UA Allocates Funds Held In ReserveDana Levine
The Undergraduate Association voted Monday night to allocate a $184,846.79 budget surplus, disbursing $106,453.16 and issuing a request for proposals to allocate the remaining funds.
The UA voted to increase its invested reserve, renovate the Small Activity Office, build new booths for lobby 10, allocate seed money to the Spring Weekend Planning committee, and allocate funds to ease the transition to a new funding system.
During the past three years, the UA has accumulated a $184,846.79 surplus as a result of student groups failing to spend all allocated funds. Under the previous funding model, unspent student group funds were left to accumulate for a student activities endowment.
“This is not practical -- it would require $5 million to endow our student groups. That would require a $50,000 surplus for ten years,” said UA President Matthew McGann.
Past regulations cause surpluses
In the past, UA regulations have prevented the allocation of more than 97 percent of available funds, which has led to massive surpluses.
In an attempt to remedy this, the UA decided implement a policy of overfunding, that would allow overallocation based on the unspent funding for the past term. To do this, the UA needed to allocate $23,560 to cover any unforeseen group spending.
This money would allow the overallocation to begin this Spring rather than in Spring 2001. “The biggest problem that the Financial Board faces is the lack of funding. We could use money left over each term to help groups in the future,” said McGann.
The UA Judicial Board recently decided that these funds may in fact be used in the same manner as uninvested reserve funds, which can be allocated by a two-thirds vote of the UA council.
UA requests funding proposals
The UA also issued a request for proposals to spend the remaining funds.
“The purpose of the UA is to fund student groups and also to be there in emergencies,” McGann said.
The council also voted to give $30,000 of seed money to the Spring Weekend Planning Committee, replacing the funds previously allocated by the now defunct large activities fund.
This will allow the Spring Weekend Planning Committee to make large cash expenditures in the expectation of inflows such as the sale of concert tickets.
Accounting mishap costs $20,000
Following the transition to the new SAP accounting system, the Financial Board discovered that $22,670.17 had disappeared.
“One big pot for everyone to dip into wasn’t a very good idea,” said Mendel Chuang ’02, the UA representative from the Finboard. Rather than taking an equal amount from each student group, the UA decided to use a portion of the excess funds to deal with this discrepancy.
The UA also voted to allocate $6,680 towards renovations of the Small Activity office, which would include replacing cabinets and putting locks on storage space and the front office. “This better use of of the office would alleviate the lack of storage space that groups do have at MIT,” said ASA president Jocelyn L. Wiese ’00.
The UA council also allocated $9,000 to replace the aging booths in Lobby 10. These booths, which cost around $900 each, are to be constructed by the MIT Hobby Shop. They are intended to be more comfortable and handicapped accessible than the current booths.
The UA currently has a group of funds marked as an invested reserve, money saved to cover any financial emergencies. The UA increased this invested reserve from $17,397 to $30,000, allowing for a two year buffer of operating expenses.
With the new model, the UA would be able to operate for two years without any MIT funding. Additionally, this would allow for the funding of student groups in the case that funding requirements were to exceed actual budgetary inflow.
“In the past we’ve been allowed to have a negative invested reserve because MIT wasn’t very good at accounting. It’s not likely that we’ll be able to go negative in the future,” said Nominations Committee Chair Christopher R. Rezek ’99.