RCA to Examine Student Group AccountsBy Rishi Shrivastava
Because many student groups have been operating with negative finance balances, the Office of the Dean for Residence and Campus Activities has initiated efforts to help them maintain balanced budgets. However, the Undergraduate Association Financial Board, the other source of student group funding, is not taking similar measures.
Student groups can turn to two sources for outside funding: the RCA student activity account and the UA Finance Board. The two offices work separately in determining funding allocations.
In order to improve communication between the two offices, Finboard recently moved its office from the fourth floor of the Student Center next to the RCA office on the fifth floor.
In the RCA's view, student groups that run deficits indirectly hurt other groups that are financially responsible because all of the money RCA allocates is pooled into one account, according to Susan D. Allen, adviser to student activities.
UA President Hans C. Godfrey '93 finds this financial irresponsibility unacceptable and said student groups "shouldn't have negative balances to begin with."
Still, the Finboard is not following RCA's actions and will not look thoroughly into student group finances. The UA gives money to student groups for specific purposes and does not care to know the methods by which these groups obtain outside funding, said UA Treasurer Raajnish A. Chitaley '95.
The UA must not look into the student activity accounts, said Finboard Chair David J. Kessler '94. Many groups have threatened to open outside accounts if the UA were to do that. These accounts would be in the names of individuals within the group which could "increase the propensity for corruption" and mismanagement, Kessler said.
Because MIT does not want to be held liable for mismanaged accounts, most student groups are not permitted to open collective group accounts outside the Institute. Also, MIT would like to see student groups maintain proper balances by acting financially responsible in a regulated setting, Kessler said.
RCA requested an audit
The RCA's efforts to improve student activity accounts came after the RCA Office asked the MIT Audit Division to look over their finances in April, Allen said.
The audit revealed that many student groups ran negative balances. Allen would not say how many groups maintained negative balances because the groups are currently in financial transition. Several groups that run deficits are unaware of their financial difficulties, she added.
The student activity account is entirely separate from Finboard. It is comprised of money obtained from off-campus donations, donations from Institute departments, fund-raising, and various other sources.
RCA gives this money as a "temporary advancement," which the group must pay back in full after it completes its fund-raising activity, Allen said. For example, if a group needed money to hire a band for a fund-raising concert, RCA would loan them the money. The student group would then be expected reimburse RCA.
RCA is helping student groups exercise fiscal responsibility by advising them on how to maintain at least zero balances, Allen said. "The goal is for everyone to work in a positive balance," she said.
RCA also plans to inform groups when their fund-raising efforts are ineffective because "groups need to know when their fund-raisers are not working."
Finboard funding, on the other hand, is allocated in the forms of grants, no interest loans, and capital investments, which the UA owns. For example, if the UA were to invest in a podium for the debate team, the UA would own the podium (a capital investment). Finboard only offers funding to student groups which consist of at least 50 percent undergraduates.
Finboard receives all of its money for allocation from Arthur C. Smith, the dean for undergraduate education and student affairs. Smith gave Finboard $84,500 for fiscal year 1994, Kessler said.
This 1994 funding level is 6 percent greater than fiscal year 1993's allocation, the rate at which tuition increased, he said. This increase came at a time when Smith's overall budget decreased. "Dean Smith should be commended for that," Kessler said.