Photo by Autumn Walter |CIGAR|
Student Senate mishandles club organization external bank accounts
For at least the past three years, miscommunication between members of Student Senate and various student organizations has led to a failure of regulating external bank accounts.
An external bank account is any account used for finances in which the flow of money does not go through Senate finance process. Organizations are able to have as much or as little money in this account as they want, as long as monthly statements are submitted to the Senate finance chair. According to the Senate Finance Handbook, “detailed account statements must be submitted to the Finance Committee monthly.”
This process is done to ensure that all student money is budgeted correctly and all organizations are acting as non-profits, something that is required by Senate. If an organization’s finances are not kept track of, Senate could budget incorrectly due to a lack of knowledge. There are five known organizations at the University of Rhode Island that have been identified as clubs with an external bank account. Those organizations are: Brothers On a New Direction (BOND), Powerful, Independent, Knowledgeable and Notorious Women (PINK), Student Alumni Association (SAA), Interfraternity Council and Panhellenic Association.
Each school year, Senate allocates funding for each organization based off of their needs. The danger of not regulating external bank accounts is budgeting inequity. Budgeting inequity occurs when one organization receives more funding than others due to a lack of knowledge about their financial status. Samantha King, current Senate Finance Chair, told the Cigar that she has not received monthly statements from these organizations during the 2017-2018 school year.
However, this error in oversight can be traced back through the past three finance chairs. The finance chair before King, Ryan Buck, who is currently Senate President, received no monthly statements regarding the status of any of the five organizations’ bank accounts.
“I think the reason I kind of dropped the ball on it was I had some other things going on,” Buck said. “Second semester I focused mainly on budgeting, and then first semester I had a lot of groups coming in continuously week to week looking for contingency grants.”
Even though Buck failed to acquire the bank statements from organizations, the Senate Finance Handbook clearly outlines that groups with external bank accounts must submit monthly statements.
“In the Finance Handbook it says that any group with external bank account needs to be submitting monthly bank statements,” King said. “That has been the case to the best of my knowledge for the past three years but no one’s been enforcing it.”
The reason why these detailed statements matter so much is because Senate operates as a 501(c)(3) non-profit organization. As a result, the organization is federally recognized as a non-profit and they pay very little to no taxes. Any group who is recognized by Senate must be operating with a non-profit status. Currently, each student pays $88 in student activity tax. If Senate were to lose this 501(c)(3) status, students would need to pay much more in order for organizations to receive the same amount of funding because more money would need to be paid to the federal government in the form of taxes.
“If they are operating as a profit organization with their [external] account we can’t necessarily see it,” King said. “But if they are trying to operate as a profit in our account system we can see it. We could lose our 501(c)(3) status.”
Miscommunication is largely to blame for a lack of regulation when it comes to external bank accounts. A mid-semester transition between finance chairs made it difficult for all processes and regulations to be adequately maintained.
“I think it was really just lost in transition,” Buck said. “I think where it got lost is when the previous finance chair dropped Senate halfway through his term. I think there wasn’t a lot of time for transition, and that component wasn’t really addressed.”
Interfraternity Council and Panhellenic Association are two other organizations at URI with an external account. Dr. Stephen J. Simo, assistant dean of students, has said that there was a compact in place until 2007 that required Greek Life to submit finances on a regular basis to Senate. However, the compact expired and no new compact was written, leading Greek Life officials to believe that monthly statements were no longer required.
“There has been no new compact signed, so there hasn’t really been a reporting mechanism,” Simo said.
However, as previously stated, King mentioned that the Senate Finance Handbook states any organization with an external bank account must be submitting monthly finances to avoid budget inequity.
King said that when budgeting is finished, organizations with an external account, who fail to provide financial statements by March 21 will not receive any money from Student Senate.
“Come budgeting, we’re going to say if you are a funded organization with an external bank account you need to submit your bank statements and if you don’t, you won’t get a budget,” King said.
Two of the other organizations with an external bank account, PINK and BOND, decided not to comment on the situation. SAA has said, “As part of the original recognition process, the confirming recognition from the University of Rhode Island Student Senate states ‘Student Senate, Inc. has no interest in other accounts that SAA uses (Alumni Association), or how those funds are used, as long as SAA is recognized as an ‘unfunded affiliate’. Student Senate, Inc. will not be involved in what or how SAA does their programming, that does not include Student Senate, Inc. funds.’”
Cody Anderson, who was the finance chair before Buck and graduated last spring, could not be reached for comment on Student Senate’s failure to regulate the accounts during his term.