The undergraduate student government has struck gold. And it’s all thanks to a series of accounting mistakes.
Over the past three years, UCLA collected the Bruin Bash and the Arts Restoring Community fees, but did not distribute the collected sums to the Undergraduate Students Association Council. The council operated on a diminished budget over this period, unaware that a portion of its budget was missing, but has since come upon more than $741,000 in surplus funding for this year, instead of the originally intended $279,000.
Had USAC not been starved of this money, it would have, over the past four years, allocated up to $441,000 toward its endowment.
The council now has this money on hand, and is frantically trying to figure out what to do with it: Some council members argued the funding should go to make up for supposed unforeseen expenses in events held earlier in the year. Others have argued the funding should go to fund university services for undocumented students.
This is $441,000 in student fees that collected dust thanks to UCLA not being able to do standard bookkeeping correctly. While USAC and UCLA certainly can’t make it up to Bruins who have already graduated, the council can invest in future classes and give this money directly to those who truly own it: students.
USAC should allocate $441,000 of its surplus to its endowment. Such a move would expand the endowment to over $636,000 – a staggeringly large endowment for a university student government – and could generate returns totaling more than $29,000 a year. This money should then be given back to students by funding scholarships and institutionalizing funding for essential university services.
[Related: UCLA acounting mistake resulted in large sum taken from USAC]
Adding to an endowment might not sound appealing to students, but the benefits are far-reaching. Roy Champawat, director of the Student Union, said that because the endowment was too insignificant before this year – only $163,500 – the council usually chose to reinvest the generated payouts.
But the council now has a chance to create an endowment that produces significant returns. Champawat added that if the endowment becomes significantly large enough, the council should budget payouts from it every year.
$29,000 might seem a small amount in comparison to the council’s more than $8 million in revenues, but it still opens up avenues toward certain discretionary uses. For example, USAC voted at Tuesday’s council meeting to allocate $100,000 from its surplus to the Undocumented Student Program, an arm of the Bruin Resource Center that aids undocumented students.
Similarly, the council could also use these funds to pay for student scholarships. Council members have, in the past, opened up scholarships meant for transfer students or commuter students, but the awards were either too small or too few to help enough people. Endowment payouts, however, provide a more stable source of funding for such programs.
Budgeting endowments payouts as a kind of discretionary fund would give the council the flexibility to determine how to use its payouts from year to year, while preserving the longevity of the funds.
Politics is usually about short-term goals, and USAC could certainly blow off its surplus funds this year. But the council has a golden opportunity to buck that trend and invest in future Bruins – and it should have no doubt taking it.