Our funding system for student groups is broken. This past year, over half a million dollars budgeted to student groups went unspent. That means nearly one fifth of the total funds budgeted –$2.5 million–was not used. Ostensibly every dollar allocated by the ASSU must go toward a particular item in the budgets submitted by student groups. But on average, 20 cents of every dollar allocated was not used, and therefore, not pressingly needed. Doling out unnecessary funds, coupled with the fact that we pay more than many of our peer institutions, suggests we have a serious problem to address.
The problem is not so much that student groups don’t know how to write accurate budgets. That’s certainly true, but also understandable. For one, many students don’t have experience in this area, and the workshops offered to train Financial Officers – in the experience of Review board members – were woefully inadequate. More broadly, there is an obvious structural flaw in the system: groups must submit budgets a full year before they actually use the money they request. Most recently, VSOs submitted budgets to the ASSU last quarter, but those budgets will only come into effect fall, winter and spring of next year. Even the most experienced budget-maker cannot claim clairvoyance: who knows what particular logistical needs will be relevant week 4 of spring quarter, next year? Student groups cannot possibly be expected to create accurate budgets so far in advance of actually using the money.
The real problem, however, is how we address this built-in structural flaw. Our current policy amounts to little more than turning a blind eye. As of now, all unused funds get channeled into student groups’ reserve fund at the end of the school year. And in following years, groups can draw on their reserves with far more discretion than the funding available from normal budgets.
This system is problematic for many reasons.
For one, outgoing seniors who pay for student groups out of their own tuition, do not see the benefits of the money they paid, nor are they refunded this money.
Second, the rules that constrain the normal budgetary process– which are largely sensible–do not apply to reserve funding.
Normally, student groups must request specific funds for specific purposes. They are given accounts–such as “event food” of “travel fare” — to cover the specific costs of programming, and the funds allocated to a certain account cannot be used to cover expenses of another kind. This makes sense. We don’t give student groups lump sums to use wantonly – we want to know they have a specific plan in mind, and largely stick to their plan. Drawing from reserve funds circumvents this constraint. Pools of money originally allocated for event food can be used for any other purposes, if the Undergraduate Senate, an elected body, approves requests for the use of reserve funds. In practice, however, such requests are generally approved. In effect, there is little force to demand that money be used for certain purposes, an insufficient way to hold students accountable to their original requests.
Thirdly, and perhaps most importantly, reserve funding allows groups to circumvent the democratic process that determines how much funding groups get in the first place. When students vote on special fee budgets, they vote on allocation of money into particular accounts. Robust reserve accounts allow groups to distribute funding without the *direct *consent of the student body that we normally require.
The student body, for example, might vote for a group to have enough funding for event food. They might not approve, however, of using their tuition for group member salaries. Under the current system, there is minimal protection against the possibility of such abuses.
Admittedly, not much money is at stake here, especially compared to how much we give Stanford overall. But the issue is this: there’s an apparatus to legitimize how we support student groups, and it’s broken. We should fix it, because it’s easy to do so, and because it’ll make the apparatus actually legitimate.
The editorial board of the Review proposes the following, easy solution; at the end of the school year, the ASSU should take unused funds out of student group accounts. The most immediate effect of this policy will be to incentivize– student groups to operate more efficiently–they should only request funds they strictly need, and should not feel like there is no penalty for failing to use the money students chose to pay for programming on campus. Beyond changing the incentive structure for groups, the unused money could be put to better use than is currently being done. First, it could be refunded to students, particularly outgoing students. Second, it could be allotted to the Senate or the Executive, more so than any one particular student group. The former represent the entire student body, so from a democratic perspective, their discretion is more acceptable than that of any one particular group.
We acknowledge that there are objections to the above proposed solution. First of all, one could argue that without reserve funds, groups would be constricted from spending money for unforeseen circumstances. Secondly, our proposed solution might incentivize student groups to spend all their leftover money in ways not necessarily beneficial to the student body. Our proposed solution, however, is indeed a step in the right direction towards greater accountability and transparency on the part of student groups. As always, we hardly claim to exhaust the detailed scope of this issue; more to raise it as a topic of discussion and urge our peers to demand more efficiency in how our money is spent.