Students’ Council passes audit after only receiving documents minutes away from vote

The University of Alberta Students’ Union passed its 2018-19 audit in under 11 minutes of discussion after having only received the internal documents five minutes prior to the vote.

A clerical error prevented the audit documents from being included as part of the official order papers. Samantha Tse, audit committee chair and education councillor, introduced the motion to approve the audit when council expressed disdain over voting to approve the audit without even seeing the documents.

The audit was approved with 16 voting in favour and five opposed. All executives voted in favour.

Every year, the Students’ Union (SU) undergoes an external audit to assess its financial status and viability while also identifying any potential risks to the organization. This latest audit was presented to Students’ Council at their meeting on October 22 in the last 11 minutes of the meeting, despite it having to be passed at that meeting in order to prevent any adverse consequences to the organization.

Katie Kidd, education councillor, said if the audit did not pass at the meeting, employees at the Students’ Union would not be getting paid.

Students’ Union president Akanksha Bhatnagar said council cannot approve any documents without seeing them beforehand. She asked Tse to forward the documents to council members by email as debate on them was occurring.

“Can you forward it [the documents] now, because we cannot approve documents we do not have.”

Adam Brown, vice-president (external), agreed and said he would not vote in favour unless he read the materials.

“I cannot vote in favour if I haven’t read it,” he said.

Tse responded that she believed council would take audit committee’s word after it passed the audit. She sent the documents to council members while they discussed the motion; five minutes prior to the vote which ultimately approved the audit.

Juan Vargas Alba, arts councillor, said he would not vote in favour of passing the audit. For him, voting against it had nothing to do with the finances, but the “failure” of the governance process.

“I did not have a chance to look at the whole thing,” he said. “I think it is really bad governance to push something so important to the last minute.”

“This cannot become the norm for council.”

Bhatnagar agreed with Alba, but said council as the body overseeing the Students’ Union and, personally, as an executive she would have to vote in favour of the audit despite the “poor governance” process.

“It is really bad governance to submit an audit with ten minutes, and have to approve pages and pages of documents. But I will be voting in favour of it as per my responsibilities… for the organization.”

Tse apologized to council for not noticing the clerical error resulting in the documents not being included in the meeting materials for Students’ Council. She added that the documents will be made available for the public in the next set of order papers for Students’ Council’s next meeting on November 5.

The Gateway received a copy of the entire financial audit after the council meeting. It included three sets of documents, totalling 77 pages. 

Audit recommends two courses of action to prevent financial risk

The audit found no major concerns with the Students’ Union finances and practices. It offered two recommendations to enhance “other control deficiencies” it identified which do not comprise  a “significant deficiency,” but could pose financial risks.

The first was with regards to Students’ Union IT management. In 2017, the SU had a server failure which erased data within its accounting system, right before the scheduled audit. At the time, the last server backup did not include the latest information as it had not occurred for over a year. The servers were sent to experts who were able to recover all information. In that year, the audit recommended drafting formal policies outlining how often scheduled system backups should occur.

In 2018, the audit noted the Students’ Union had begun drafting policies for data management, however, they were not complete. It recommended the organization continue to draft the policy but finalize it so it could become operational.

The 2019 audit noted again how policies were still “in the process of being finalized.”

The second recommendation was for the SU’s Students’ Involvement Endowment Foundation (SIEF), which is used to support the awards the organization provides to students. The audit said SIEF is “not in compliance” with Canada Revenue Agency (CRA) regulations on charitable distribution quotas. 

“We noted that SIEF is not in compliance with the charitable distribution quota, and has fallen short by 0.29 per cent and 0.30 per cent in 2018 and 2019, respectively,” the audit document read. “The consequences of having such a shortfall could lead to the revocation of the charity’s registration.”

The audit said that the permits if an excess is encountered that the funds could be carried back to the prior year to cover any shortfall. It recommended the SU account for this by the end of its budget year in April 2020 and ensure it is aware of this rule every year when preparing its budget to ensure it is complaint with CRA regulations. 

Tse said both recommendations were sent directly to the Students’ Union General Manager, Marc Dumouchel. 

“He is aware of them, and we will move from there as an organization,” she said.