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September 7, 2009 | by  | in Opinion |
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Soapbox

Every student at Vic is being royally ripped off by VUWSA. I have been apathetic and resigned to my association’s bungling incompetence for years, but while I was writing my Masters thesis I got so desperate to procrastinate that I spent some time reading the 2009 VUWSA budget and this is what I saw:

VUWSA has $1.5 million dollar revenue from our $130 subscriptions after GST and the Ngai Tauira contribution. Out of this, the amount that gets spent on administration + the exec is (stop and make a guess) $1,100,000!

1 million dollars!

This means every year, every student here pays $93 dollars for VUWSA administration and exec expenses, and only $37 of dregs goes to funding the pathetic services that VUWSA provides. I, like almost everyone who has been here for more than one or two, years was resigned to stumping up my $100-plus every year for nothing.

But 1 million dollars being wasted is too much.

Put facetiously: Imagine the exec was efficient and costs were around 20% of revenue ($300,000—an arbitrary figure—but even doubled the following argument holds). That equates to a saving of $800,000. So if the president of the newly efficient association was to be paid a $200,000 salary and buy a 2009 Aston Martin Vantage [!] for another $220,000, students would be better off by $380,000, or roughly $30 per person. No shit.

Whether you are a capitalist, a socialist or (most likely) an apathist, this should be sickening to you. I expect there will be some half-assed letter full of half-truths published by an exec member trying to justify their wastage. They needn’t bother: 71% of a $1.5 million dollar budget being frittered away on operational expenses is unacceptable. The figures in this article are taken from the 2009 VUWSA budget and the data shown overleaf, along with some graphs—there simply isn’t room for argument anymore.

If you are pissed off at finding out that the $130 you stumped up gets wasted, stop reading now. Have a bitch to a friend about VUWSA wasting a million bucks taken from students. Better still, write an angry tirade to Salient entitled 1 million dollars. If you want to be clued up about the details, read on. But have an angry spiel first.

FAQs

Where are the costs coming from?

Short answer: Overstaffing and wastage. VUWSA budgets since 2007 have not had expense codes or comparison between the budgeted and previous actual year, so it is difficult to break down the expenses. However, total salaries paid by the association (not including Salient, which recoups most of its costs through advertising) total to somewhere between $530,000 and $600,000. Computing expenses as part of general administration (i.e. not including the handbook, Salient, student guide, rep groups, women’s group, education, campaigns, or clubs—so essentially, the cost of VUWSA paper pushing) is approximately $100,000. Some questionable (but possibly difficult to reduce) expenses include bad debts ($20,000—who borrowed money from our association?), and $11, 700 for running and maintaining the van. $120,000 (part of the administration budget) goes towards running the Student Union building and cannot be reduced.

What is being done about it?

Short answer: not much, at least at the moment. Jasmine Freemantle has established an auditing committee and has stated that it will have numerical budget targets, but these will not come into effect by 2010. The paucity of VUWSA’s record-keeping means that the true costs involved will be difficult to identify and eliminate.

In VUWSA’s defence, Jasmine says that actual administration costs look larger than they are by the weird budgeting formerly employed by VUWSA (true), and that they also include costs of services that VUWSA provides. She has established a general manager, and realises the need for the separation of directorial and operational management, all of which is an improvement on previous years. However, she seems not to see a problem with clubs admin costs exceeding the amount of money actually distributed to clubs and she does not believe there is an overstaffing problem.

What could be done about it?

Short answer: Plenty, but it will be pushing shit uphill with a rake. This article isn’t going to address the pros and cons of the different approaches much, but its worth noting that 3, 4 and 5 (below) require reform of the VUWSA constitution, which is very difficult due to the vicious cycle of exec incompetence and student apathy that the association has been caught in for years. Chances are that unless drastic action is taken, student politics will ensure that reform momentum is lost and wastage will continue for years.

Possible solutions:

  1. Staff cuts.
  2. Computing and general cost cutting.
  3. Establishment of minimum accounting standards.
  4. Management reform, either based on a small, highly paid and skilled exec or a supervisory exec and a general manager
  5. Voluntary student membership.
  6. Intervention by the university.

My personal opinion: we need a huge helping of 1, 2, 3 and 4, introduced as quickly as possible. Failing that, 6. Failing that, 5.

A quick opinionated note about number 5: The people who publicly advocate this are generally inept right-wing ideologues much like the inept left-wing ideologues that currently waste $90 of your money every year. The last major attempt by these clowns to get on exec involved a $25 rebate and cutting of the few measly services we actually get as students, i.e. still wasting $90 per year, and with no services at all to show for it.

If you are curious, I would encourage you to try to make some sense of VUWSA’s budget, which is available online at their website. I look forward to responses to this article.

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Comments (12)

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  1. Max Hardy says:

    This is an under-researched, poorly thought-out, misleading piece of ‘journalism’. It is irresponsible. It reveals a distasteful lack of accounting knowledge. I am disappointed that VUWSA paid for the paper it was printed on. I am surprised it was allowed to be published. I do not want to dignify it with a response. However, I am compelled to, given the potential for it to promote misinformation.

    ——————————————
    What you say is not true:

    First, I would like to let everyone know that I am not defending the status quo, I think a lot of things need to happen, and that is why I ran for AVP.

    I do accept that the structure for the 2009 Budget was very ill-conceived and perhaps lead people, particularly those without accounting experience, at first glance to the conclusions that O’Connor has come to. To O’Connor and anyone else, if you would like help in understanding the budget, I would be happy to assist. I guarantee to students that the 2010 budget will be easier to understand.

    One of the main problems with the budget was the amount of core services that it grouped under the heading ‘Administration’. The reality is that ‘overhead’ costs (ACC, stationary, telecommunications, computing, legal etc.) were budgeted to cost the Association closer to $200,000 (and even some this includes services, such as legal costs associated with student advocacy and computing costs used by clubs).

    Our University Sport New Zealand levies, for example, are not overhead costs; they go to some of the important service that we provide students, such as University Games and Snow Games.

    It is incorrect to say that staffing is an overhead or administration costs. Staff are, indeed, the biggest and most important service we provide students. Services that staff provide include: education and welfare advocacy, activities organisation (such as orientation, re-orientation and events year-round), help to clubs and rep groups, organising events like the University Games.

    I believe that the Student Union Building is a worthwhile institution to fund. Students enjoy the building every day and I think that it is better that students have a say in its governance (and lets face it, if we didn’t pay for it, then the University would have to levy student fees anyway, just without the requirement for student consultation).

    Funding of student radio – VBC 88.3FM (also under Administration), I think is justified. They provide a great and relatively cheap service to students.

    I do not think many students would like to see the ceasing of funding to Student Job Search (also wasteful administration according to O’Connor).

    The computing expenses O’Connor highlights also include the use of our computing resources by many students, clubs and rep groups. As do the van expenses. Having said that, steps are currently in place to reduce these costs.

    NZUSA levies are not “Administration”; NZUSA provides student advocacy and organisation at a national level, and has won numerous policy concessions from government of all coulors, including interest free student loans. Students can also, at any point, request a referendum on membership to NZUSA.

    Your analysis of the bad debts line is actually quite funny. This may help – http://www.investorwords.com/384/bad_debt.html or try wikipedia.

    The other costs you have decided to call “wasteful administration” include the bus tickets, car parks and lockers.

    ————————————————-
    What is being done about it?

    It is very disingenuous for O’Connor to suggest that nothing is being done to enhance the efficiency of VUWSA. I have not received a single request from O’Connor asking for this information, and his assertions seem to have been based on a very brief conversation with the President.

    Surprisingly, some of O’Connor’s supposed “changes” are quite reasonable ones, and are currently being worked on. Minimum accounting standards for the Association should be in place before the end of the year. Computing costs and other overheads, are also currently under review, and some substantial savings being identified.

    Various reports have identified some weaknesses in VUWSA’s management structure. Huge improvements have been made this year, with the introduction of the Association Manager. The President and I would be very happy to discuss any proposal that O’Connor, or any other student, might have. It must be noted that, as happened last year, any proposed structure will be released to students for consultation.

    I do not believe that voluntary student membership is a good idea. It would jeporadise the huge range of services that VUWSA provides (which can’t all be measured on a budget), and, most concerning, would severely diminish any student control and student consultation of the University. What’s more, it would not mean any cost savings for students, because, I can guarantee that if the University attempts to make up for lost essential services, they will provide them more expensively and at a lower quality.

    ——————————————–
    Any questions or comments

    Show up at the VUWSA offices, give me a call, or an email.

    Here endeth the spiel,

    Max Hardy
    AVP, VUWSA

  2. Gibbon says:

    Max Hardy, were you elected according to the VUWSA Constitution?

  3. Fandango says:

    Gibbon, did you read and take on board any of Max’s contribution?

  4. Sean OConnor says:

    Shit man, patronise me some more!
    Note the ‘formerly’ in this sentence:

    “Jasmine says that actual administration costs look larger than they are by the weird budgeting formerly employed by VUWSA (true)” – so don’t take this so personally.

    I’m not saying that everything classified as ‘administration’ is actual admin, as I make clear in the second half of the article. But $600 000 on staff and 100000 on computing is LUDICROUS. Combine that with exec expenses and the case that VUWSA wastes money is incontestable. QED.

    I’m not advocating cutting JSUB or SJS. How many people does VUWSA employ, Max? That’s half the frigging problem. Yes, you need people to provide services. But shit man, look at clubs:

    Clubs admin is bigger than the entire clubs grant pool!

    *That’s* the sort of wastage that I mean. $600 000 on staff? I bet you anything that even half of that can’t be justified!

    I challenge you to do two things:
    1) Publicly justify that staff costs 600 000 rather than half that.
    2) Publicly justify that clubs admin costs more than what gets given to clubs.

    If you can do that without getting flamed by everyone, I will be very surprised.

    For the record, Max, from your speed to send me the budgets on request, I think you will be WAY better than Neilson and your commitment to make a good budget for the first time in years is commendable. But what I saw is what is going to become obvious to everyone when you do. If you start using your position to cut some costs now you will be ahead of the curve, because once people can see where the money goes, you’re going to have no choice.

    Parting shot about bad debt, because you patronised me rather than because large amounts of money are involved: Everyone knows that some bad debts are unavoidable for an institution VUWSA’s size. But we also all know that the $1500 Joel Cosgrove embezzled and is (presumably) now counted as bad debt wasn’t justified. So its only fair to wonder how much of that bad debt is normal business and how much is exec bastardry, right?
    Maybe an accounting student could tell us whether VUWSA’s bad debts are normal for an incorporated society of its size. Or you could assure evryone publicly that there are no more bad debts due to corruption or wastage and that they are normal expenses.

    Yours sincerely,
    Sean

  5. Hank Scorpio says:

    Nice to see the Admin VP putting an embarrassing amount of effort into responding to a unapologetic opinion piece called (dun dun dun) the SOAPBOX.

    Mind doing some work for students instead of slagging one of them off, bud?

  6. Sean OConnor says:

    One more thing thats worth pointing out:
    Over the years when people have bitched the exec out about costs they always point to worthwhile things VUWSA does – in this case VBC, lockers, etc. The point is that they make up stuff all of the budget. VUWSA is as fat as a hog. Trim the fat!
    -SOC

  7. Stephen Whittington says:

    You’re totally right on this point.

    As soon as someone starts to point out the enormous waste and overstaffing that occurs, the response is to point to other things that VUWSA does that some people probably support.

    The other absurd thing is that, despite the high levels of staff, they are virtually impossible to get hold of. I have called the VUWSA office 5 times in the past week, and had the phone answered once.

  8. Jemima says:

    “I am disappointed that VUWSA paid for the paper it was printed on. I am surprised it was allowed to be published.”

    You obviously don’t understand the point of Salient, Max. It is promoting debate and understanding. If you hadn’t been to busy taking offence at Sean’s opinions and composing your petty reply, you might have done some introspection and found that the reason why Sean’s opinions were uninformed was that VUWSA has being doing a piss poor job.

    Alienating one of your constituents in this way is tantamount to bullying.

    I applaud the editor for running a piece that goes contrary to the opinion of his bosses in the name of encouraging debate and interest in an area that students should be interested in. Salient does more to raise awareness about these issues and get people talking about them than I have seen the VUWSA exec ever do.

    Also you might want to check your ledger because last time I checked, VUWSA only paid for half the page it was printed on. Half of Salient’s costs are covered by advertising.

  9. Hank Scorpio says:

    Not off to the best of starts, are we Max?

  10. Max Hardy says:

    Hellow all again,

    Actually I think it has got off to very good start, and that I can make some very positive changes here at VUWSA. I don’t really mind the abuse.

    In regards to Hank’s first point, I see responding to student concerns and informing the student body of the financial situation at VUWSA as one of my core constitutional duties. That includes responding to Salient articles. I did not spend that much effort on this answer, as I had already thought a lot about this issue.

    Sean, I would be very happy if you wanted to come into the VUWSA offices to discuss this matter at any time. I appreciate that your concern is genuine. However, the reason I responded patronisingly and defensively to your article was because I thought it was irresponsible and misleading. However, I think we could actually have quite a constructive conversation.

    In regards to the “purpose of Salient”, I was disappointed because I thought that they could have published a more responsible, well-researched and non-misleading article raising these same issues. I was not at all disputing their responsibility to raise these issues.

    Given the level of abusiveness on these comments, I do not think it is a good idea to continue to engage in this discussion. However I am happy to address any questions that are posed in a constructive way that anybody sends me.

    I will, however, briefly respond to a couple of Sean’s comments:

    First, I am not suggesting that there are not inefficiencies at VUWSA, as with any organisation, however, I think that you have overestimated the level of wasteful spending and misrepresented your figures.

    Second, I am not really sure where you got your figures for clubs admin from. As I can see it, Clubs overheads were budgeted to cost about $9,000 and the Clubs grants pool was $94,900.00. Additional Clubs things such as NZU Cricket champs and Blues Awards were budgeted to cost about $15,000. This is not including University and Snow Games.

    Third, staff salaries were budgeted to cost $452,927. I think that much of these costs can be justified, yes. Staff are the core and most important service we provide. I am open to suggestions. However, you must understand the highly sensitive nature of this. Previous attempts to radically re-alter the staffing structure have proven to be ill-conceived and badly planned.

    Fourth, I was not around when the 2009 budget was set, so I cannot comment on why bad debts were budgeted at $20,000, however, I would assume that the figure is set high and the intention would not be to meet the figure. New debtor management procedures that we have implemented this year should bring this down. I do not think any “bad debts” have related to ‘exec bastardy’ at all, the current Exec certainly does not intend on writing off any money owed to the Association by Joel. I highly doubt the bad debts we do incur are a result of corruption (certainly none since I have been here). I am happy to discuss this more with you if you come in.

    Thanks everyone,

    Max

    p.s. Stephen – that is concerning, people have been in the office all week, although due to the break, our receptionist was on leave, which may explain this issue. You are welcome to make this complaint formally so we can review our systems.

  11. Michael OIiver says:

    In regards to the “purpose of Salient”, I was disappointed because I thought that they could have published a more responsible, well-researched and non-misleading article raising these same issues. I was not at all disputing their responsibility to raise these issues.

    A formal written reply rather than a pointless back-n-forth with a group of anonymous trolls may be the ticket? Just puttin’ it out there.

  12. Kate says:

    In regards to the “purpose of Salient”, I was disappointed because I thought that they could have published a more responsible, well-researched and non-misleading article raising these same issues. I was not at all disputing their responsibility to raise these issues.

    I’m sorry Max but despite your anal reply, if $1.1 million dollars is being spent on VUWSA admin and the exec then I want my $93 a week back, what a ridiculous amount of money to spend on something that lets be honest doesn’t benefit the students and hasn’t for a while, no need to mention the pimped out van or previous president Joel Cosgrove……..hmmmmmmm

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