UCD done a boo-boo, writes Dave Ryan, as he gives a quick overview/opinion piece on the UCDSU debt crisis
On April 12, UCDSU released their financial accounts to their Union Council, which detailed staggering SU debts amounting to €1.42m. The Union now require a bailout from the college, and ideas on how to service their enormous debts. The release of these accounts followed a period of speculation regarding the handling of the SU’s accounts. In perhaps the most intriguing story of the year, UCDSU must scramble to explain how and why one of the biggest SUs in the country slid into such catastrophic debt.
Even in a time of global financial strife, it is tough to comprehend how a Union who, according to studentnews.ie has an annual turnover of €4m, could mismanage funds so egregiously.
As with most catastrophes, a disproportionate amount of time has been spent identifying who is to blame, as opposed to actually figuring out a solution. The mess has been so grand in scale that it has required On the 12th, Gerry McNally of McNally Business Services Limited [the firm that carried out the financial report] said the SU didn’t have the resources to run a business this size. Details emerged during the presentation of the accounts that UCDSU had no accounting system or basic records, of finding accounting records, McNally said it was ‘a challenge in itself’. It seems that UCDSU’s accounting practises during the period in question (The last filing of accounts was in 2007/8) were negligent at best. One must wonder how the Union expected to run such a large enterprise with little or no attention paid to financial transactions. Although it must be said that the lack of accounting suits anyone wishing to avoid blame, as the absence of a paper trail makes it very difficult.
What must UCDSU’s creditors think of the revelations regarding their massive debts? One of the Union’s biggest creditors is USI, which makes their debt a national student issue. The USI is in the middle of a quandary itself, as its members attempt to decide what kind of third level funding they will campaign for. The last thing they need is for one of the country’s biggest Unions to go broke. One must also consider that for the first two years since the last filing of accounts, the period during which this debt was accumulated current USI President Gary Redmond was a part of UCDSU (as a Vice-President in 2008/9, President in 2009/10). This is not to say that Mr. Redmond in any way played a part in the eventual financial black-hole at UCDSU; the almost complete absence of record-keeping making any sort of blame-shifting is pointless speculation. But, at the very least it will be an issue of personal interest to Mr. Redmond for his own Union to be in such dire financial circumstances.
Two major issues can be identified as being major causes of the behaviour that created the debt situation at UCDSU. One is an alleged six figure sum incurred by the rescheduling of the UCD Ball last year. The other stems from a very basic accounting error. As Donie O’ Sullivan has written about in The College Tribune, SU President Pat De Brún has said that some of this money was lost through the assumption that all UCDSU’s activities were VAT-exempt, when in fact they weren’t. Surely when keeping the records for one of the county’s biggest students’ unions, one should operate under something more concrete than an assumption. The cost of this assumption was €400,000. The fact that this debt has subsequently been repaid does not excuse the fact that it was somehow allowed to happen. As pointed out in the comments of the aforementioned Tribune article, TCD uses a Union-employed administrative officer to keep track of the accounts. One would think, based on the lack of basic accounting knowledge, this would be an entirely more practical idea, particularly considering that of the alleged 22-23,000 bank transactions in the last four years, no records exist for 8-10,000 of them. A lack of understanding accounting practises is not to be admonished, what is though is having a go anyway.
One final thought to consider is the effect this has on current UCDSU President Pat De Brún. Mr De Brún’s SU have elected to shine a light on the disastrous state of UCDSU while still in office. And while it appears that the vast majority of this debt was accumulated before their term, a majority of people will be quick to saddle the current SU, particularly De Brún as its head, with the blame. Once again, the lack of accounting practises or record keeping prevents us being able to ascertain how much, if any of the financial problems of the Union can be placed on the current administration, but it must be said that it deserves respect the fact that they chose to shine a light on this issue, even if their hand was forced slightly be how bad the situation is.
There are more questions than answers raised by the release of accounts to Union Council, and this likely won’t be the last we hear from this story.
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