£384,000 skeleton in Union finance closet
Union budgets are already under strain this year after an audit of the Union’s accounts brought to light a mysterious lack of reserve funds. The deficit of £384,000 was traced to a decision taken two years ago to dip into the General Reserve, an amount designed to keep the Union financially solvent in the case of a catastrophe, in order to partially fund Phase 1 of the Beit Masterplan.
The Masterplan is the long-term redevelopment plan for the main Union buildings and Quad that started work in summer 2006, and is designed to update our ageing facilities. The decision to dip into the fund was taken two years ago by Union Council, which at the time was the supreme governing body of ICU, under the control of Union President Sameena Misbahuddin and Council Chair John Collins.
Investigation into this allocation of funds is ongoing, but there is confusion over how such an ill-advised decision was taken by the 2005/06 Sabbaticals with so little discussion appearing in the official minutes, and without a vote being taken specifically on the issue. The current Union Deputy President responsible for Finance & Services, Chris Larvin, has stated that this decision “should never have been authorised,” as it has left the Union General Reserve with only £400,000 at present. The estimated “healthy” amount for the Union Reserve is just under £1million.
Revelation of this substantial financial hole so early in the year has hit the Union hard, and could affect spending for several years to come. “It looks like we’ll all have to tighten our belts this year”, said Union President Stephen Brown. Spending controls are expected to be tightened across the Union following the news that it is considerably less financially secure than it was originally thought. Clubs and Societies are being urged to only spend if they are certain that they can afford the expenditure from their current balance.
How long it will take the Union to replenish its emergency reserves remains to be seen. The extent of the damage is still being calculated, and initial reports on repercussions are mixed, but an air of caution pervades the Union until a full assessment is completed.
The hole was discovered following scrutiny of the Union accounting system prior to an updating of our currently arcane financial arrangements. Sources close to Beit Towers (home of the Union Sabbatical Officers) say that this lack of diligence by Council is precisely the reason that the Trustee board is being created and given supervisory control of major Union expenditure in the future.
