Last year, the ASUO spent hundreds of thousands of dollars it didn’t have, officials in the student government recently learned.
The exact amount of the overspending is not yet known, ASUO President Emma Kallaway said, but sources estimated it at $400,000. The money was used to give students a $100 fee reduction during the spring of 2009.
An error when calculating the amount available to reduce the fee caused the problem, Kallaway said. Sources who requested anonymity because the information had not yet officially been released said a University employee who worked with the ASUO made the error. The person named is no longer employed by the University.
The money that was supposed to pay for the fee reduction came out of the ASUO’s over-realized fund, which is generated when the ASUO receives more money than expected from student fees, usually when more students attend the University than the number used to calculate the ASUO’s budget forecasts. The 2008-09 over-realized fund was massive by ASUO standards, valued in millions of dollars, and then-President Sam Dotters-Katz decided to use the money to reduce student fees.
However, the estimates used to calculate the reduction were inaccurate, which led to the overspending.
To solve the problem, the ASUO will likely use money from the coming year’s much smaller over-realized fund, estimated at $150,000, and funds from the ASUO’s prudent reserve fund. The prudent reserve is a rainy day account equal to 5 percent of the ASUO’s budget.
The ASUO will then have to deal with how to regenerate the prudent reserve. Among the options understood to be proposed is that the ASUO request reimbursement from the administration or that it enact direct, limited- or one-time taxes on student fees.
Kallaway said she favors using ASUO funds of some kind. “It was an accounting error and I’m perfectly happy to deal with any position that’s left by the last administration.”
However, Sen. Sandy Weintraub, who opposed the fee reduction in the beginning, said he opposes using ASUO dollars to pay for the error if it was made outside the ASUO. “I don’t believe that, if that’s true, the burden should be put back on the students,” he said.
The problems now facing the ASUO are forcing officers to re-examine the idea of direct fee reductions in the first place. The 2008-09 reduction was the first of its kind, but ASUO officers remained in qualified support of the policy.
“I think over-realized buydowns really make sense,” Kallaway said. “You need to be well-protected in the prudent reserve. We also should not buy down over-realized to zero because that’s definitely not safe, that’s not smart, and I think that’s just a mistake that was made.”
But any discussions over future fee reductions are moot, for the moment. To make the change permanent, the ASUO would have to change the Clark Document, which defines its relationship with the University.
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