By: Amy Stupavsky
A new student budget report has its coauthors and UTSU embroiled in a finger-pointing battle, as it contains allegations that $200,000 in levies from the Health and Dental Plan budget were misallocated.
While UTSU claims that this is nothing more than misinformation and conjecture, students Jack Phelan and Mike Maher insist that the report is correct and yet another example of “creative budgeting” and a “culture of secrecy” at UTSU.
The report outlines UTSU’s operating budget and the $360,000 revenue value associated with the Health and Dental Plan administration. The contentious levy is the Health and Dental Plan Administrative Fee, at approximately $6 per semester, which is collected to cover plan expenses. The authors believe that operating costs of $360,000 cannot be reliably identified, and therefore the remaining portion must fund other programs. They wrote that this reallocation of funds is in violation of the “Policy for Non-Academic Incidental Fees.” They extrapolated a $160,000 actual operating budget, leaving $200,000 unaccounted for. Without access to actual figures or detailed reports, however, the numbers are based on conservative estimates.
Maher and Phelan are Innis College Student Society executives who have filed previous grievances with UTSU. The two began investigating UTSU’s budget allocations after the Annual General Meeting, when they learned that the auditor’s report did not look into specifics of UTSU’s policy spending. With a $1.8 million operating budget, they wanted to ensure that UTSU was adhering to its financial plan.
“We can say with certainty that those monies aren’t being spent on administering the plan,” said Phelan. “It might be an honest mistake, it might be legitimate expenses. We just don’t know.”
“It’s tantamount to going to a restaurant and being overcharged,” said Maher.
They sent the report to UTSU via FedEx on Jan. 19, clearly indicating that they wanted a response within ten days.
Fifteen days later at press time, they have yet to receive a reply. When they did not hear from UTSU, they contacted the provost’s office and the media.
“It doesn’t take ten days to answer a very simple budgetary allocation question,” said Maher. “That is most of the frustration. We were shown a total lack of respect.”
UTSU rejects the claims, citing false assumptions that have led to false conclusions. Executives said that the budget is clearly laid out and approved by the Board of Directors.
“There are no irregularities in our budget,” said Sandy Hudson, UTSU President. “It’s very clear from the report that they don’t understand the internal processes of the UTSU.”
The group said that Maher and Phelan erroneously relied on the GC policy to support their argument. “The section they refer to is for limited projects,” explained Angela Regnier, UTSU Executive Director. “The administration fee is not relevant to the section.”
The group said they started working on a response right away, but that other business took priority.
“We have limited resources and we’re busy,” said Hudson. “To give us ten days to answer and stop all of our other priorities is unfair. We’re not going to jeopardize our 44,000 members in order to respond to these ridiculous allegations.”
“If they had walked into the office and found me, I would have given them an answer in ten minutes,” said Adnan Najmi, VP Internal and Services.
UTSU uses a self-managed system to administer the Health and Dental Plan, rather than contracting out to a third party. They believe that this makes the plan more transparent to its members and more cost-effective, decreasing the administrative costs from between ten to 30 per cent to eight per cent.
UTSU executives could not offer a breakdown of the admin costs in its elaborate budget, but they said that they estimate the amount based on industry standards. Regnier said it would be “impossible” to assign a dollar amount because it varies from year to year based on how many people opt-out of the program, become part-time students, or drop out of the university.
“We’re not in a position to give raw numbers,” said Regnier, “but we’re confident that this is a reasonable fee to administer the plan. We feel confident with our projected numbers. We’re also confident we give the most coverage for the most economic price. We would never charge students more than it would take.”
Hudson said that by allocating only $160,000 in administration costs, Maher and Phelan have underestimated the figure.
As a $10 million service, the Health and Dental Plan requires serious due diligence. UTSU impressed that they budget conservatively and at a low risk to maintain fiscal health. They crunch numbers and receive feedback on a regular basis, presenting three budgets a year to the Board of Directors and U of T administration for approval. The organization’s auditors also approve of its budgeting process.
UTSU believes the report was submitted in bad faith. Hudson mentioned that Maher’s loss in last year’s UTSU election may have fueled the report as a desire for scandal. “It’s politically motivated,” she said. “It’s completely malicious.”
Maher denies that his motivations were impure, saying that he is a concerned student. While Maher admits that he may be wrong, he takes UTSU’s claim that it takes $360,000 to administer Health and Dental with a grain of salt. “There’s no way that’s true,” he said. “I reject that it takes one-ninth of their budget to operate the program.” Maher also said that the complexities of the budgeting process should be made clearer to students.
Both sides want to avoid a court case because it would only hurt students and divert resources. Hudson remains unfazed by what she calls “defamation.”
“The majority of students are very satisfied with us. That’s why I’m not too bothered by all this,” she said. “Maybe students will understand the intricacies of administering a Health and Dental Plan, and have a better understanding of how much time and effort goes into ensuring accountability and transparency with the money they entrust us with.”
The UTSU hopes for face-to-face dialogue instead of sensationalism in this matter. Regnier would welcome a meeting with Phelan and Maher.
“I will be making that appointment,” Maher said.
UTSU will issue a public statement responding to the allegations on their website by Friday.
This article was originally published on our old website at https://thenewspaper.ca/news/utsu-asked-wheres-the-money/.