IAA may have misused $3,492 in SAC funding

and Peter Morrison The International Affairs Association may have misused $3,492 of Student Activities Council funds, according to an independent investigation conducted by The Daily Pennsylvanian. The potential abuses include overspending for office expenses, printing and duplicating; travel; and using University funds for personal phone calls. A similar inquiry conducted by the Undergraduate Assembly's Budget Committee last month found that the group spent $1,500 inappropriately. But a subsequent SAC Finance Committee audit of the IAA's financial records, requested by the IAA itself, largely cleared the organization of any wrongdoing. Following both the UA and SAC Finance audits, the Office of Student Life -- which administers all SAC groups' monies -- transferred more than $1,100 from the IAA's own account back to SAC for what SAC Finance has termed "administrative accounting errors" in OSL. Although this seems to demonstrate that SAC had paid for expenses it should not have, IAA President Brendan Cahill, a College senior, believes SAC Finance's audit has completely "vindicated" his organization. The SAC audit states that "to attribute these [accounting] errors to 'fraud' or 'theft' on the part of IAA, is irresponsible and unprofessional." SAC's audit revealed discrepancies about what SAC paid for, but found that these inconsistencies did not prove any intent on the part of the IAA to defraud SAC. Allegations concerning misuse of funds may be moot, according to SAC Finance Chairperson David Shapiro, a College and Wharton junior. Shapiro said that any discrepancies between groups' SAC and non-SAC accounts would be reconciled during SAC Finance's carryover-deficit process. During this process, normally conducted in September, SAC liaisons examine all financial records of SAC groups to determine if SAC paid for expenditures it should not have. But the DP's investigation revealed serious concerns about the accounting procedures used by the IAA, SAC and OSL. The investigation is based largely on public records available from OSL. Cahill said it is not IAA policy to disclose its own financial records to the public. The IAA was originally budgeted $23,695 to cover organization expenses including seven model United Nations conferences. But the IAA did not attend three of the seven conferences, so $8,910.10 originally allocated for these three conferences was retained by SAC. The funds the IAA was entitled to spend after eliminating these three conferences was $15,584. According to OSL records, the IAA spent $15,681 of SAC money during 1994-95, which appears to put the IAA right on budget, but the DP's investigation found that the group possibly should have spent even less SAC funds. Shapiro said that discrepancies in OSL's books may appear because SAC Finance does not reconcile groups' books until the end of an entire academic year. SAC Steering Chairperson Graham Robinson added that inefficiency in the OSL may also lead to funding errors. In its budget request to SAC, the IAA asked for $300 in SAC funding to pay for 12 months of long-distance phone calls during 1994 and 1995. Refusing to pay for calls not made during the academic year, SAC allocated the group only $200, enough to cover eight months of calls at $25 a month. The IAA actually spent $505.61 on long-distance phone calls, including calls during late May, June, July and August, according to OSL records, which amounts to $42.13 a month for 12 months, much more than the $25 a month allocated for only eight months. Some of this money was spent on personal calls to IAA board members' parents and friends, according to detailed Penntrex phone records. SAC paid for all of these telephone calls under the broad budget category of "Office Expenses," according to OSL records. Cahill said when the IAA plans model United Nations conferences it is difficult to predict how much long-distance calling will be necessary to coordinate the meetings. He added that calls were made over the summer by the group's secretary general in preparation for a conference at the University in November. Cahill denied that any IAA board members placed personal phone calls from the group's office, but records indicate that he himself made at least two personal calls to his parents (See sidebar, page 3). And one IAA member who asked not to be identified suggested the IAA may not be so serious about preventing SAC funds from being spent inappropriately. "A joke which has been circulated among the International Affairs Association crowd is that it doesn't really matter how much money we waste at our away conferences, because we're SAC funded," she said. The IAA member explained that while attending a conference in the Northeast, club officers asked delegates to turn in receipts for everything, including "recreational taxi cab fares, personal souvenirs and meals -- so that the club could be reimbursed for these expenses." SAC's own rules prohibit reimbursing groups for personal expenses and meals. The DP's investigation revealed questionable travel expenditures that may substantiate this IAA member's claims. SAC allocated $1,000 for half of the travel expenses the IAA expected to incur to attend its conference in Washington, D.C. SAC also allotted an additional $2,000 to cover half of the hotel expenses for the IAA's delegation at the same conference. SAC policy states that it will fund half of groups' travel and hotel costs, and that the individual groups must raise the other half. But the travel expenses for a train and bus to that conference actually cost only $1,300. Therefore, SAC paid only $650 -- $350 less than expected. The IAA's hotel expenses cost $5,200 -- $1,200 more than expected. SAC, therefore, paid $600 more than the $2,000 originally budgeted for hotels. Ideally, the IAA should have paid the $600 difference from its own non-SAC revenues and should have returned the unspent $350 to SAC. Instead, OSL documents seem to show that the unspent $350 was used to make up part of the deficit incurred from overspending on hotels. Cahill said the original hotel where the IAA delegation planned to stay -- The Washington Marriott, where the room rate was $116 per night -- was overbooked. As a result, Cahill said 16 delegates were forced to rent four rooms at One Washington Circle Hotel where the rate was $145 per night. Not only did SAC pay for these additional hotel rooms, but copies of hotel receipts on file at OSL seem to indicate SAC paid $9.21 for a movie IAA members charged to one of their rooms. The DP's inquiry has uncovered other questions about IAA travel expenses as well. OSL records indicate SAC paid for half of taxi expenditures and 319 miles driven in an IAA board member's car at $.30 per mile during a conference in San Francisco. The SAC allocation for travel to this conference was $1,908 for plane travel, not taxi or car travel. Cahill insists that the taxis and private car mileage were paid for from the group's non-SAC account. For the same conference, SAC granted the IAA $1,900 for half of its airfare. Receipts on file at OSL show the actual cost to SAC was $1,450. Records indicate that the $450 that SAC should have saved was still spent in other categories. Also at the San Francisco conference, SAC overpaid $350 for hotel expenses. SAC had originally allocated $500 for half of the group's hotel cost, but paid the additional cost when the total hotel expense came to approximately $1,700 rather than the expected $1,000. In another example, SAC's allocation for 48 delegates to attend a conference at Harvard University was $2,010. But OSL records indicate the actual cost was only $1,270. Cahill explained that the IAA sometimes requests more money than necessary because some IAA members who sign up to go to a conference later change their minds. Again, OSL records show the excess funds may have been spent in other budget categories. Shapiro said SAC groups are allowed to transfer up to $50 from a surplus budget category to a deficit category. This may explain some of the discrepancies. But there are also concerns about the IAA's printing and duplicating expenditures, the DP's audit reveals. The IAA overspent by $241.12 for printing and duplicating. The IAA accounted for all of these expenditures with receipts turned in to OSL. Many were similar to IAA receipt no. 3499, which was labeled simply "Copy expenses at Kinko's." The receipt provides no indication as to what material was being copied or for what purpose it was duplicated. Cahill explained that printing expenses often cannot be accurately predicted because of the vast amount of paperwork that must be done for the conference held at the University and for any conferences the IAA attends elsewhere. Editor's Note: Peter Morrison is editorial page editor of the DP and will not participate in any potential editorials on this topic.

Please note All comments are eligible for publication in The Daily Pennsylvanian.