009 at 7:35 p.m.
And the Voice beats you to the punch yet again with the great innovation known as the blog. Why can't you guys get with it? I've been following this quite nicely over at Vox Populi since yesterday afternoon.
Apr 21 2009 at 8:09 p.m.
"This will be GUSA’s last planned meeting of the year, as student clubs are not allowed to meet after the last day of class."
Why can't they meet on other days of this week, as classes don't end for another seven days? GUSA senators have legitimate concerns, but this stuff requires compromise, and that sometimes takes serious time and effort.
And what's this nonsense about clubs not being able to meet after classes end? Plenty of clubs are active throughout the year. Our student government should take the example.
If GUSA senators are unable or unwilling to put aside the time to work out these issues carefully and appropriately, they should step aside and make room for others who do.
Apr 21 2009 at 8:17 p.m.
Student groups are not allowed to put on events after classes end. I suppose they could hold meetings after classes end if they really wanted to, but they can't get approval for any events after the last day of classes.
Apr 21 2009 at 10:04 p.m.
GUSA is actually the only club that is allowed to officially meet and has access to its budget over the summer, and it does so. In fact the president and usually some other GUSA members often stay the summer to work on stuff.
The only issue is whether it's fair to ask 35 senators to take time out of studying for finals for these meetings. In my opinion they should do it if necessary (I'm sure they will) but I could see someone like Erika Derr raising a fuss about it being against the rules (the same thing she did to get rid of Brian Wood earlier this year).
The 60-ish GUSA members of course are meeting on a daily and hourly basis, but there's a difference between six of them getting together to talk this out and requiring 35 of them to have an official meeting at which official university business will be conducted. Theoretically, someone like Erika Derr could write them up, so they'd probably need to get permission before scheduling an official event so that whatever they come up with won't be invalidated. I'd say, go ahead and do that now, just in case!
Apr 23 2009 at 4:10 a.m.
GUSA's memory is so short, they don't even realize they set up the SAC endowment themselves! And they wanted it to grow so large, so it could become self-perpetuating and students would never have to pay into it again:
from here http://www18.georgetown.edu/explore/organizations/gusa/?Action=ViewPage&ID=18535>
"5. The Student Activities Fee/Endowment: By the turn of the Millennium, student activities on campus were facing a crisis. As the University increased enrollment and students continued to create new clubs, funding for student activities remained stagnant, since the University simply lacked the funds to expand ever-tightening budgets. Recognizing that an innovative solution to this perennial and potentially crippling problem would be needed, the Student Association proposed, and the student body voted to accept, the institution of a Student Activities Fee of $50, paid by every student, to be used to fund student clubs, performing arts groups, club sports, volunteer and public service organizations, newspapers, and special student initiatives. Furthermore, a Student Activities Endowment was created, funded by part of the Student Activities Fee set aside each year for it, and fundraising done through the Third Century Campaign. In its first year alone, the initiative brought in $150,000 in new funding for student groups, relieving the immediate pressure felt by Georgetown's many and diverse clubs. Now, just a few years later, the Fee is responsible for over $300,000 in new funding, a number that will grow considerably in the next few years as the Student Activities Endowment matures and begins drawing down annual returns. The Student Activities Fee and Endowment revolutionized the way student groups worked on campus, allowed for an enormous expansion in their numbers and sizes, and ultimately gave the student body more control and say in the way their clubs were run. In the coming year, the Student Association will work to make sure that the power to manage and divide up student funding remains in the hands of accountable members of the student body, and that the Student Activities Endowment continues to be invested and grown appropriately."
Apr 23 2009 at 6:24 p.m.
Diogenes, you're incorrect. The endowment you're referring to is very different from the Reserve Fund.
The Endowment is a completely different pool of money that is invested and gets interest returns, etc. Eventually that endowment will start drawing down revenue which will then go to pay for more student needs, etc. That fund has specific sources of revenue, an investment plan, and a purpose. It was, last time I checked, at just under $2 million.
The SAC Reserve Fund is NOT an endowment and is not the same pool of money. It is a checking account with a couple hundred thousand dollars in it, sitting and earning zero interest. It has been sitting there longer, in fact, than the endowment has existed. If it had been invested like the endowment, it would have probably doubled in size in the last 10 years. It has no investment plan, there's no justification for it, there's no plan for how to use it or eventually deploy it. It's just sitting there, the result of accruing budget surpluses over the years. The Endowment was created by a student referendum; the Reserve Fund was the result of SAC hoarding its leftover money at the end of the year and was in fact Top Secret until GUSA audited SAC last year. Until that happened, students were told they weren't allowed to know about or discuss the SAC reserve fund.
So, they could not be more different. In fact, one of the major proposals for what to do with SAC's reserve fund is to roll it into the Student Activities Endowment so that it can earn interest and go towards the long-term needs of the student body -- which is not what it's doing now.
Sorry for the confusion, but they are completely different (and diametrically opposed) things. GUSA created the Endowment through a student referendum, not the SAC reserve fund, which accrued in secret for years and years.
May 11 2009 at 10:45 p.m.
Student groups can meet in the night clubs,if is not allowed to meet in the student clubs.:)