The College Fix

‘Loophole’ has allowed ‘shell organizations’ to circumvent funding limits

Cornell University’s Student Assembly will crack down on a loophole that has allowed student clubs on campus to balloon their budgets through the use of “shell” organizations.

Upwards of 40 percent of student organizations requesting funds from the Assembly’s Student Activities Funding Commission may be fakes created to boost the funding of already-existing groups and clubs, The Cornell Daily Sun reported today.

The Funding Commission this week “requested the assembly create the Financial Organization Review Committee — a new joint auditory body staffed with the S.A. — to ‘weed out’ these shell organizations,” the paper reported.

“30 to 40 percent of the student organizations requesting SAFC funding” might be “duplicates of existing groups already receiving allocations,” The Sun reports. These groups “ballooned the SAFC budget by spending more money than the SAFC formally allocated to their individual group.”

From the report:

To close this loophole, the SAFC requested the assembly create the Financial Organization Review Committee — a new joint auditory body staffed with the S.A. — to “weed out” these shell organizations by reviewing their organizational structure, leadership and mission for similarities with other SAFC-funded student groups, Tergel said. Both recurring and newly-applying student organizations will be audited.

“Certain organizations are abusing the access to that [SAFC] funding, for some organizations have nearly identical leaderships, the same advisors, and the same [organizational] mission,” said Dale Barbaria ’19, S.A. vice president of finance.

Organizations that fail the audit will be disqualified from all SAFC funding, but may appeal their decision to the S.A. appropriations committee, and then again to the S.A. general body. It is unclear from the bylaw draft how long the disqualification will last. As the auditory body is a sub-committee embedded within the appropriations committee, the body will be authorized by changes to parts of the S.A. charter governing operational committees as laid out in the aforementioned bylaw draft.

Worried that the auditory committee “may not be governed by a diversity of views warranted for a powerful body,” one student representative “introduced an amendment to the bylaws draft that gave a seat to the S.A. vice president of diversity and inclusion on the auditory body.” That amendment passed.

Read the whole report here.

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